On October 13, 2022, the Centers for Medicare and Medicaid Services (CMS) withdrew its proposed rule on future medicals in liability settlements from review by the White House Office of Information and Regulatory Affairs (OIRA review and approval is required before a proposed rule is published).

While never published to the public, the proposed rule was expected to provide guidance regarding obligations associated with future medical items in liability cases. It was commonly believed these obligations would include the use of a Liability Medicare Set-Aside (LMSA), similar to MSAs used in workers’ compensation, in certain situations.

What is uncertain now is whether a proposed rule around LMSAs will be reworked and resubmitted to OIRA for consideration soon or whether CMS is closing out regulations around liability settlements and future medicals for the foreseeable future. This is the second time CMS has withdrawn a rule on LMSAs, with the first withdrawn in 2014.

Practical Implications

While the lack of guidance around future medical obligations to CMS may have frustrated parties to liability settlements, these parties could have been even more frustrated if CMS had issued rules. As it is, parties in liability cases continue to have much more discretion in determining how to best consider Medicare’s interests in future medicals at the time of settlement than do parties in workers’ compensation cases.

What should settling parties do, given that no CMS LMSA review policy or process currently exists? Please reference Tower’s “Navigating Through the Fog: Medicare, Future Medicals & Liability Settlements” as a starting point. Of course, always feel free to contact me, Dan Anders, for consultation at Daniel.anders@towermsa.com or 888.331.4941.

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