Western District of NY Issues MSP Protocol

On May 6, 2011, Assistant U.S. Attorney for the Western District of New York (WDNY) Robert G. Trusiak issued the WDNY Medicare Secondary Payor Protocol, which outlines a voluntary standard operating procedure for resolving the future medical component of a liability settlement involving a Medicare beneficiary. While this policy was not released by the Centers for Medicare and Medicaid Services (CMS), it is the first bit of guidance offered by the federal government on the issue of Liability Medicare Set Asides (LMSAs).

Before the application for MSP compromise can be filed with the US Attorney’s office for the WDNY, the following criteria must be met:

  1. Medicare must have been notified of the pending liability claim and subsequent settlement of the claim.
  2. A letter from the Medicare Secondary Payer Recovery Contractor (MSPRC) must be obtained stating that the conditional payment obligation concerning repayment of any Medicare liens related to the claim was resolved, or provide adequate assurances to that effect.

Once the application criteria has been met, appropriate steps must be taken to ensure the application includes the following:

  1. A copy of the MSPRC letter stating the matter concerning repayment for any Medicare liens related to the claim was reviewed and resolved or provide adequate assurances to the effect.
  2. Proposed LMSA concerning payment for the future medical items and services related to the claim.
  3. An agreed copy of the settlement agreement subject to the completion of MSP obligations.
  4. A joint statement from the applicants certifying the following:
    a. The value of the agreed settlement equals or exceeds $350,000.
    b. The plaintiff is a Medicare beneficiary as that term is defined under 42 C.F.R. §400.202.
    c. CMS was requested to approve the LMSA, but no substantive response has been received for at least 60 days from the date of the letter to CMS; and
    d. An affidavit from the preparer of the LMSA that it is true and correct based on the Medicare beneficiaries medical records and the injuries being released as well as in the conformance with the WCMSA submission checklist as published by CMS.

The U.S. Attorney’s office for the WDNY reserves the right to request additional information from the parties, however upon receipt of all required information will issue a release. The release will compromise the LMSA obligations related to the settlement, judgment, award or other payment. It is important to note that the WDNY MSP Protocol is not available for liability cases involving mass torts, and again, is not the policy of CMS.

On the positive side, this protocol does provide more peace of mind to those parties settling liability claims involving Medicare beneficiaries in the WDNY’s venue. However, while it is refreshing to see an arm of the federal government offer guidance on the issue of LMSAs, it should be noted that the agency given the task of enforcing the Medicare Secondary Payer (MSP) Statute, CMS, has not endorsed the policy at all. The last statement of the protocol says clearly, “This is not the policy of CMS”.

This protocol falls short of addressing the heart of the problem, which is CMS’ insistence on viewing LMSAs through the same lens as they have viewed WCMSAs. They are clearly two different beasts, and this does nothing to change that fact. For example this protocol leaves many questions such as what to do if the settlement is under $350K, or if apportionment of the set aside is an accepted practice. While we commend the WDNY for taking a position on this issue, it would be helpful to see them tackle the more controversial elements of handling LMSAs.

To view the WDNY MSP Protocol in its entirety, please click here.


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