Per Centers for Medicare & Medicaid Services, a Liability Medicare Set-Aside (LMSA) or No Fault Medicare Set-Aside (NFMSA) is an allocation of funds from a liability or an auto/no-fault related settlement, judgment, award, or other payment that is used to pay for an individual’s future medical and/or future prescription drug treatment expenses that would otherwise be reimbursable by Medicare.
This type of set-aside allocation is common in worker’s compensation cases – with an increase in life expectancy and concerns about the financial sustainability of Medicare in the future, requiring LMSA’s and NFMSA’s to cover future medical costs seems like a logical next step for CMS.
Stakeholders agree that mandatory LMSA’s are a real possibility – the details of when and how new processes will be implemented is another matter. Some in the legal community believe that LMSA’s will be required as early as October 1, 2017, and that this requirement could go into effect overnight with little warning. In an article written in March by MSA Lawyer John Cattie, he argues that there have been multiple indicators that this is going to happen, and soon – but the industry has chosen to ignore the signs. You can read his article here.
Others, however, believe that the LMSA/NFMSA program will be optional for the foreseeable future, and that there are too many kinks to work out before the program needs to be taken seriously.
At the 2017 NSSTA Annual Meeting in April, Elise Sanquinetti, the incoming president at the American Association for Justice (AAJ) spoke about this issue. She described LMSA’s as a huge challenge, and an opportunity. When new CMS rules will go into effect, attorneys that may have never done an MSA as part of their practice will need to start doing them. This is a change in procedure, and NSSTA members have the ability to provide educational outreach and service to attorney clients dealing with MSAs for the first time.
Don’t miss the LMSA update at the 2017 Fall Meeting in San Antonio – you can register for the conference here.