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AAJ Announcement about MSP Changes

By Jason D. Lazarus, J.D., LL.M., MSCC, CSSC

The AAJ announced to their members some important changes to the Medicare secondary payer process.  The changes were brought about by the AAJ’s lobbying efforts and the MARC coalition.  The most significant announcement was a formal memorandum regarding liability Medicare set asides, the first of its kind from the CMS HQ office in Baltimore.  Below is the text of the announcement by the AAJ.

October 5, 2011


Dear Colleagues,

AAJ has worked continuously over the last year to ensure certainty, finality and proportionality in the Medicare Secondary Payer process.
On Friday, September 30th CMS made a series of announcements regarding the Medicare Secondary Payer program. In addition to the new policies listed below, CMS is also attempting to improve the customer service experience for processing reimbursement claims by adding a self-service phone feature and an internet portal. We hope that these changes will improve the reimbursement process. Summaries of the recently issued policies are listed below.

  1. CMS extended the implementation of the Section 111 reporting requirements for liability settlements. Under the new timeline the reporting requirements will begin to be phased in on January 1, 2012.
  2. CMS issued a new policy on the types of exposure, ingestion or implantation (typically mass tort) situations where Medicare will not assert a recovery claim against settlements, judgments or awards and Section 111 reporting requirements do not need to be followed. This policy will improve the reimbursement process for cases that meet CMS’ criteria. AAJ is continuing to advocate on behalf of additional guidance that would establish criteria for a wider segment of exposure, ingestion or implantation situations so that claims with a Medicare component can be settled quickly and easily.
  3. CMS also issued another new policy that establishes a safe harbor for settlements where a physician attests that no future medical care is needed. In any case where a physician attests that no future medical care is needed, the beneficiary would have finality on their Medicare reimbursement. Because this policy would benefit from further explanation, AAJ will work to clarify it. AAJ’s goal is to ensure a reasonable and workable approach to handling future medicals in liability cases.
  4. CMS has also exempted Qualified Settlement Funds (QSFs) from Section 111 reporting requirements for certain payments to qualified trusts where the payment took place before 10/1/11.

In addition, CMS has announced that in the near future they will publish criteria for a class of claims which can be paid as a flat percentage of the total settlement amount and a class of claims where the reimbursement amount can be known before settlement. AAJ supports any policy that provides certainty and finality for reimbursement amounts and will urge CMS to make these classes as broad as possible.

The full details of the policies above can be found on the CMS webpage and in the documents that are linked in the right hand margin of this message.
We believe that these policy changes may offer some improvement to the MSP reimbursement process. AAJ will continue to advocate on behalf of addressing the remaining issues so that claims with a Medicare component can be settled more easily. In addition we will continue our support of H.R. 1063, which provides that CMS must notify you of your reimbursement amount prior to settlement. This legislation has bi-partisan support.

Best Regards,

Linda Lipsen
Chief Executive Officer
American Association for Justice


To view the announcements made by CMS, use the following links:

Revised Timeline for Medicare Mandatory Insurer Reporting

Policy memorandum related to exposure, ingestion and implant issues

Qualified Settlement Fund Alert exempting monies in QSFs from mandatory insurer reporting

Liability Medicare Set Aside Policy Memorandum

MSPRC Self Service Phone Feature

Option to pay a fixed percentage on settlements $5,000 or less (formal announcement by 10/21/11)

Upcoming improvements of the MSP system in the next 3-9 months

Stay tuned for more updates to keep up with changes and the flurry of announcements by CMS.  Synergy is your source for Medicare secondary payer compliance.  We can resolve conditional payments, prepare a Medicare set aside allocation and then offer professional administration of the set aside.  Currently, we are offering package pricing for Medicare conditional payment resolution and Medicare set aside services.  Contact us today to see how we can help.


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