In the fall of 2018, the Department of Health & Human Services/CMS published an abstract of a proposed rule entitled “Miscellaneous Medicare Secondary Payer Clarifications and Updates.” The proposed rule is described as one that is both “major” and “economically significant.” The purpose of the rule is to “ensure that beneficiaries are making the best health care choices possible by providing them and their representatives with the opportunity to select an option for meeting future medical obligations that fit their individual circumstances, while also protecting the Medicare Trust Fund.” The abstract further states “Currently, Medicare 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.” September of 2019 has been identified as the target date for the Notice of the Proposed Rule Making.
The proposed rule also references related Regulatory Information Number (RIN) 0938-AR-43. This proposed rule was entitled “Medicare Secondary Payer and “Future Medicals.” The abstract claimed that the proposed rule “would announce CMS’ intention regarding means beneficiaries or their representatives may use to protect Medicare’s interest with respect to Medicare Secondary Payer (MSP) claims involving automobile and liability insurance (including self-insurance), no-fault insurance, and workers’ compensation where future medical care is claimed or the settlement, judgment, award, or other payment releases (or has the effect of releasing) claims for future medical care.”
Recall this proposed rule discussed several options for considering Medicare’s interest in a settlement. The options included limiting Medicare’s interests in certain types of settlements, securing an attestation from the treating physician as to completion of care, submitting an MSA to CMS for review, a self-calculated or fixed payment option for future medical, upfront payment to Medicare for future medical or a compromise or waiver of Medicare’s interest in future medical. This proposed rule never moved forward after the Advance Notice of Proposed Rule Making comment period ended in August of 2012.
The posting of the proposed rule has led to speculation in the MSP compliance industry that CMS is going to move forward with a review process for liability MSAs. There are however several clues that would suggest a different answer. Given Medicare’s current Part D opioid policy, CMS’ recognition of an issue with opioids in the WCMSA, the reference to the prior proposed rule that considered upfront payment to Medicare for future medical, and the stated purpose of the current proposed rule, i.e. to “ensure that beneficiaries are making the best health care 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,” Medicare may be contemplating a different way to administer WCMSA funds that include opioid projections.
Consider a scenario involving a Medicare beneficiary and a CMS reviewed WCMSA that includes significant funds for opioids. Under the current WCMSA self-administration process, the beneficiary cannot take advantage of a Medicare Part D plan’s supervision when it comes to opioids. Although the Medicare Trust Fund is protected, the Medicare beneficiary’s unlimited access to the funds for injury related opioids does nothing to curb opioid abuse. This problem however can be solved by a change in the way the WCMSA funds are administered. If CMS were to allow beneficiaries to enroll in Medicare Part D plans to secure the injury related opioid oversight/management, and beneficiaries were required to reimburse the Part D plans from the WCMSA funds at the end of the year for the Plan’s payment of injury related Medicare covered drugs, Medicare would remain a Secondary Payer and the risk of opioid abuse would be decreased. Adding a requirement of professional administration of the WCMSA to ensure that the Part D plans are reimbursed with a reversionary interest back to the carrier would also help to ensure the funds are available. This type of reimbursement scenario has already been used by the World Trade Center Health program established under the Zadroga Act. Another way to do this is to have the beneficiary make the up-front payment of the portion of the WCMSA funds allocated for pharmacy to the Part D plan, with the Part D plan being responsible for the administration of these funds. If Medicare is contemplating any of this, it would be “major,” “economically significant” and consistent with CMS’ plan to combat the opioid epidemic.
As noted earlier, there is also speculation that this proposed rule will eventually result in CMS issuing guidance when it comes to liability MSAs. The guidance may include the establishment of a voluntary review process for liability that is similar to the arrangement in place for review of WCMSAs in workers’ compensation settlements. Given the difference between liability settlements and workers’ compensation settlements, it is speculated that CMS would be considering some type of apportioned liability MSA.
Whether or not this proposed rule is intended to address liability MSAs, parties in a liability settlement should avoid the appearance of an attempt to cost shift to Medicare the responsibility for payment of medical expenses for the treatment of the injury related condition. An apportionment of the negotiated settlement funds in an objectively reasonable manner would reduce the risk that Medicare may deny future injury related care. Although CMS has not provided the same degree of “guidance” in the area of liability MSAs as in the area of workers’ compensation MSAs, MSP compliance obligations are determined by the MSP Act. The MSP Act clearly identifies liability plans as primary plans in certain situations in which Medicare is a secondary payer.