This GRG Client Alert is the second 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.
On June 14, 2012, the Centers for Medicare & Medicaid Services (“CMS”) filed an Advance Notice of Proposed Rulemaking (“ANPRM”). This 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).”
The purpose of this Client Alert post is twofold: 1) to provide a deeper dive on the nuts and bolts of the ANPRM (specifically, Options 1 and 2); 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 these options. 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.
Proposed Option 1 – “The individual/beneficiary pays for all related future medical care until his/her settlement is exhausted and documents it accordingly.”
• GRG Comments – Proposed Option 1 contemplates a situation where the individual/beneficiary has been adequately compensated for his/her anticipated future medical expenses within the gross settlement amount while also being adequately compensated for his/her other damages sustained (past medicals, wage loss, non-economic damages, etc.). However, having the individual/beneficiary pay for all related future medical care until his/her settlement is exhausted and documents it accordingly, in and of itself, appears to overreach the current statutory obligation of the MSP Act (42 U.S.C. Sec. 1395y(b)(2)). However, if the language read “The individual/beneficiary does not bill or authorize his/her medical providers to bill Medicare for any related future medical care until the portion of his/her settlement allocated to future medicals or expenses is exhausted and documents it accordingly”, then Option 1 would fully embrace the meaning and spirit of the MSP Act, whose intent is to ensure the Medicare Trust Fund remain the secondary payer post-settlement.
Proposed Option 2 – “Medicare would not pursue ‘future medicals’ if the individual/beneficiary’s case fits all of the conditions under either of the following headings:
a) The amount of liability insurance (including self-insurance) ‘settlement’ is a defined amount or less and the following criteria are met:
a. The accident, incident, illness or injury occurred one year or more before the date of ‘settlement’;
b. The underlying claim did not involve a chronic illness/condition or major trauma;
c. The beneficiary does not receive additional ‘settlements’; and
d. There is no corresponding workers’ compensation or no-fault insurance claim.”
• GRG Comments – GRG supports a safe harbor option such as the one posed here, and believes the defined amount tied to this option is critical to this option having an operational impact. The gross settlement amount defined by CMS here must take into account the large volume of liability claims resolved annually. A defined amount set too low would not take this volume into account and would create operational inefficiencies in settlement programs nationwide.
b) “The amount of the liability insurance (including self-insurance) ‘settlement’ is a defined amount or less and all of the following criteria are met:
a. The individual is not a beneficiary as of the date of ‘settlement’;
b. The individual does not expect to become a beneficiary within 30 months of the date of ‘settlement’;
c. The underlying claim did not involve a chronic illness/condition or major trauma;
d. The beneficiary does not receive additional ‘settlements’; and
e. There is no corresponding workers’ compensation or no-fault insurance claim”
• GRG Comments – A safe harbor provision for those individuals who lack the proper Medicare enrollment status (either currently enrolled or “reasonable expectation” of enrollment within 30 months of settlement) would create settlement efficiencies. However, we recommend CMS clarify the phrase ‘expect to become a Medicare beneficiary within 30 months of the date of settlement’. In conjunction with this Option 2(b), we recommend CMS apply the standard of “reasonable expectation” as is currently in use in workers’ compensation context when determining workload review thresholds.
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 the GRG Medicare Set-Aside Team at (888) 556-7526 or firstname.lastname@example.org 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 us to discuss how we can establish a formalized approach to MSA compliance within your firm.
We appreciate your feedback on the Proposed Option 1 and Option 2 as we prepare our comments to CMS. Further, we will continue to keep you up to date as additional information becomes available.