October 17, 2022 • Legislative & Regulatory

Medicare Set Aside Regulatory Update: Rulemaking Process Concludes with Rule Being Withdrawn

It was recently announced on Reginfo.gov that as of October 13, 2022, the rulemaking process around future medicals (i.e., Medicare Set Asides) has concluded and the Centers for Medicare & Medicaid Services (CMS) has withdrawn the rule from review. As some may recall, and as we previously reported, CMS began this process in late 2018. Since then, the release date had been moved many times.

It had been widely speculated these potential regulatory changes would address future medicals in liability insurance and also potentially affect existing regulations (presumably 42 CFR 411.46 & 47). Prior to concluding, the most recent abstract indicated:

This proposed rule would clarify existing Medicare Secondary Payer (MSP) obligations associated with future medical items services related to liability insurance (including self-insurance), no fault insurance, and worker’s compensation settlements, judgments, awards, or other payments. This proposed rule would also remove obsolete regulations.

CMS has attempted to address future medicals in the liability realm in the past. In 2012, rulemaking for Liability Medicare Set Asides (LMSAs) was initiated but the process was subsequently discontinued in 2014. Prior to that, two policy memos issued on the topic, including the May 25, 2011 “Stalcup Memo” out of the Dallas Regional Office, and a CMS memo dated September 29, 2011, which indicated when an LMSA was not necessary (when a treating physician certifies in writing that no further Medicare-covered treatment related to the injury has been completed as of the date of the settlement and that future treatment will not be required). Finally, in the solicitation and statement of work (SOW) for the Workers’ Compensation Review Contractor (WCRC) from 2016 and 2017, there was an indication that the contractor needed the ability to review LMSAs.

The instant rule was with the Office of Information & Regulatory Affairs (OIRA) and was withdrawn by CMS. As OIRA indicates on Reginfo.gov, “At any time during the OIRA review process, an agency may withdraw its rule from review and choose not to move forward with it or to resubmit it after further consideration. Interested parties may contact the agency directly with questions regarding specific withdrawals.”

It’s unclear what will happen next for Medicare Set Aside (MSA) rulemaking and whether LMSAs will be addressed in any future rulemaking process or by way of policy. What’s guaranteed is Medicare Secondary Payer (MSP) will remain a constantly evolving and dynamic area of compliance. Ametros will be closely monitoring news in relation to MSA rulemaking and will provide updates as they become available. We remain at the service of parties who choose to address future medicals in liability settlements through our professional administration services. Regardless of the allocation or insurance type, professional administration simplifies the complex process of managing medical funds and provides protection to all parties in any settlement.

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