CMS Issues ANPRM Regarding MSP and Future Medicals

On June 14, CMS, through the DHHS, issued an ANPRM regarding “Medicare Secondary Payer and Future Medicals.” The industry will have until 5 PM of the 60th day after the proposed rules are published (Monday, August 13th) to comment on these proposed rules. A copy of the Notice can be found here:

CMS has essentially provided seven (7) different future medical options to the industry, as well as invited additional options to be proposed to CMS during the comment period. The majority of these options pertain to liability settlements; however, a great deal of the options would also be applicable in workers’ compensation settlements. It is important to note that options 1-4 pertain to current Medicare beneficiaries as well as those who are not yet beneficiaries. Options 5-7 are only available to beneficiaries.

Option 1 (applicable in workers’ compensation or liability): The Medicare beneficiary or individual pays for all related future medical until the settlement is exhausted and documents accordingly. CMS would not review documentation in conjunction with this option but may request documentation from beneficiaries at random.

Option 2: Medicare would not pursue future medicals in liability settlements that contain no workers’ compensation/no-fault claim element and the settlement is below a defined amount. CMS is seeking commentary on what that amount should be.

Option 3 (applicable in workers’ compensation or liability): MSP recovery is limited to conditional payments only if the beneficiary acquires a physician attestation that no future treatment is anticipated. If the date of completion is after settlement, future medicals would be limited through that date.

Option 4: Implement a formal MSA and CMS approval process for liability insurance MSA amounts, similar to what is currently in place for workers’ compensation. The “individual/beneficiary” would submit the proposed MSA to CMS.

Option 5: If the beneficiary participates in any of the new MSPRC conditional payment recovery options (settlement under $300- no recovery, settlement under $5,000- fixed percentage payment, or settlement under $25,000- self-calculation of payment), future medicals would also be considered satisfied.

Option 6: (a) If ORM is present (which would apply generally to workers’ compensation, no-fault and lifetime medicals that are imposed by law) CMS would take an upfront payment of the future medical amount that is set aside for Medicare covered treatment. This option would be used in place of self-administration or custodial accounts as long as CMS has reviewed and approved a proposed MSA amount. (b) Where there is no ORM and the beneficiary receives a settlement, an upfront payment can be made to Medicare in the amount of a specified percentage. This option would most often apply in liability situations.

Option 7: Medicare would not pursue future medicals in cases where CMS has granted compromise or waiver of recovery for conditional payments in relation to that case.

This ANPRM is likely in response to the GAO Report in which the GAO recommended that CMS develop guidance regarding liability and no-fault set aside arrangements, in addition to other recommendations to make the MSP system run more efficiently. Click here for our prior blog entry on the GAO Report.

PMSI will continue to monitor the progress of this ANPRM. We certainly welcome your comments and suggestions on the viability of these options and any other options that you feel would clarify the issue of how future medicals are to be handled in workers’ compensation and liability settlements.

2 thoughts on “CMS Issues ANPRM Regarding MSP and Future Medicals”

  1. This has become so cumbersome for insurers to do on every single liability claim, regardless of whether there is any Medicare/Medicaid involved. I believe option #2 is the most viable for both CMS and the insurance companies with CMS not pursuing any reimbursement on claims below $100,000 where there is no WC or No-Fault claims. Under $100,000 you are usually dealing with minimal type injuries that will not have residual treatment and thus would not impact Medicare in the future. It would eliminate about 80% to 90% of the liability claims on the books from the process and would allow settlements to move much more quickly for claims <=$100,000.

  2. We appreciate your feedback Peter. Selecting a dollar threshold may be difficult to apply across all claims due to things such as comparative negligence, policy limits, and if the settlement is primarily addressing special damages, general damages, future needs or all three. These issues, other issues, and the points you made in your comment highlight the need for all stakeholders to provide input on the ANPRM. Hopefully, once all of these issues are raised, CMS will be in a better position to create a process that both protects its interests and is reasonable, clear and straight forward.

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