Will CMS expand MSA reviews to liability cases and other claims?

June 21, 2016 / 3 min read

On June 9, the Centers for Medicare and Medicaid Services (CMS) announced that it is considering expanding its voluntary Medicare Set-Aside (MSA) review process to include liability insurance (including self-insurance) and no-fault insurance claims. While CMS didn’t provide details, it plans to work closely with stakeholders to determine “how best to implement this potential expansion.” CMS expects to schedule town hall calls later this year to discuss the matter. A copy of the CMS notice can be obtained here.

This important announcement comes on the heels of the May 26 release in which CMS posted its Sources Sought Notice soliciting potential 8 small businesses in connection with the Workers' Compensation Review Contractor (WCRC). The WCRC is the contractor CMS uses to evaluate workers' compensation Medicare Set-Aside proposals.

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The Sources Sought Notice also mentions that CMS may expand the MSA program to liability and other claims. Specifically, the notice states that the contractor will be required to provide “support for the possible expansion” of the MSA review process to include other Non-Group Health Plans (NGHP) besides workers' compensation cases. CMS further expects contractor candidates to have the “ability to support the determination” and to “recommend values” for MSA amounts in relation to “other Non-Group Health Plan Medicare Set-Aside Arrangements (NGHPMSA).”

A draft Statement of Work (SOW) included as additional information for the notice contains even more information on this possible expansion. The SOW explains that the contractor must be ready to implement “a similar process to what exists currently under the WCMSA process to check MSAs for other applicable NGHP insurances” upon CMS election within 90 days. Further, the SOW provides that CMS may divide NGHP cases into two categories—those requiring full or cursory review—based on proposed settlement amounts. CMS estimates full review volume could be as low as 800 or as high as 11,000 additional cases per year, while it projects another 40,000 cases to qualify for cursory review by the contractor. No further details were given on the specific thresholds and criteria to be used.

In the bigger picture, these announcements are the first signs that CMS may revisit the MSA issue for liability and other claims since it withdrew its formal Advance Notice of Proposed Rulemaking (ANPRM) proposals several years ago. Many details on the execution of this plan remain unknown. Will the CMS use the formal rule making process as they did with the ANPRM? Or will they implement any expansion through informal policy memoranda and processes? Additionally, we don’t yet know if setting policy on liability set-asides will be feasible. After all, liability cases come with a completely different set of issues that don’t exist in workers' compensation cases, such as the impact of policy limits, comparative and contributory negligence, and myriad other factors. Further, the questions and debates regarding the authority of CMS to expand its MSA program to liability and other claims that arose in connection with prior ANPRM proposals will likely resurface as CMS moves forward.

We will be closely tracking this issue and provide further updates as developments warrant.