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Update on Proposed Liability MSA Rules and Civil Money Penalties

March 3, 2022

Rasa Fumagalli JD, MSCC, CMSP-F

The Medicare Trust Fund is financially unstable. At this time, the funding for Medicare Part A, which covers hospital costs, is expected to run out by 2026. In light of this bleak picture, it is no surprise that the Centers for Medicare & Medicaid Services (CMS) is taking an even more aggressive stance when it comes to the recovery and prevention of improper payments.  Although workers’ compensation settlements that close out future medical rights have always been subject to scrutiny by CMS, CMS is moving forward with further efforts to shore up the financial integrity of the Medicare Trust Fund.

The Proposed Rule regarding “MSP and Future Medicals” (EO 12866) has essentially been on hold since December of 2018. The current version of the proposed rule states that it “would clarify existing Medicare Secondary Payer (MSP) obligations associated with future medical items services related to liability insurance (including self-insurance), no fault insurance, and worker’s compensation settlements, judgments, awards, or other payments.” It would also “remove obsolete regulations.”  On March 1, 2022, CMS presented the proposed LMSA rule to the Office of Regulatory Information and Affairs (OIRA). OIRA was also presented with the Final Rule for Medicare Secondary Payer and Certain Civil Money Penalties. Given the delivery of the proposed and final rules to OIRA, we expect to see a version of the rules rolled out over the next several weeks. We will continue to monitor the rules and keep you advised.