01/20/21
Heather Schwartz Sanderson
Liability Medicare Set-Asides (aka LMSAs): Are they grounded in the Medicare Secondary Payer Act (MSP) as a legal requirement? The P&C industry has heard chatter of the concept of LMSAs since the inception of the Workers Compensation Medicare Set-Aside (WCMSA) review process established at the Centers for Medicare & Medicaid Services (CMS) in 2001. However, twenty (20) years later, the current guidance on LMSA requirements is nebulous, to say the least.
CMS provides the following examples as to what would be considered “general liability” claims subject to such MSP requirements: 1) Medicare beneficiary injured in an auto accident; 2) Beneficiary files a claim against the alleged responsible party and receives payment; 3) or Medicare is secondary to the liability insurance payment. As demonstrated by the examples, “general liability claims” by CMS s definition can be quite broad in its applicability. In basic concept, an LMSA is a set-as