Future Medicals and Medicare Secondary Payer: CMS Withdraws NPRM



This week the Centers for Medicare & Medicaid Services (CMS) withdrew the Notice of Proposed Rulemaking (NPRM) it submitted to the Office of Management and Budget back on August 1, 2013 relating to CMS’ intent in addressing future medical costs in workers’ compensation, automobile, liability insurance (including self-insurance) and no-fault claims.

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. 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.

CMS began the process of issuing those regulations in June 2012, when it released an Advanced Notice of Proposed Rulemaking (ANPRM) for these claims. By originally submitting a NPRM for review by the Office of Management and Budget (OMB), CMS revealed that it intends to take the next step in the regulatory approval process.

In July 2014, representatives from Garretson Resolution Group met with government officials, as part of the public commentary process. During that meeting, 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.

We fully expect CMS to redesign the NPRM and resubmit to OMB at a later date. 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. You should review each fact pattern to determine if an MSA is warranted based on the case specific facts in light of the current statutory, regulatory and administrative guidance from CMS as well as relevant case law. Part of that includes identifying whether a settlement pays dollars for injury-related future costs of care, which would otherwise be Medicare-covered. Documenting the file with those conclusions and their underlying rationale represents best practices in today’s environment.

The Garretson Resolution Group’s team of experts will update you on significant milestones as future cost of care regulations are developed. For more information, please visit our website or call John Cattie at (866) 694-4446 (jcattie@garretsongroup.com).

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