CMS Withdraws Medicare Secondary Payer Proposed Rule

A proposed rule that was expected to outline how Medicare's interest should be protected in cases of settlements for future medical care was withdrawn Oct. 8 by the Office of Management and Budget.

A proposed rule that was expected to outline how Medicare’s interest should be protected in cases of settlements for future medical care was withdrawn Oct. 8 by the Office of Management and Budget.

The Medicare Secondary Payer and “Future Medicals” proposed rule (CMS-6047-P) “would announce CMS'[s] intention regarding means beneficiaries or their representatives may use 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 where 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,” the abstract on the proposed rule said.

In June 2012, the CMS issued an advance notice of proposed rulemaking (CMS-6047-ANPRM) under which Medicare would not pursue reimbursements from beneficiaries who receive awards from liability insurance under conditions it outlined.

Client Alert

In an Oct. 10 client alert, the Garretson Resolution Group (GRG), which works with personal injury claims settlements, said, “The NPRM was expected to outline how Medicare’s interest should be protected (per the Medicare Secondary Payer Act [42 U.S.C. § 1395y(b)(2)]) in cases where future medical care is claimed or effectively released in the settlement, judgment, award, or other payment of damages.”

The alert continued: “While CMS has guidelines in place for the handling of future medical expenses in workers’ compensation cases, until final rules are released in the liability context, there are no similar standards for claims involving self-insureds and automobile, liability, and no fault coverage.”

The GRG met with government officials as part of the public comment process for the advance notice of proposed rulemaking in July, the client alert said.

“We stressed the importance that any future medicals rule proposed by CMS, which creates requirements for addressing future costs of care in liability settlements, judgments or other payments, must have clarity for all stakeholders; including which stakeholders are responsible to ensure Medicare remains a secondary payer for Medicare covered, injury-related future medical expenses arising from settlements, etc. Absent such clarity, we strongly recommended that the proposed rules be returned to CMS until such clarity could be obtained,” the client alert said.

“We fully expect CMS to redesign the NPRM and resubmit to OMB at a later date,” the client alert said. “The upcoming guidelines are expected to pinpoint the circumstances in which and the actions settling parties should take to ensure that Medicare remains a secondary payer post-settlement. In the meantime, the withdrawal of the NPRM does not change the analysis in how best to deal with future cost of care questions arising in liability settlements.”

Facts should be reviewed in each case, including whether a settlement pays for injury-related future costs of care that would otherwise be covered by Medicare, it said.

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Originally published on: Bloomberg BNA