October 1, 2017 Has Come and Gone… So What?

The Centers for Medicare and Medicaid Services (CMS or Medicare) has rescinded its most recent alert regarding Medicare Set-aside Arrangements (MSAs).  The anticipated date where CMS would have published some sort of guidance specific to Liability MSAs (LMSAs) or No-Fault MSAs (NFMSAs) has come and gone without any new information from CMS.  Therefore, the settlement community should continue its practices when considering compliance with the Medicare Secondary Payer Act (MSP Act) and corresponding obligations, which includes early involvement. 

Since the beginning of 2017, the settlement community has been receiving warnings and notifications that Medicare was preparing its computer systems to:  (1) begin processing LMSAs and NFMSAs; and (2) deny payments submitted to Medicare when an LMSA or NFMSA exists.  Many of these warnings included a targeted go-live date of October 1, 2017.  Well, that date has come and gone, and it seems that Medicare may have blinked.

Most recently, an alert was released on September 19, 2017 (MLN Matters Number SE17019) that made repeated references to Medicare as the secondary payer behind these set aside arrangements.  While there were no new requirements, regulations, or recommendations, it was becoming increasingly clear that Medicare was gearing up for actual guidance specific to considering Medicare’s future interest when settling a workers compensation, liability, or no-fault claim.  Previously, a February 21, 2017, “change request” alert set a target date of October 1, 2017, for when internal Medicare’s (and related contractors) computer systems would be programmed to begin processing payments for correspondence to beneficiaries, specific to LMSAs and NFMSAs.  (See February 2017 Client Alert.) 

However, on October 3, 2017, Medicare rescinded its September 19, 2017, notification[1].  As a result, here is where we now stand:  (1) Medicare has made no changes to the February 21, 2017, “change request” alert; (2) no new guidance has been released since September 19, 2017, and even that guidance has now been pulled; and (3) there have been no regulations released and no policy memoranda published. 

So where does that leave the settlement community?  Without new guidance, regulations, or instructions, the standard remains the same: attorneys should familiarize themselves with the Medicare Secondary Payer rules early on in their process and take steps to educate themselves and their clients on how best to protect their red, white, and blue card.  Importantly, this message is no different than one we have sent for years - both before and after the Notice of Proposed Rule Making was issued[2] and then retracted[3].

So here is what you need to know about Medicare and future medicals:  

• Know the Rules. Know the MSP rules, and how they could affect the prosecution and settlement of your case.

• Plan for the Questions. Have a plan to address such concerns by taking steps early in your settlement process to identify when future costs of care may be at issue, whether through life care plans, testimony, or other case production documents.  If so, know what each party thinks about the issue.  Will you be asked to include Medicare addendum language?  Will you be asked to create a Medicare Set Aside?  If so, are you prepared to explain why this is not the only path towards MSP compliance?  If not, then you should work with MSP professionals to develop that case checklist as soon as you screen your client for Medicare entitlement status. 

• Document your Files. Regardless of the plan, properly documenting your files how you took into account Medicare’s rights (to remain a secondary payer post-settlement) will be a key part of the process.  This will protect you from any later second-guessing by CMS or others, and ensure that your client understands what this all means, and how your client’s red, white and blue card has been protected.

Remember that the only truism with respect to the MSA debate is that Medicare prefers a solution (set asides), but cannot mandate that solution without more regulations on the books.  MSAs are not the only way to protect your clients.  So, take Medicare’s 2017 one-time instructions to providers and contractors as a herald of things to come or take it as nothing.  As long as you have a plan to identify how future medicals may impact your clients’ goals, and you start that process early, you and your client will do just fine as Medicare figures it all out. 

We will continue to keep you informed as new developments occur. 

[1]  See https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/SE17019.pdf

[2] See https://web.garretsongroup.com/client-alerts/future-medicals-in-liability-cases-notice-of-proposed-rulemaking-on-the-horizon

[3] See https://web.garretsongroup.com/client-alerts/cms-withdraws-nprm