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CMS Signals Use of LMSAs In 2017

Over the past few weeks, the Centers for Medicare and Medicaid Services (CMS) has strongly signaled that it will begin taking steps to enforce the Medicare Secondary Payer (MSP) Act regarding future medical expenses in liability and no fault cases. CMS recently announced that effective October 1, 2017, Medicare will deny payment for items or services that should be paid from a Liability Medicare Set-aside (LMSA) or No-Fault Medicare Set-aside (NFMSA). The announcement further indicated that Medicare will not pay for any services related to any diagnosis codes associated with an open LMSA or NFMSA when the claim’s date of service is on or after the MSP effective date and on or before the MSP termination date. CMS has gone as far as designated specific MAC codes (N723 and N724) which will require a patient to use funds in an LMSA or NFMSA to pay for medical services or items after a case settles.

It is becoming quite clear that Medicare will only pay for post settlement treatment in circumstances where “benefits are exhausted/terminated,” or the treatment is otherwise shown to be unrelated to the injury claim. This means that a plaintiff in a personal injury cases will now be required to demonstrate their settlement did not shift the burden onto Medicare for future injury-related treatment. While an LMSA or NFMSA is not legally mandated, they remain the best way to demonstrate that a personal injury settlement does not shift the burden from a liability or no-fault policy onto Medicare.

If you have any questions regarding how this announcement affects your case or whether an LMSA or NFMSA is appropriate, please feel free to contact us at any time.

Gregory Lisowski

Managing Director

MSA Services, LLC

(866) 306-9423


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