Liability MSAs – Are They Really Coming to a Town Near You???

7.1.2020 Blog

The Office of Management and Budget recently updated the timing for the release of the long-awaited proposed rule addressing liability, no-fault and workers’ compensation settlements. According to the updated publication, the rule seeks to clarify that an individual or Medicare beneficiary must satisfy Medicare’s interests with respect to future medical items and services related to settlements, judgments, awards or other payments for liability, no-fault and Workers’ Compensation settlements. The proposed rule would also remove obsolete regulations. The scheduled timing for release of the proposed rule is August 2020.

The current Medicare Set-Aside process is one created by policy memo; the term Medicare Set-Aside appears nowhere in the actual Medicare Secondary Payer law or regulations. Although the Medicare Secondary Payer Act (MSPA) clearly includes liability insurance plans as potential primary payers, the applicability of the MSPA to post-settlement medical expenses is only addressed in the worker’s compensation regulations/rules associated with the MSPA. This proposed rule could change that.

Once the proposed rule is released, it will be published in the Federal Register. Public comment would follow. After receiving all comments, CMS must review the comments and decide whether the proposed rule should be changed. If the agency decides to move forward, with or without changes, the final rule would then be published in the Federal Register, along with an effective date. Generally, the rule cannot become effective fewer than 30 days after the date of publication.

We have seen proposed rulemaking for liability MSAs in the past, which stalled after the comment period. What this new, proposed rule says remains to be seen. As always, however, the attorneys at Nyhan, Bambrick, Kinzie and Lowry will keep you updated and abreast of all developments.

The NBKL blog is provided for informational purposes; we are not giving legal advice or creating an attorney/client relationship by providing this information.  Before relying on any legal information of a general nature, you may consider consulting legal counsel as to your particular facts and applications of the law.