LMSA Rules by September?

Once again the possibility of regulations from the Department of Health and Human Services regarding Liability Medicare Set-Asides (LMSA) and No-Fault Medicare Set-Asides (NFMSA) has been brought into the spotlight.  In recent days, the Office of Information and Regulatory Affairs’ Office of Management and Budget published a notice of proposed rulemaking to provide guidance to Medicare beneficiaries and to protect the Medicare Trust Fund.  The full notice can be found here.  Per the abstract:

“This proposed rule would ensure that beneficiaries are making the best health care choices possible by providing them and their representatives with the opportunity to select an option for meeting future medical obligations that fits their individual circumstances, while also protecting the Medicare Trust Fund. Currently, Medicare does not provide its beneficiaries with guidance to help them make choices regarding their future medical care expenses when they receive automobile and liability insurance (including self-insurance), no fault insurance, and workers’ compensation settlements, judgments, awards, or payments, and need to satisfy their Medicare Secondary Payer (MSP) obligations.”

Interestingly, this proposed rule in regards to Liability Medicare Set-Asides (LMSAs) is noted to have “economically significant” priority. According to the Office of Management and Budgets, “significant” regulatory actions are defined in an executive order as those that: ‘Significant regulatory actions are defined in the Executive Order as those that have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or raise novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in this Executive order.”[1] Furthermore, a Notice of Proposed Rulemaking (NPRM) is expected to be decided upon in September 2019. Although the actual proposed rule was unavailable for review, to those of us that are familiar with the industry, rules for LMSA and NFMSA have been anticipated for some time.  However, this is the first indication of movement outside the Department of Health and Human Services.

This posting by the Office of Management and Budget is the first step to development of regulation and is not yet a proposed rule. This publication is simply notification that CMS is currently in the process of putting together a proposed rule.  Once the draft is prepared it will be published in the Federal Register and after publication any interested parties in the rule will be provided 60 days to comment.  Once the period for comment closes, CMS will decide whether to proceed with development of the regulation.

It is unclear as to whether CMS will seek ongoing feedback from interested stakeholders. As of this date, no Town Hall has been scheduled.

Gordon & Rees has previously written official comments for prior notices of proposed rulemaking and is equipped to do so on behalf of interested stakeholders. If you are interested in this service, please contact us. As this process develops Gordon & Rees will continue to keep you apprised of the progress.

[1] Department of Management and Budget FAQs. https://www.reginfo.gov/public/jsp/Utilities/faq.myjsp

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