What Now? CMS Drops “Future Medicals” Proposed Rule
OCTOBER 3, 2022
The Centers for Medicare and Medicaid Services (CMS) has withdrawn for the second time a proposed rule regarding the Medicare Secondary Payer Act and “Future Medicals” – Medicare Secondary Payer and Future Medicals (CMS-6047). While this does not surprise many, it leaves interested stakeholders with many questions about how to consider Medicare’s interests and protect their clients and interests in workers’ compensation and personal injury cases.
CMS, Rulemaking, and Future Medicals
The recent action originates from the initial proposed rule released by CMS on June 15, 2012 – Medicare Program; Medicare Secondary Payer and “Future Medicals” – CMS-6047-ANPRM. Under this framework, CMS sought input from stakeholders on how they can meet their obligations to protect Medicare’s interest in all workers’ compensation and personal injury claims. A list of seven options was released, but the rulemaking process was withdrawn after receiving thoughtful comments on August 1, 2014.
This withdrawal led to confusion among attorneys and judges regarding how to deal with “future medicals” in injury cases. The result was inconsistent case law across the country, and fear CMS was applying extra-statutory requirements and conditions to the voluntary workers’ compensation Medicare Set-aside review and approval process. A recent example of this was the publication of v3.5 of the Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide and the high-spirited telephone Townhall on February 17, 2022.
The most recent rulemaking process was rebooted with the publication of Miscellaneous Medicare Secondary Payer Clarifications and Updates (CMS-6047-P) on December 6, 2018. The stated purpose of this “proposed rule would 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….” A final rule was expected to be released in early 2019. The expected release time frame for the final rule was extended several times for unknown reasons, which resulted in its ultimate withdrawal on October 13, 2022.
What Does This All Mean?
There are many theories as to why CMS withdrew a rule that was in process for several years. One theory could be a recent US Supreme Court decision questioning an agency’s Chevron deference and promulgating rules without congressional authorization. Notwithstanding the withdrawal of the “future medicals” proposed rules, Medicare has said much without saying anything.
Now is the time to educate yourself, your clients, and other interested stakeholders:
The Medicare Secondary Payer Act applies to all workers’ compensation and personal injury cases. 1 All parties to these settlements are required to consider Medicare’s interests. Payments made by Medicare before and after a settlement are “conditioned on reimbursement.” 2 Medicare needs to remain the “secondary payer” post-settlement.
Never forget that all workers’ compensation and personal injury settlements involving a Medicare beneficiary will be reported under Section 111 guidelines. 3 ICD-10 codes related to the claim will be reported to Medicare and flagged, and all post-injury payments will be denied. If future medical care is stopped, who will be on the hook for payment of future Medicare-reimbursable items and services?
As outlined in the Stalcup Memorandum (May 25, 2011) and Benson Memorandum (September 29, 2011), CMS remains committed to monitoring personal injury cases and enforcing the Medicare Secondary Payer Act.
Interested stakeholders should continue to educate themselves and be aware of the inherent risks of settling workers’ compensation and personal injury cases without guidance from legal compliance experts. This includes setting expectations in your engagement letter with any client, evaluating your case constantly, and not settling cases involving Medicare beneficiaries or those close to Medicare eligibility with impunity.
Conclusions
CMSs’ interests must be protected in all workers’ compensation and personal injury cases. The withdrawal of the proposed rulemaking means only one thing - the status quo remains – CMS does not mandate a specific mechanism to consider Medicare’s interests but prefers using a Medicare Set-aside. Failure to use a Medicare Set-aside or other tool to prevent the burden from being shifted onto Medicare can only hurt you and your client.
1 42 U.S.C. §1395y (b)(2)(A)(ii).
2 42 U.S.C. §1395y (b)(2)(B)(i).
3 42 U.S.C. 1395y(b)(8).
4 Excerpt from the Stalcup Memorandum, Sally Stalcup, MSP Regional Coordinator, CMS – Dallas Regional Office