Tag Archive for: Regulations


OMB Rejects CMS’ Liability MSA Rule

Last week, the Centers for Medicare and Medicaid Services (CMS) withdrew its recently submitted Notice of Proposed Rulemaking (NPRM) related to protecting Medicare’s interests as a secondary payer with respect to future medical obligations in liability settlements, because it failed to gain approval from the Office of Management and Budget (OMB).

Although the exact reasons for the OMB’s disapproval are not known, the OMB can reject a proposed rule for a variety of reasons, including costs v. benefits, conflict with other agencies or other rules, economic impact, etc.

In June of 2012, CMS took the first step in this process by releasing an Advanced Notice of Proposed Rulemaking (CMS-6047-ANPRM) to solicit public comment on how to implement an MSP process for liability settlements. This ANPRM received many public comments, including one from Medivest, where we strongly encouraged CMS that it is a “practical necessity” that CMS allow an equitable reduction of a liability Medicare Set-Aside (MSA) whenever a liability claim settled for less than full value.

On August 1, 2013, CMS took the next step by sending a Notice of Proposed Rule Making (NPRM) to OMB for their approval. The NPRM was never made public because OMB did not approve it, and on 10/8/2014, CMS withdrew it.  So unfortunately, we do not know what CMS’ specific plan was regarding liability MSAs. However, we fully anticipate that CMS will submit another NPRM to the OMB in the near future.

So while it seems we came very close, nothing has changed regarding how settling parties should consider and protect Medicare’s interests as a secondary payer in liability claims.  We still have a 1980 Medicare Secondary Payer (MSP) statute to deal with, and the existing best practice of analyzing each case to determine if a liability MSA is the best risk assessment decision should still continue.

To view Medivest’s blog announcing the June 2012 CMS-6047-ANPRM click here.

To view Medivest’s response to CMS-6047-ANPRM click here.

To view official OMB notification of withdrawn the NPRM click here.




CMS Issues SMART Act Regulations Regarding Web Portal

On September 20, 2013, the Centers for Medicare and Medicaid Services (CMS) published an “interim final rule with comment period” in the Federal Register to comply to Section 201 of the Strengthening Medicare and Repaying Taxpayers Act of 2012 (the SMART Act).

This interim rule adds new regulations at 42 CFR 411.39, which states that by January 1, 2016, the CMS will implement a fully functional web portal that will enable a beneficiary (or their attorney, other representative, or applicable plan) to obtain dates of services, provider names, diagnostic codes, dates of service and final conditional payment amounts.  Also, it will add additional functionality to the web portal, permitting users to notify CMS that the specified case is approaching settlement, obtain time and date-stamped final conditional payment summary forms, and insure that relatedness disputes and other discrepancies are addressed within 11 business days of receipt of dispute documentation.

Interestingly, CMS waived its normal “notice and comment” rulemaking approach, stating that it was not in the public’s best interest and would delay public access to the web portal.  This process would have provided “proposed” regulations, followed by a comment period, and then final regulations.  Instead, CMS chose to use the  “interim final rule with comment period” approach, which allows 90 days for public comments, but implements final regulations on November 19, 2013, regardless of comment.

To view the interim final rule with comment period as it appeared in the Federal Register, click here.


CMS Issues Seven Guidance Statements in a Single Day

CMS has been very busy lately working to improve its Medicare Secondary Payer (MSP) program as became apparent on Friday, September 30th when it announced seven separate guidance statements on the “MMSEA 111 What’s New ” section of its website.

1. Delay in Section 111 Reporting for Certain Liability TPOCs – CMS has delayed Section 111 reporting for certain liability Total Payment Obligation to Claimant (TPOC) settlements, awards or other payments.   No other Section 111 reporting dates were changed.  This change is optional.  Previously, all liability TPOCs incurred in Q4/2011 where to be reported in Q1/2012.  That still applies to TPOCs that exceed $100,000, but the new reporting timetable for Section 111 liability TPOCs under $100,000 now depends on the TPOC amounts.  So, here is a complete new Section 111 timetable for all reporting types with the latest 9/30/2011 liability TPOC changes highlighted with asterisks.

Section 111 Timetable Chart – as of September 30, 2011

Type Capture Date Report Date
Workers’ Comp ORM Q4/2010 and prior Q1/2011
Workers’ Comp TPOC Q4/2010 Q1/2011
Liability ORM Q4/2010 and prior Q1/2011
*Liability TPOCs > $100,000 *Q4/2011 *Q1/2012
*Liability TPOCs > $50,000 *Q2/2012 *Q3/2012
*Liability TPOCs >$25,000 *Q3/2012 *Q4/2012
*Liability TPOCs over min threshold *Q4/2012 *Q1/2013
Min threshold, TPOC ≤ $5,000 2012 exempt
Min threshold, TPOC ≤ $2,000 2013 exempt
Min threshold, TPOC ≤ $600 2014 exempt
no min threshold 2015 and thereafter

Note: The four rows with asterisks reflect the new timetable changes announced on 9/30/2011.  The minimum thresholds remain the same.

2. Policy Guidance Related to Exposure, Ingestion, Implant Issues and December 5, 1980 – CMS stated that it historically has not asserted a Medicare Secondary Payer (MSP) recovery claim against settlements where the date of incident (DOI) occurred before 12/5/1980, which is the effective date of the MSP Statute.   CMS then went on to clarify that for purposes of determining the DOI, it uses:

  • the date of last exposure for environmental hazard cases,
  • the date of last ingestion for ingestion cases,
  • the date of last physical exposure for ruptured medical implant cases and..
  • the date the implant was removed for non-ruptured implant cases.

