“Major” “Economically Significant” Federal Rulemaking Could Affect Virtually All Forms of Injury-related Recoveries to Medicare Beneficiaries

Twice per year, the Centers for Medicare and Medicaid Services issue a "United Agenda" which lists regulations under development.

In a recently released notice - the “Spring 2020 ANPRM” – CMS indicated that plaintiffs should expect amplified obligations to Medicare:

“….. this rule would clarify that an individual or Medicare beneficiary must satisfy Medicare’s interest with respect to future medical items and services related to such settlements, judgments, awards, or other payments.  This proposed rule would also remove obsolete regulations.” (emphasis added)

         This language seems to confirm an emphasis being put on the beneficiaries and their representatives/counsel to assure Medicare’s interest is resolved as part of liability settlements.

Similarly, the prior Fall 2018 United Agenda from CMS states that CMS is proposing a “major” “economically significant” rule which will “ensure that beneficiaries are making the best health care choices possible by providing them … with the opportunity to select an option for meeting future medical obligations … while also protecting the Medicare Trust Fund.”  (emphasis added)

WHEN IS THIS GOING TO HAPPEN?

If you are anxiously awaiting CMS issuance of rules for liability set asides, you will have to wait until at least next month [August], and with CMS focused on COVID-19 response issues this may be quite optimistic.  That said, there is a good chance injury cases you start working now for CMS beneficiaries will be impacted by new rules by the time your case is ready to resolve - so it’s worth continuing to track the issues.

WHAT DOES IT MEAN? 

UNTIL THE DRAFT REGULATION IS PUBLISHED IT IS UNCLEAR. 

HOWEVER, WE EXPECT THE FOLLOWING:

1. In one of the most significant potential changes, enforcement of violations, is likely to be focused on the denial of services. This seems to indicate CMS is going to focus responsibility on the plaintiff instead of the liability carriers.

2. The statutory responsibility of plaintiffs and their counsel will remain unchanged.

3. Perhaps most important to an active PI practice is Medicare Advantage Plans (MAOs) are likely to be included - since they are gaining ground in asserting an assignment of the CMS lien rights with regard to tort recoveries.

4. The proposed regulation provides more evidence the $54 million increase in the annual CMS contract budget for the secondary payer contractor will lead to actual changes in the SPA in the near term. 

5. The ICD-10 codes reported by the liability carrier at the time of settlement will be a base “injury”.

6. The new regulation will have “options” for meeting the obligations under the SPA that apply to both workers’ comp and personal injury claims/settlements.  Despite established history and practice, the MSA approval system in place for WC claims is a voluntary review program with deference given to the WCMSA reference guide - but not governed by regulatory mandates.  That seems to be in the process of changing.

7. No advance reviews/approvals - LMSAs will be reviewed only after settlement has been reported.

8. CMS will publish some sort of reference guide.

9. Some monetary thresholds will be in play: expect to see multiple tiers.  For example, below a gross settlement amount (maybe $250K) – no requirement for an LMSA. In the middle tier, CMS will apply some sort of formula to determine set-aside amounts.  In the highest tier (possibly $750K +) - full LMSA along the lines of those done currently in the workers’ compensation setting.

We have limited specific guidance from CMS on the forthcoming rulemaking.  While the proposed rule remains unclear, it appears to encompass an extremely broad scope of injury-related recoveries.  The proposed rule will address problems in personal injury matters arising from the fact CMS “does not provide its beneficiaries with guidance to help them make choices regarding their future medical care expenses when they receive automobile and liability insurance (including self-insurance), no-fault insurance, and workers' compensation settlements, judgments, awards, or payments, and need to satisfy their Medicare Secondary Payer (MSP) obligations."

The ANRPM issued in the Fall of 2019 contained the following abstract:

“This proposed rule would ensure that beneficiaries are making the best healthcare choices possible by providing them and their representatives with the opportunity to select an option for meeting future medical obligations that fits their individual circumstances, while also protecting the Medicare Trust Fund.” 

Basically, a word salad with no dressing.  Until we get more detail from the federal government, the best we can do is monitor developments and be vigilant regarding Medicare issues in ongoing personal injury matters. 

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