CMS Memorandum of July 24

Saturday, August 12, 2006 | 0

The Memorandum released by the Centers for Medicare & Medicaid Services (CMS) on July 24, 2006 specifically addresses a significant change regarding the issue of annuitizing the prescription drug portion of the MSA allocation.

In the Answer to Question 3, CMS states that "the amount for future prescription drug treatment should not be a separate annuity from the future medical portion of the WCMSA."

Because this Memorandum supersedes the December 30, 2005 CMS Memorandum regarding this issue, we recommend that both the medical expense and the prescription drug portions of the MSA allocations be included in the same annuity structure.

However, whether a single annuity or two annuities are chosen to fund these elements of the MSA allocation, we strongly recommend that two years of prescription drug funding be included in the seed of the structure in order to comply with CMS procedural requirements.

If you have any questions in this regard, please contact us at askjune@healthadvocatesinc.com. Health Advocates Inc. remains committed to furnishing our clients with recommendations based on CMS policy where indicated in order to provide the lowest defendable MSA allocations in the industry.

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