Finally, CMS said that when reporting both under Section 111 and to the COBC, the date of first exposure/date of first ingestion/date of implantation is the date that MUST be reported as the DOI.

3.  An Alert Related to Qualified Settlement Funds – CMS announced a limited exception to Section 111 reporting when settlement funds are paid to a Qualified Settlement Fund (QSF).  Under this exception, Section 111 reporting is NOT required if: (a) the settlement is a liability TPOC only payment, (b) the settlement payment is issued by the QSF in connection with a bankruptcy, and (c) the settlement funds where paid to the QSF after October 1, 2011.

4.  A Policy Memorandum for Liability Medicare Set-Asides Regarding Treating Physician Certification – In its very first policy Memorandum addressing Liability Medicare Set-Asides (LMSA), CMS addressed the issue of how to “consider Medicare’s interest” in liability settlements where future injury related medical treatment will not be required.  CMS said that if the treating physician certifies in writing that no future medical treatment is required, Medicare will consider its interest satisfied and there is no need an LMSA for review.

5. The MSPRC implements a Self-Service Phone Feature –  The Medicare Secondary Payer Recovery Contractor (MSPRC) has added a 24/7, no wait-time, self-service phone feature to its customer service line that gives callers up-to-date demand and conditional payment amounts and the dates those letters were issued without having to speak to a customer service representative.

6. Option to Pay a Fixed Percentage for $5,000 or less Liability Settlements – Beginning in October 2011, CMS will implement an option to a fixed percentage of certain trauma-based liability cases with settlements of $5,000 or less.  More details on this will be posted at on or before October 21, 2011.

7.  Upcoming improvements to the MSP program – CMS announced the following upcoming improvements expected within the next 3-9 months:

  1. The implementation of a MSPRC Web portal where a beneficiary/representative can obtain information about Medicare’s claim payments, demand letters and input settlement and disputed claim information.
  2. The implementation of an option that allows for an immediate payment to Medicare for future medical costs that are claimed/released/effectively released in a settlement.
  3. The implementation of a process that provides Medicare’s conditional payment amount, prior to settlement in certain situations.

Again, like several previous news announcements from CMS, this is very encouraging news.  Stay tuned; we will keep you informed as more developments follow.


Western District of NY Issues MSP Protocol

On May 6, 2011, Assistant U.S. Attorney for the Western District of New York (WDNY) Robert G. Trusiak issued the WDNY Medicare Secondary Payor Protocol, which outlines a voluntary standard operating procedure for resolving the future medical component of a liability settlement involving a Medicare beneficiary. While this policy was not released by the Centers for Medicare and Medicaid Services (CMS), it is the first bit of guidance offered by the federal government on the issue of Liability Medicare Set Asides (LMSAs).

Before the application for MSP compromise can be filed with the US Attorney’s office for the WDNY, the following criteria must be met:

  1. Medicare must have been notified of the pending liability claim and subsequent settlement of the claim.
  2. A letter from the Medicare Secondary Payer Recovery Contractor (MSPRC) must be obtained stating that the conditional payment obligation concerning repayment of any Medicare liens related to the claim was resolved, or provide adequate assurances to that effect.

Once the application criteria has been met, appropriate steps must be taken to ensure the application includes the following:

  1. A copy of the MSPRC letter stating the matter concerning repayment for any Medicare liens related to the claim was reviewed and resolved or provide adequate assurances to the effect.
  2. Proposed LMSA concerning payment for the future medical items and services related to the claim.
  3. An agreed copy of the settlement agreement subject to the completion of MSP obligations.
  4. A joint statement from the applicants certifying the following:
    a. The value of the agreed settlement equals or exceeds $350,000.
    b. The plaintiff is a Medicare beneficiary as that term is defined under 42 C.F.R. §400.202.
    c. CMS was requested to approve the LMSA, but no substantive response has been received for at least 60 days from the date of the letter to CMS; and
    d. An affidavit from the preparer of the LMSA that it is true and correct based on the Medicare beneficiaries medical records and the injuries being released as well as in the conformance with the WCMSA submission checklist as published by CMS.

The U.S. Attorney’s office for the WDNY reserves the right to request additional information from the parties, however upon receipt of all required information will issue a release. The release will compromise the LMSA obligations related to the settlement, judgment, award or other payment. It is important to note that the WDNY MSP Protocol is not available for liability cases involving mass torts, and again, is not the policy of CMS.

On the positive side, this protocol does provide more peace of mind to those parties settling liability claims involving Medicare beneficiaries in the WDNY’s venue. However, while it is refreshing to see an arm of the federal government offer guidance on the issue of LMSAs, it should be noted that the agency given the task of enforcing the Medicare Secondary Payer (MSP) Statute, CMS, has not endorsed the policy at all. The last statement of the protocol says clearly, “This is not the policy of CMS”.

This protocol falls short of addressing the heart of the problem, which is CMS’ insistence on viewing LMSAs through the same lens as they have viewed WCMSAs. They are clearly two different beasts, and this does nothing to change that fact. For example this protocol leaves many questions such as what to do if the settlement is under $350K, or if apportionment of the set aside is an accepted practice. While we commend the WDNY for taking a position on this issue, it would be helpful to see them tackle the more controversial elements of handling LMSAs.

To view the WDNY MSP Protocol in its entirety, please click here.