On June 14, 2012, the Centers for Medicare & Medicaid Services (CMS) filed an Advance Notice of Proposed Rulemaking (“ANPRM”). Garretson Resolution Group (GRG) is soliciting comments on standardized options that CMS is considering implementing to enable “beneficiaries and their representatives to “meet their obligations to protect Medicare’s interest” with respect to future medicals in liability settlements (including self-insurance). Comments will be accepted for 60 days from the date that the ANPRM is published in the Federal Register.
If you have a few moments, would you please read this Client Alert and respond with your comments? We think it is worth your time. Garretson Resolution Group is working to influence and secure additional clarity from CMS about how any new obligation will impact personal injury and mass tort settlements in the years to come. Moreover, we are all “equally yoked” in our efforts to ensure any new obligation is clearly defined and fact-specific as well as scalable and cost/time efficient to administer.
Background
In the notice, CMS acknowledges that practitioners in the liability settlement context have been seeking definitive guidance in liability settlements. CMS further acknowledges that while such guidance and a corresponding process has been available in the workers’ compensation context, to date no such guidance or process has been established for meeting MSP obligations with respect to future medicals in the liability settlement context. As such, the CMS notice specifically requests comment on “whether and how Medicare should implement such a similar process in liability insurance situations as well as comment on… proposed options” outlined in the notice.
The Proposed Options
CMS states that its interests should be considered in every settlement where the claimant, “reasonably anticipates receiving, or should have reasonably anticipated receiving Medicare covered…services after the date of “settlement…”. To accomplish this purpose, CMS proposes options ranging from absolute exemptions on one end of the spectrum (i.e. CMS defined a set of circumstances in which no further action would be necessary / no “set aside” required) to alternatives on the other end of the spectrum that involve a) the beneficiary paying for all future injury-related care out of his/her settlement proceeds until they are exhausted or b) submitting a proposed Medicare Set-Aside arrangement (similar to the current process in workers’ compensation). With regard to the latter options, it is important to note that CMS acknowledges that perhaps thresholds could be established (i.e. a dollar amount below which no action is necessary even if one of the other exemptions do not apply).
Further, CMS appears to be considering a process whereby the beneficiary could pay the entire MSA amount “up front” as opposed to having to administer a set aside arrangement into the future. In addition, one can read the notice to suggest that CMS recognizes that efficiency will be gained by creating certain injury classifications for purposes of pre-screening cases as eligible for the various options (e.g. if claim involves injury classification with Injury Severity Score (“ISS”) below x, then no further action required).
Importantly, in its “up front” payment option, CMS notes that determining a percentage of beneficiary proceeds to be paid to CMS would involve subtracting from the total settlement amount attorney fees and procurement costs borne by the beneficiary, as well as certain additional medical expenses the beneficiary paid out of pocket.
You can read the full notice from CMS regarding Medicare Secondary Payer obligations and future medical care here.
What to Expect from GRG
Without doubt the options and related process that are ultimately implemented must have scale and efficiency. Toward that end, GRG will be preparing commentary to submit to CMS and would be pleased to hear from you as we prepare our commentary. Our hope is to help assert a collective voice for efficiency and practicality. Please contact John Cattie at (704) 559-4300 or jcattie@garretsongroup.com.
Most importantly, GRG will monitor all guidance from CMS to continue to update the decision-making methodology employed in GRG’s two MSA service options – individual case review / recommendation letter and GRG’s new MSA Decision Engine (online self-service tool). Both service options ensure Medicare compliance in an efficient and cost-effective manner. As you may have seen in prior correspondence:
Based on the currently enacted statutory, regulatory and administrative guidance provided by CMS as well as relevant case law, we offer the MSA Decision Engine as a tool parties may utilize to demonstrate a reasonable good faith effort in protecting Medicare’s interests on the issue of future medical expenses in liability settlements. Based on our liability MSA methodology built on a decade plus experience in specifically addressing such issues, the MSA Decision Engine allows parties to address liability MSA issues in an affirmative manner and comply more substantially with the MSP Act. You can learn more about GRG’s MSA Decision Engineon our website.
As we read between the lines of the CMS notice, we are very pleased to see that CMS recognizes – as does GRG’s MSA decision-making methodology and online tool – that a) there should not be a default rule under which an MSA is required in every settlement; b) screening should be done on a fact-specific, case-by-case basis; and c) such screening must be highly-scalable and time/cost effective.
We appreciate your feedback as we prepare our comments to CMS. Further, we will continue to keep you up to date as additional information becomes available.
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