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How do I involve a Medicare Set Aside in a liability case?

Ever since Workers’ Compensation Medicare Set Asides (WCMSA) were formalized with the 2001 “Patel Memo,” there has been varying interpretation regarding the applicability of post-settlement Medicare Secondary Payer (MSP) considerations in liability claims. The Centers for Medicare and Medicaid Services (CMS) have taken the general position, for over a decade now, that Medicare’s interest should be considered when resolving a liability claim. This position has been established through the years, via:

  • Town hall calls;
  • Memoranda such as the May 25, 2011 “Stalcup” and September 29, 2011 memos;
  • Rulemaking process initiated in 2012 and subsequently discontinued in 2014;
  • Solicitation and statement of work for the Workers' Compensation Review Contractor (WCRC) from 2016 and 2017 indicating the contractor's ability to review Liability Medicare Set Asides (LMSAs).

At the close of 2018, CMS issued a notice of an anticipated rulemaking for future medicals, which has been widely speculated to address LMSAs. Subsequently, in 2019, the dates for issuing the proposed rule were extended – most recently to August 2020. Industry stakeholders will be keeping a close eye on when and whether CMS decides to institute the rulemaking process.

Until then there likely should be a case-by-case analysis balancing several factors, including the reasonable likelihood of a cost-shift to Medicare, the Medicare status of the plaintiff, and risk-management philosophy of the payer, and parties.

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