CMS's failure to reivew Liablity Set Asides
CMS while asserting there is an obligation to create a Liability Medicare Set Aside ("LMSA") are routinely refusing to review proposed set asides. We recently received a letter refusing review. It said "[d]ue to resource constraints, CMS is not providing a review of this proposed liability Medicare set-aside arrangement amount. Please be advised that this does not constitute a release or a safe harbor from any obligations under any Federal law. including the MSP statute. All parties must ensure that Medicare is secondary to any other entity responsible for payment of medical items and services related to the liability settlement, judgment or award." (emphasis in original)
Review of LMSAs is a "voluntary process" according to CMS. The value of a refusal to review letter such as this one would be an estoppel argument if CMS challenged the set aside in the future. If it is a truly voluntary process and CMS refuses to undertake the review, it would seem difficult for the government to argue later on that what was done was inappropriate. This is particularly so since there are no current CMS policy memorandum, rules or guidance regarding LMSAs similar to those we have for Workers' Compensation.