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CMS-6047-ANPRM – CMS Seeks Public Comments on Liability MSAs

An Advanced Notice of Public Rulemaking (ANPRM), CMS-6047-ANPRM, from the Centers for Medicare and Medicaid Services (CMS) was published in the July 15, 2012 Federal Register.  This notice is likely a response by CMS to numerous requests for guidance that clarifies how to resolve obligations regarding “future medicals” in liability settlements under the Medicare Secondary Payer (MSP) statute.

Since 2001, CMS has a recommended a formal, yet voluntary, Medicare set-aside (MSA) arrangement for workers’ compensation settlements to satisfy obligations under the MSP statute.   According to a recent Government Accountability Office report, the MSA program saved the Medicare Trust Fund approximately $1.1B in 2011.

CMS is now soliciting public comment on whether and how Medicare should implement a similar process for liability insurance settlements.  In addition, CMS is requesting comment on some proposed definitions and outlined options.   Their goal is to “ensure that the process related to ‘future medicals’ is understandable, efficient, and reflects industry practice, while protecting Medicare beneficiaries and the Medicare Trust Funds.”

Medicare is considering seven options for addressing “future medicals”.  Options 1-4 would be available to Medicare beneficiaries and those who are not yet beneficiaries.  Options 5-7 would be available to beneficiaries only.

  1. The beneficiary pays for future medicals out of the settlement funds, until exhausted, with random CMS audits.
  2. Medicare would not pursue future medicals if certain conditions are met including relating to the amount of the settlement, the type of injury, the injured persons Medicare status, etc.
  3. The injured person provides an attestation regarding the Date of Care Completion from his/her treating physician.
  4. The individual/beneficiary submits a Liability MSA for CMS’ review and approval.
  5. The beneficiary participates in one of the three new Medicare recovery options regarding a $300 threshold, a fixed payment option or $25,000 or less self-payment option.
  6. The beneficiary makes an upfront payment to Medicare.
  7. The beneficiary obtains a compromise or waiver of recovery and Medicare would have the discretion to not pursue future medicals.

CMS is requesting comment on the feasibility of all of these options, as well as any additional options.  Comments must be received within 60 days.

It is anticipated that the next step, after reviewing comments from this ANPRM, will be for CMS to publish proposed regulations, which will prompt another public comment before becoming final.  A flood of comments from a host of interested parties is expected.

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