Recent Important Medicare Secondary Payer Updates; Don’t miss Sanderson Firm’s Webinar on Medicare Set-Asides on March 15, 2022!
There has been a great deal of activity suddenly occurring early on in 2022 impacting Medicare Secondary Payer (MSP), specifically, Medicare Set-Asides (MSAs), in both workers’ compensation and general liability claims.
1) The Centers for Medicare and Medicaid Services (CMS) is moving on two legislative rules impacting Medicare Secondary Payer: 1) a Proposed Rule on “Medicare Secondary Payer (MSP) and Future Medicals,” which is believed to be a rule on Liability Medicare Set-Asides (LMSAs), and 2) CMS is also moving on a Final Rule on Medicare Section 111 Reporting Civil Monetary Penalties (CMPs), which will then allow CMS to penalize noncompliant workers’ compensation, general liability, and no-fault Responsible Reporting Entities (RREs) up to $1000 per day/per claim.
We have certainty that both Rules are moving forward because the text of these rules have been sent by CMS office to the White House Office of Regulatory Information and Affairs (OIRA) for review. As far as process goes, both the Proposed and Final Rules need to be reviewed by OIRA before the Agency publishes them in the Federal Register (in the case of a Final Rule, typically with an effective date 60 days following publication). Since CMS has finished its work on the Proposed LMSA Rule and the Final Penalty Rule, the rules should be out in the coming weeks unless OIRA pushes back. And what happens after that is the million-dollar question:
As for the LMSA Proposed Rule, the Proposed Rule will be issued with a public comment period lasting 60 days. The industry can comment on CMS’ proposals and will take it under review before issuing a Final Rule. For those that recall the proposed rule on LMSAs a decade ago back from 2012, it included several methodologies/options to protect Medicare’s interest in settlement of liability claims with Medicare beneficiaries, with one of the options being a review of the LMSA by CMS just as currently occurs with WCMSAs at the WCRC. Notably, there were other options listed in the alternative such as CMS considering the entire settlement as the “Future medical/MSA.” We will have to wait and see if the Proposed Rule looks anything like the old, proposed rule from 2012 that was subsequently withdrawn, and what parties settling liability claims with Medicare beneficiaries will need to do/change as far as settlement practices go with the need for an LMSA that may not have been presented previously.
As for the Final Rule on Section 111 Civil Monetary Penalties, there will be a 60-day period before the Final Rule is effective. However, once it is effective, CMS can then begin issuing penalties against noncompliant primary payers/RREs up to $1000 per day/per claim.
2) CMS has issued a Sources Sought Notice (SSN) for its MSA review contractor that reviews/approves MSAs. The SSN states the following: “[this sources sought notice is not an invitation for bid, request for proposal, or other solicitation, and in no way obligates CMS to award a contract. The sole intent of this Sources Sought Notice is to obtain capabilities for procurement planning purposes.”
The SSN specifically notes that CMS is seeking sources for contractors that would not only have to review Workers’ Compensation MSAs (WCMSAs), but also “other Non-Group Health Plan Medicare Set-Aside Arrangements (NGHPMSAs), which would mean that the new contractor would be tasked with reviewing Liability MSAs (LMSAs). With CMS moving on the LMSA Proposed Rule, as well as continuing to make it a requirement of its new MSA review contractor that it review both workers’ compensation and other MSAs such as Liability MSAs, it seems that we may have a policy on the requirement for LMSAs here soon. Capital Bridge LLC has been the WCRC Contractor since 2017, and it is unknown whether Capital Bridge will be re-awarded the contract or if another entity will win the bid once this SSN moves to a formal Request for Proposal (RFP). Stay tuned.
3) Non-Submit/EBMSAs WCMSA Reference Guide Update: As we previously blogged, just recently CMS hosted a webinar on its new WCMSA Reference Guide language regarding Non-Submit/Evidence-Based Medicare Set-Asides (EBMSAs). During that webinar, CMS confirmed that nothing from a regulatory or legal standpoint has changed. Our Webinar synopsis can be found here. CMS cannot automatically assume a Non-Submit/EBMSA is a burden shift to Medicare and must allow for the beneficiary to appeal any denial of benefits in front of an Administrative Law Judge (ALJ). Indemnified EBMSAs are just as viable a method to settling Medicare beneficiary workers' compensation claims, and legally permissible pursuant to 42 CFR 411.46(d)(2). Further, the regulations trump any guidance set forth by CMS. Sanderson Firm continues to offer traditional submitted MSAs, as well as Indemnified EBMSAs. Contact us to learn more about our various MSA offerings.
4) Lastly, we are excited to invite you and your colleagues to our upcoming webinar on MSAs where myself, and Special Guest Speaker Shawn Deane, General Counsel & SVP of Risk Management & Compliance at Ametros Corporation, will be discussing all the above and then some as it relates to the current state of Medicare Set-Asides in both workers’ compensation and general liability claims. Shawn and I will provide best practice tips given the current MSA environment on strategies to effectuating settlements with MSAs.
Register here: https://us06web.zoom.us/webinar/register/WN_z6Z6Yvl-R5WS-tojdNPB4Q
