CMS Advanced Notice of Proposed Rulemaking: Medicare Secondary Payer & Future Medicals



This GRG Client Alert is the first in a series of Alerts over the next three weeks from Garretson Resolution Group (“GRG”) on the subject of Medicare Secondary Payer (“MSP”) and future medicals in liability settlements.  CMS ANPRM Ruling, MSA, MSP

On June 14, 2012, the Centers for Medicare & Medicaid Services (“CMS”) filed an Advance Notice of Proposed Rulemaking (“ANPRM”).  The ANPRM solicits 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 until August 14th at 5:00PM EDT. 

The purpose of this Client Alert is twofold: 1) to provide a deeper dive on the nuts and bolts of the ANPRM (specifically, the CMS Proposed General Rule and Proposed Definitions); and 2) to talk about how GRG’s Medicare Set-Aside (“MSA”) Decision Engine provides GRG clients with the ready-built platform to ensure MSA compliance on files today as well as in the future - no matter what regulations CMS formally implements - so that you will feel zero effect on your business.  We ask you to forward your comments to us for submission to CMS about the Proposed General Rule and Proposed Definitions.  We also invite you to take the MSA Decision Engine for a test drive so you can witness firsthand how this state of the art compliance tool will address your MSA questions simply, quickly, and cost-effectively.

In the ANPRM, CMS acknowledges that practitioners in the liability settlement context have been seeking definitive guidance relative to future medicals.  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 liability settlements.  As such, the ANPRM specifically requests comment on “whether and how Medicare should implement a similar process in liability insurance situations as well as comment on… proposed options” outlined in the notice.
CMS Proposed General Rule

“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.”

GRG Comments:The general rule that is ultimately enacted must provide settling parties with greater certainty when resolving claims and allow individuals/beneficiaries to make more informed decisions at the time of settlement.  This general rule makes sense, so long as the options available to satisfy Medicare’s future interest clearly define which type of cases are within the scope of the rule and which are not (i.e. making certain cases “out of scope” by definition without further analysis).  Further, for the types of settlements that are within the scope, the options for satisfying Medicare’s interest must be highly scalable and cost-effective to apply.

Proposed Definitions

“Several proposed definitions have been developed for use in conjunction with the options Medicare is considering.  All definitions have been considered and/or developed for the purposes of this document.  We request comment on the definitions of ‘chronic illness/condition’, ‘physical trauma’, and ‘major trauma’, specifically, whether they are accurate and usable in terms of the presumption that future medical care will be required.

Chronic Illness/Condition

An illness/condition that persists over a long period of time. 

Date of Care Completion

The date the individual/beneficiary completed treatment related to his or her ‘settlement.’ 

Future Medical Care (‘future medicals’)

Medicare covered and otherwise reimbursable items and services that the individual/beneficiary received after the Date of ‘Settlement.’ 

Physical Trauma

An injury (as a wound) to living tissue caused by an extrinsic agent. 

Major Trauma

A serious injury to two or more Injury Severity Score (ISS) body regions or an ISS greater than 15. 

GRG Comments – In general, the definitions appear appropriate because they set a standard which is both readily understood and applied for each based on current industry standards.  We note the following:

    • Using the strict AMA definition of ‘Chronic Illness/Condition’ in the MSP context is not understandable or workable, and will not result in settlement efficiencies based on defining the chronic illness or condition purely on a term certain without further explanation.  For example, an acute injury, such as a femur fracture, may take 8-12 months for the bone remodeling to occur.  Based on the AMA definition of ‘chronic illness/condition’, such an injury would be classified as a chronic illness or condition.  The natural healing process should not count against a Medicare beneficiary in establishing the severity of the injury for purposes of determining how to address Medicare’s future interest under the MSP Act.

    • The term ‘Physical Trauma’ should have different nomenclature in order to better align with other definitions.  (Possibly renamed as ‘Acute Trauma’ as CMS listed in proposed definition of ‘Chronic Illness/Condition.’)   

    • Applying the ISS scale to the definition of ‘Major Trauma’ may be helpful, but is not as helpful as establishing a presumptive rule concerning the requirement of future medical care in a ‘settlement’ as the Abbreviated Injury Scale (“AIS”), which is more specific. 

    • Changing ‘Major Trauma’ to the term ‘Catastrophic Trauma/Injury’ would be more consistent with industry practice, based on our experience.

You can read the full notice from CMS regarding Medicare Secondary Payer obligations and future medical care here.

What can clients expect from GRG?

Without doubt, the options and related processes ultimately implemented by CMS must allow for scale, efficiency, and practicality. Our goal is to assert a collective voice for these key attributes. Please contact John Cattie at (704) 559-4300 or to provide thoughts or feedback.
GRG will continue to monitor all guidance from CMS in order to update our MSA decision-making methodology.  Whether you engage GRG for a traditional MSA evaluation letter, or utilize our “self-service” MSA Decision Engine technology-based service, you can rest assured your case will comply with current statutes, regulations and case law.  You can learn more about GRG’s MSA services, including our MSA Decision Engine on our website. 

If you have not already done so, please contact our MSA Team to discuss how we can establish a formalized approach to MSA compliance within your firm.

We appreciate your feedback on the CMS Proposed General Rule and Proposed Definitions 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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