Synergy Blog

CMS HQ Issues 1st Memo Regarding Liability Medicare Set Asides

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

Many have been asking for formal guidance regarding Medicare set asides in liability settlements.  It seemed as though that was never going to happen.  That came to an end in May of this year with the release of a memo from the Region 6 CMS office regarding liability Medicare set asides.  Up until last week there was nothing from the Baltimore headquarters for CMS.  In the first memo coming from CMS HQ regarding Liability Medicare Set Asides (issued 9/29/11), Charlotte Benson, Acting Director Financial Services Group for CMS, gives us an exception to the need to create a set aside in liability cases.  According to the memo, a liability Medicare set aside isn’t necessary when the Medicare beneficiary’s treating physician certifies in writing that all of the care related to the claimed injury has been completed as of the date of the settlement.

The memo says:

“Where the beneficiary’s treating physician certifies in writing that treatment for the alleged injury related to the liability insurance (including self-insurance) “settlement” has been completed as of the date of the “settlement”, and that future medical items and/or services for that injury will not be required, Medicare considers its interest, with respect to future medicals for that particular “settlement”, satisfied. If the beneficiary receives additional “settlements” related to the underlying injury or illness, he/she must obtain a separate physician certification for those additional “settlements.”


When the treating physician makes such a certification, there is no need for the beneficiary to submit the certification or a proposed LMSA amount for review. CMS will not provide the settling parties with confirmation that Medicare’s interest with respect to future medicals for that “settlement” has been satisfied. Instead, the beneficiary and/or their representative are encouraged to maintain the physician’s certification.”

The memo is very important for a number of reasons.  First, it is the first official memorandum from the CMS central office in Baltimore to substantively address liability Medicare set asides.  Second, it provides a mechanism, if the case facts fit the criteria, to avoid the necessity of creating a liability Medicare set aside.  It is a limited exception as the treating doctor must attest in writing that all of the treatment for the released injuries was completed at the time of settlement.  Third, it avoids the need to request CMS review of a proposed “zero” liability Medicare set aside and the parties just need to retain a copy of the doctor’s letter/certification.

Despite the foregoing, every lawyer (plaintiff or defense) should read the Sally Stalcup memo regarding liability Medicare set aside arrangements.  The memo was issued back in May of this year by the Dallas Region 6 CMS office.  The memo, to summarize, indicates that “Medicare’s interests must be protected; however, CMS does not mandate a specific mechanism to protect those interests.”  Furthermore, the law “does not require a ‘set-aside’ in any situation.”  Nevertheless, the law does require “that the Medicare Trust Funds be protected from payment for future services whether it is a Workers’ Compensation or liability case.”  From CMS’s perspective, a set aside is their “method of choice and the agency feels it provides the best protection for the program and the Medicare beneficiary.”

If an injury victim is a Medicare beneficiary or has a reasonable expectation within 30 months of becoming a Medicare beneficiary, a set aside should be considered.  If however a treating physician certifies that all treatment for the released injuries is complete as of the date of settlement, then no set aside is necessary.  Navigating the MSP related issues at settlement can be difficult as well as confusing.  From the lawyer’s perspective, the most important thing is to make sure the injury victim client completely understands the potential impact of settling the case has upon future Medicare coverage of injury related care.

Synergy can make Medicare secondary payer compliance simple by handling these difficult issues for you.  We can prepare the Medicare set aside allocation, provide professional Medicare set aside administration via a Medicare Set Aside trust and resolve Medicare conditional payments.  Synergy does offer a package discount if you take advantage of any combination of these services.  Contact us today to see how can help you.

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Understanding Structured Settlements and Medicare Set-AsidesThird Thursday Webinar Series

The parties agree that a Medicare Set-Aside is needed, now what? In this month's webinar, presented by Synergy CEO, Jason D. Lazarus, you will learn about the process basics for setting up a set aside including MSA allocations, funding mechanisms for set-asides, post-settlement administration as well as an overview of the process to make sure you close the case compliantly.

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