Important Medicare Secondary Payer ("MSP") Act Developments
- CMS PROPOSES NEW RULE REGARDING "FUTURE MEDICALS"
- HELPFUL FEDERAL LEGISLATION MAY BE ENACTED
CMS PROPOSES NEW RULE REGARDING "FUTURE MEDICALS"
The Centers for Medicare & Medicaid Services ("CMS") has proposed that a new rule be added to the federal Code of Regulations. The proposed rule is titled "Medicare Program; Medicare Secondary Payer and 'Future Medicals' (CMS-6047-ANPRM)." The ANPRM ("Advanced Notice of Proposed Rulemaking), which includes a complete copy of the proposed rule, was posted at the website of the Federal Register (http://federalregister.gov/a/2012-14678) on June 15, 2012.
CMS states that the reason it is proposing this new rule is that CMS has been receiving numerous "requests for guidance on 'future medicals' MSP obligations, specifically, how individuals/beneficiaries can satisfy those obligations effectively and efficiently." CMS says the proposed rule is designed:
"to clarify how beneficiaries can meet their obligations to protect Medicare's interest with respect to Medicare Secondary Payer (MSP) claims involving automobile and liability insurance (including self-insurance), no-fault insurance, and workers' compensation when future medical care is claimed or the settlement, judgment, award, or other payment releases (or has the effect of releasing) claims for future medical care."
In the proposed rule, unless other stated, (1) the term "future medicals" (aka "future medical care") means "Medicare covered and otherwise reimbursable items and services that the individual/beneficiary received after the Date of 'Settlement," and (2) the term "Settlement" means "settlements, judgments, awards, or other payments."
The CMS proposed "general rule" is:
If an individual or Medicare beneficiary obtains a "settlement" and has received, reasonably anticipates receiving, or should have reasonably anticipated receiving Medicare covered and otherwise reimbursable items and services after the date of "settlement," he or she is required to satisfy Medicare's interest with respect to "future medicals" related to his or her "settlement" using any one of the following options outlined later in this ANPRM.
There are seven proposed options for satisfying Medicare's interest in "future medicals" detailed in the ANPRM. One of these options (Option 4) is that the Medicare beneficiary submits proposed Medicare Set-Aside Arrangement (MSA) amounts for CMS' review and approval. Proposed Option 4 states:
Currently, we have a formal process to review proposed MSA amounts in certain workers' compensation situations. Recently we have received a high volume of requests for official review of proposed liability insurance (including self-insurance) MSA amounts. This has prompted us to consider whether we should implement a formal review process for proposed liability insurance (including self-insurance) MSA amounts.
In the ANPRM CMS expressly admits that there is no current legal (statute or regulation) basis or any formal process for a "liability MSA," stating:
- Currently, individuals involved in certain workers' compensation situations are able to use Medicare's formal, yet voluntary, Medicare Set-Aside Arrangement (MSA) review process in order to determine if a proposed set-aside amount is sufficient to meet their MSP obligations related to "future medicals." To date, Medicare has not established a similar process for individuals/beneficiaries to use to meet their MSP obligations with respect to "future medicals" in liability insurance (including self-insurance) situations. We are soliciting comment on whether and how Medicare should implement such a similar process in liability insurance situations, ...
- We specifically solicit comment on how a liability MSA amount review process could be structured, including whether it should be the same as or similar to the process used in the workers' compensation arena, whether review thresholds should be imposed, etc.
The Selman Breitman comment to CMS regarding the issue of whether Medicare should implement a "liability MSA process" would be: No, Medicare should not, because (1) there is no current statutory or other legal support for use of a "liability MSA," (2) while MSAs work well in the workers' compensation context, they do not in the liability insurance (and self-insurance) context, and (3) if a federal regulation is issued that requires the use of "liability MSAs," a host of suits would probably be filed challenging the validity of this requirement and staying enforcement of such regulation.
The other six alternative proposed options for resolving "future medicals" proposed by CMS are:
- Option 1 - The individual/beneficiary pays for all related future medical care until his/her settlement is exhausted and documents this situation;
- Option 2 - Medicare would not pursue "future medicals" if the individual/beneficiary's case fits all of the conditions specified in this option;
- Option 3 - The individual/beneficiary acquires/provides an attestation regarding the Date of Care Completion from his/her treating physician;
- Option 5 - The beneficiary participates in one of Medicare's recovery options;
- Option 6 - The beneficiary makes an upfront payment; or
- Option 7 - The beneficiary obtains a compromise or waiver of recovery.
The proposed rule is now in the "pre-rule" phase of adopting a federal regulation. During this phase, once the proposed rule is published in the Federal Register (which this rule was, on June 15, 2012), the agency proposing the rule must provide the public with an opportunity to submit written comments regarding the proposed rule for consideration, publication and response by the agency. The standard required comment period (which applies to this proposed rule) is 60 days from the date of publication.
So what happens next regarding the proposed rule before it could become a final federal regulation?
- In the ANPRM, CMS advises that it will receive written comments regarding all provisions of the proposed rule during the 60 day period that began on June 15, 2012 and specifies exactly how and where to send such comments.
- After the close of the comment period, CMS will publish all timely received written comments at: http://regulations.gov.
- CMS will then draft and publish a final version of the rule in which CMS will have to describe and respond to the public comments it received.
HELPFUL FEDERAL LEGISLATION MAY BE ENACTED
As we have previously reported, the key provisions of the proposed SMART Act, aka Strengthening Medicare and Repaying Taxpayers Act of 2011 (H.R. 1063), include:
- The parties could request from Medicare a final amount due and Medicare would have to respond within 65 days of this request;
- There would be a right to appeal if there was a disagreement with Medicare's payment request or if the parties believed that Medicare had made a mistake;
- CMS would be required to set a low dollar threshold below which Medicare would not pursue a reimbursement claim;
- If the beneficiary refused to provide his or her SSN, the "responsible reporting entity" (insurer or self-insurer) could have "safe harbor" regarding alleged violation of the Medicare mandatory insurer reporting ("Section 111") program;
- The $1,000 per claimant fine for failing to report under the Section 111 reporting program would be discretionary, rather than mandatory; and
- Medicare's recovery claim under the MSP would be subject to a three year statute of limitations; Medicare would have to pursue its recovery claim within three years from the date of reporting under the Section 111 program.
A copy of the current version of the SMART Act is available here.
The good news is that, according to some reports, the SMART Act:
- Is currently under consideration in the House of Representatives, where it has more than 110 co-sponsors and bi-partisan support;
- Has strong industry support; and
- Might get enacted by the end of the legislative year.
Selman Breitman will be closely monitoring the status of the proposed new rule and the proposed legislation.