Medicare Program; Medicare Secondary Payer and "Future Medicals"

SUMMARY: This advance notice of proposed rulemaking solicits comment on standardized options that we are considering making available to beneficiaries and their representatives to clarify how they can meet their obligations 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 when 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.

DATES: To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on August 14, 2012.

ADDRESSES: In commenting, please refer to file code CMS-6047-ANPRM. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.

You may submit comments in one of four ways (please choose only one of the ways listed).

1. Electronically. You may submit electronic comments on this regulation to http://www.regulations.gov. Follow the instructions under the "More Search Options" tab.

2. By regular mail. You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-6047-ANPRM P.O. Box 8013, Baltimore, MD 21244-8013.

Please allow sufficient time for mailed comments to be received before the close of the comment period.

3. By express or overnight mail. You may send written comments to the following address only: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-6047-ANPRM, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.

4. By hand or courier. If you prefer, you may deliver (by hand or courier) your written comments before the close of the comment period to either of the following addresses: a. For delivery in Washington, DC--Centers for Medicare & Medicaid Services, Department of Health and Human Services, Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 20201.

(Because access to the interior of the Hubert H. Humphrey Building is not readily available to persons without Federal government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.)

b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850.

If you intend to deliver your comments to the Baltimore address, please call telephone number (410) 786-1066 in advance to schedule your arrival with one of our staff members.

Comments mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period.

Submission of comments on paperwork requirements. You may submit comments on this document's paperwork requirements by following the instructions at the end of the "Collection of Information Requirements" section in this document.

For information on viewing public comments, see the beginning of the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Suzanne Kalwa, (410) 786-2536.

SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following Web site as soon as possible after they have been received: http://regulations.gov. Follow the search instructions on that Web site to view public comments.

Comments received timely will be also available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, please phone 1-800-743-3951.

I. Overview and Background

We are issuing this advance notice of proposed rulemaking (ANPRM) to solicit public comments on standardized options that beneficiaries and their attorneys or other representatives will be able to use to resolve MSP obligations related to settlements, judgments, awards, or other payments (hereinafter, for ease of reference in this document and unless otherwise indicated, "settlement(s)") involving future medical care while protecting Medicare's interest.

When the Medicare program was enacted in 1965, Medicare was the primary payer for all services, with the exception of those covered and payable by workers' compensation. In 1980, the Congress enacted the first of a series of provisions that made Medicare the secondary payer to certain additional primary plans. These provisions are known as the Medicare Secondary Payer (MSP) provisions and are found in section 1862(b) of the Social Security Act (the Act).

When specific conditions are met, these provisions in part prohibit Medicare from making payment if payment has been made or can reasonably be expected to be made by a workers' compensation law or plan, automobile and liability insurance (including self-insurance), or no-fault insurance. If payment has not been made or cannot reasonably be expected to be made promptly, Medicare is permitted to make conditional payments (that is, Medicare pays for medical claims with the expectation that it will be repaid if the beneficiary obtains a "settlement"). This is because, if Medicare makes conditional payments, the MSP statute imposes an obligation on the Secretary to recover those conditional payments, once it is established that another individual or entity is responsible for primary payment.

Primary payment responsibility on the part of workers' compensation, liability insurance (including self-insurance), and no-fault insurance is generally demonstrated by settlements, judgments, awards, or other payments. When a "settlement" occurs, the "settlement" is subject to the MSP statute because a "payment has been made" with respect to medical care related to that "settlement." By law, Medicare is subrogated to any right of an individual or any other entity to payment for items or services under a primary plan, to the extent of Medicare's payments for such medical items and services. Moreover, section 1862(b)(2)(B)(iii) of the Act provides a direct right of action to recover Medicare's conditional payments. This direct right of action, which is separate and independent from Medicare's statutory subrogation rights, may be brought to recover conditional payments against any or all entities that are or were responsible for making payment for the items and services under a primary plan. The government may also recover under the direct right of action from any entity that has received payment from a primary plan or the proceeds of a primary plan's payment to any entity.

Under its rights of subrogation and direct right of action, Medicare recovers for conditional payments related to the "settlement," regardless of when the items and services are provided. Further, Medicare is prohibited from making payment when payment has been made (that is, if the beneficiary obtains a "settlement"). Medicare remains the secondary payer until the "settlement" proceeds are appropriately exhausted. It is important to note that the designation future medical care ("future medicals") is a term specifically used to reference medical items and services provided after the date of "settlement."

II. Provisions of the Advanced Notice of Proposed Rulemaking

The primary purpose of this ANPRM is to respond to affected parties' requests for guidance on "future medicals" MSP obligations, specifically, how individuals/beneficiaries can satisfy those obligations effectively and efficiently. Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA), established mandatory MSP reporting obligations. Liability insurance (including self-insurance), no-fault insurance, and workers' compensation laws or plans are required to submit information, as specified by the Secretary, to Medicare related to claims resolved through "settlements," regardless of whether or not there is a determination or admission of liability (see 42 U.S.C. 1395y(b)(8)). While the topic of this ANPRM does not relate to the section 111 of the MMSEA reporting obligations directly, Medicare's ongoing section 111 of the MMSEA implementation efforts, as well as industry efforts to ensure compliance with section 111 of the MMSEA, have sensitized affected parties to other MSP obligations, specifically reimbursement obligations that have been long ignored or overlooked. As a result, affected parties are requesting clarity regarding "future medicals" MSP obligations and how to resolve them.

--This is a summary of a Federal Register article originally published on the page number listed below--

Advance notice of proposed rulemaking.

CFR Part: "42 CFR Parts 405 and 411"

RIN Number: "RIN 0938-AR43"

Citation: "77 FR 35917"

Document Number: "CMS-6047-ANPRM"

Federal Register Page Number: "35917"

"Proposed Rules"