On June 14, 2012, the Centers for Medicare & Medicaid Services (“CMS”) released 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 for sixty (60) days from the date that the ANPRM is published in the Federal Register.


If you have a few moments, would you please read this DRI Medicare Secondary Payer (“MSP”) Task Force Advisory and respond to the address noted below with some comments?  We think it is worth your time.  We are working to influence and secure additional clarity from CMS about how any new obligation will impact resolution of liability claims (single event and mass tort) in the years to come.  Moreover, defendants and claimants are all “equally yoked” in efforts to ensure any new obligation is clearly defined and fact-specific as well as scalable and cost/time efficient to administer.

Background

In the memo, CMS acknowledges that parties in the liability settlement context have been seeking definitive guidance on the issue of future medicals expenses in liability settlements.  CMS further acknowledges that while such guidance and a corresponding process has been available in workers’ compensation context, no such guidance or process has been established for meeting MSP obligations with respect to future medicals in the liability settlement context to date.  As such, the CMS memo specifically requests comment on “whether and how Medicare should implement such a similar process in liability insurance situations as well as comment on … proposed options” outlined in the memo.

The Proposed Options

CMS states that its interests should be considered in every settlement where the claimant, “reasonably anticipates receiving, or should have reasonably anticipated receiving Medicare covered…services after the date of “settlement…”.  To accomplish this purpose, CMS proposes options  ranging from absolute exemptions on one end of the spectrum (i.e., CMS defined a set of circumstances in which no further action would be necessary / no “set aside” required) to alternatives on the other end of the spectrum that involve a) the beneficiary paying for all future injury-related care out of his/her settlement proceeds until they are exhausted or b) submitting a proposed Medicare Set Aside arrangement (similar to the current process in workers’ compensation).With regard to the latter options, it is important to note that CMS acknowledges that perhaps thresholds could be established (i.e., a dollar amount below which no action is necessary even if one of the other exemptions do not apply).

Further, CMS appears to be considering a process whereby the beneficiary could pay the entire MSA amount “up front” as opposed to having to administer a set aside arrangement into the future.In addition, one can read the memo to suggest that CMS recognizes that efficiency will be gained by creating certain injury classifications for purposes of pre-screening cases as eligible for the various options (e.g., if claim involves injury classification with Injury Severity Score (“ISS”) below x, then no further action required).

Medicare has also recognized the importance of including procurement cost offsets in their calculations.

A link to the full CMS memo can be found at: http://www.gpo.gov/fdsys/pkg/FR-2012-06-15/html/2012-14678.htm.

What to Expect from the DRI MSP Task Force?

Without doubt, the options and related process that areultimately implemented must have scale and efficiency.Toward that end, the DRI MSP Task Force will be preparing commentary to submit to CMS and would be pleased to hear from you as we prepare our memo.  Our hope is to help assert a collective voice for clarity, efficiency and practicality. Please contact John Cattie, Vice Chair of the DRI MSP Task Force, at (704) 559-4300 or jcattie@garretsongroup.com to provide those comments and express your concerns.  If emailing, please put “DRI MSP Task Force: Future Medicals and Liability Claims” in the subject line.

The DRI MSP Task Force will be monitoring all guidance from CMS to continue to update our guidance and advice to DRI members.  All DRI members should begin to consider how such proposed rules may affect their clients.  The DRI MSP Task Force will continue to provide educational outlets (such as the DRI MSP Task Force website at: http://www.dri.org/News/MSP as well as our next MSP Task Force webcast on LMSAs [date to be announced]).  

As we read between the lines of the CMS memorandum, we are very pleased to see that CMS recognizes that a) there should not be a default rule under which an MSA is required in every liability settlement; b) screening should be done on a fact-specific, case-by-case basis; and c) such screening must be highly-scalable and time/cost effective.

We appreciate your feedback as we prepare our comments to CMS.  Further, we will continue to keep you up to date as additional information becomes available. All comments and feedback should be submitted to John Cattie at jcattie@garretsongroup.com with the subject line “DRI MSP Task Force: Future Medicals and Liability Claims.”

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