New CWF Medicare Secondary Payer Type for LMSAs and NFMSAs

March 2017 ~

Effective date: October 1, 2017

Implementation date: October 2, 2017

In an effort to comply with the Government Accountability Office (GAO) final report entitled Medicare Secondary Payer (MSP): ‘Additional Steps Are Needed to Improve Program Effectiveness for Non-Group Health Plans’ (GAO 12-333), CMS has announced it will establish two new set-aide processes:

1. a Liability Insurance Medicare Set-Aside Arrangement (LMSA)
2. a No-Fault Insurance Medicare Set-Aside Arrangement (NFMSA)

According to CMS, an LMSA or an NFMSA is an allocation of funds from a liability or an auto/no-fault related settlement, judgment, award, or other payment that is used to pay for an individual’s future medical and/or future prescription drug treatment expenses that would otherwise be reimbursable by Medicare.

This change impacts physicians, providers and suppliers submitting claims to Medicare Administrative Contractors (MACs) for services to Medicare beneficiaries and addresses the policies, procedures, and system updates required to create and utilize an LMSA and an NFMSA MSP record, similar to a Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) MSP record and instructs the MACs and shared systems when to deny payment for items or services that should be paid from an LMSA or an NFMSA fund.

For more information, refer to MLN Matters^® Number: MM9893

Source(s): CMS;