The debate over the necessity of obtaining a Medicare Set-Aside Allocation (MSA) as part of a liability settlement involving a Medicare beneficiary (or a claimant who may become a Medicare beneficiary within 30 months of the settlement) rages on. To do or not to do, that is the question, as are the questions, whether the Centers for Medicare and Medicaid Services (CMS) will review the MSA or enforce the provisions of the Medicare Secondary Payer Statutes (MSPS).

It appears that answers to some of these questions may be forthcoming. On his web site, Robert Fleming, an elder law attorney in Tucson, has reported the substance of a conversation between Thomas D. Begley, Jr., a member of the Special Needs Alliance, and a representative of the CMS office in Philadelphia. The link to this posting is: http://gerilaw.typepad.com/elderlaw/2009/10/cms-on-msas.html.

The Special Needs Alliance which is a group of very competent lawyers who specialize in issues relating to Medicare and Medicaid benefits. Based on this report, it would appear that CMS may take the position that MSAs are required in connection with the settlement of liability claims involving payments to Medicare beneficiaries.

As to the questions of review and enforcement, the posting on Mr. Fleming’s web site indicates that CMS offices covering the Philadelphia and New York Regions are currently reviewing MSAs in liability settlements, but, due to manpower shortages, are not aggressively enforcing their rights under the MSPS.

According to the Center for Lien Resolution, regions covered by the Chicago, Dallas, Philadelphia and Seattle offices of CMS are reviewing liability MSAs while regions covered by the Atlanta, Boston and San Francisco offices of CMS are not reviewing liability MSAs at this time.

It raises the question as the why CMS has chosen to provide “guidance” in this manner, and why not send a written reply to a written inquiry? Why not post a written alert or guidance on the official CMS web site?

Perhaps CMS has chosen this course of action because it wants to encourage a course of action without having to go on the record to set forth a specific set of requirements. CMS may not be ready to address this issue given the amount of time consumed in implementing the NGHP reporting requirements which become effective January 1, 2010. By providing oral “guidance,” CMS may be seeking feedback and buying time to gear up for the onslaught of submissions before it issues written guidelines.

At the end of the day, there is still no official word from CMS regarding its intentions as respects the submission of MSAs in liability settlements, but it appears, we may be nearer to receiving some solid answers upon which we can rely as we march on to the January 1, 2010, deadline after which liability payments to Medicare beneficiaries will be reported to CMS.