CMS Withdraws Rulemaking on MSP and Future Medicals

We previously posted blogs regarding CMS working on a proposed rulemaking regarding Medicare Secondary Payer requirements and future medicals. Our initial blog with more information on this ANPRM can be found here. Our secondary blog which indicated that CMS was looking to move to the NPRM stage of the rulemaking can be found here.

CMS never did resume rulemaking last year in September as was previously indicated by CMS on their regulatory calendar. Instead, CMS took no noticeable action on the rulemaking until October 8, 2014 where they withdrew the rulemaking altogether. Notice of the withdrawal can be found here:

Within the rulemaking, CMS was considering providing various options pertaining to protecting Medicare’s interests with regard to future medicals in both workers’ compensation and liability cases. The most well known part of the rulemaking was around allocations in liability cases, as this would be the first official guidance published/provided by CMS with regard to allocations in liability cases, also known as liability MSAs (LMSAs).

So where does this leave us all with regard to allocations in liability cases, now that CMS has withdrawn the rulemaking? Although CMS has, for the moment, chosen not to clarify when and how parties can take Medicare’s future interests into account in liability cases, the Medicare Secondary Payer laws (MSP) still mandates that Medicare remain the secondary payer, both pre-settlement as well as post-settlement.

Additionally, there has been speculation in the industry that this is not the last we will see of this rulemaking, and that CMS plans to later re-draft and re-file the proposed regulations. It is unclear if and when this will happen, as CMS has silently withdrawn this rulemaking with no public comment. Therefore, the industry should expect that this rulemaking will eventually resurface.

While many have applauded the withdrawal of this rulemaking, an argument could be made that there would have been some benefit to finalizing the rulemaking. Perhaps it would have brought some certainty within the liability industry regarding when and how Medicare expects its future interests to be taken into account in liability cases.

There has continued to be ongoing confusion as to when and how to take Medicare’s interests need to be taken into consideration with regard to the future medical component of these claims due to the lack of guidance from CMS. We have seen this demonstrated in various case law across the country where courts have issued divergent opinions on whether LMSAs are required under the MSP.

Hearing from CMS on this issue would have provided some solidarity on this contentious issue so that liability settlements with Medicare beneficiaries could occur and the parties could have confidence that their settlement has complied with Medicare’s interests.

Helios will keep subscribers updated on any additional developments on this issue and forthcoming rulemakings.

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