Medicare Secondary Payer and "Future Medicals": An Analysis of Proposed Options 3 & 4



This Client Alert is the third in a series of Alerts you will receive over the next several 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 document 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, Proposed Options 3 and 4);
  2. and, 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 3 – “The individual/beneficiary acquires/provides an attestation regarding the Date of Care Completion from his/her treating physician.

GRG Comments – Proposed Option 3 contemplates situations where the individual/beneficiary can obtain a certification letter from the treating physician indicating that there are no more future injury-related care needs to be incurred. Such a letter could be obtained either pre-settlement or post-settlement. GRG believes this is a workable solution pre-settlement, but may pose issues post-settlement unless CMS provides a clear standard for who is liable for future medicals. We envision scenarios whereby an individual/beneficiary may be nearing the Date of Care Completion at the time of mediation, but the parties desire to actually have the treating physician attestation in hand before reaching any final accord.

Proposed Option 4 – “The individual/beneficiary submits proposed Medicare Set Aside Arrangement (MSA) amounts for CMS’ review and obtains approval.”

GRG Comments – GRG believes a part of the overall solution should include some ability for the individual/beneficiary to submit a proposed MSA to CMS for review and approval. Having said that, CMS would need to have the resources in place in order to provide a timely review of the MSA proposal. A better solution would be that CMS allow an individual/beneficiary’s MSA allocation calculation to be self-actuating to avoid placing undue stress on the agency and to allow for finality at the time of settlement. By instituting a process which allows for MSA allocation calculations to be self-actuating, individuals/beneficiaries would be able to address this issue with the same certainty as if CMS reviewed/approved the MSA allocation without placing undue stress on agency resources. In order to put this process in place, CMS may look to entities who have the experience and resources to accommodate the complexity and volume of MSA allocations which would be calculated under any final rules instituted. In the absence of a full resource solution from CMS, a self-actuating solution could stand on its own merits as beneficiaries and those the produce the work product (plaintiffs’ counsel and MSP compliance entities) are already bound by the integrity of their work product.

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 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 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 Proposed Options 3 and 4 as we prepare our comments to CMS. Further, we will continue to keep you up to date as additional information becomes available.

¹CMS’ proposed options include the following: if an individual or Medicare beneficiary obtains a settlement (or judgment or other payment) 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 (judgment or other payment), he or she can satisfy Medicare’s interests with respect to future medicals through any of the following actions: (1) having the injured person pay for and document the payment of 100% of all related future medical expenses out of their settlement proceeds until they are exhausted; (2) (CMS) waiving its future interest if the gross settlement value is below a certain threshold and the claimant has a particular Medicare entitlement status; (3) (CMS) waiving its future interest if a treating physician indicates that the claimant will not need any future injury-related care; (4) the claimant funding an MSA to cover all of his/her future Medicare-covered services; (5) CMS would waive any interest in future medicals where the claimant participates in one of three recently adopted short-form resolution methods introduced by Medicare for certain liability settlements (no recovery if certain settlements are less than $300, where CMS receives 25% of settlement for past conditional payment reimbursement where gross settlement value is less than $5,000, or where self-calculating the reimbursement amount due Medicare if the gross settlement value is less than $25,000). Read more about these updates here.

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