CMS Seeks Feedback On Protecting Medicare's Interests Regarding Future Medicals

The US Centers for Medicare & Medicaid Services (CMS) has long taken the position that insurers, Medicare beneficiaries and others have an obligation to "protect Medicare's interests" under the Medicare Secondary Payer (MSP) laws with respect to claims involving liability insurance (including self-insurance), no-fault insurance, and workers compensation insurance (collectively, non-group health plans) when future medical care is claimed or a settlement, judgment, award, or other payment (for convenience, each a "settlement") releases (or has the effect of releasing) claims for future medical care. Future medical care is defined by CMS in this context as medical items or services provided after the date of settlement.

For years, affected parties have been asking CMS for guidance regarding the nature of such obligation to "protect Medicare's interests" and the steps that would be sufficient to fulfill such obligation. The absence of such guidance has presented a significant risk factor for Medicare beneficiaries, insurers and self-insurers. This risk is particularly acute for Medicare beneficiaries who could lose their future Medicare coverage for some period of time after settlement if Medicare determines that program interests have not been adequately considered.

Advance Notice of Proposed Rulemaking

On June 15, 2012, CMS posted in the Federal Register an Advance Notice of Proposed Rulemaking ( Notice) seeking comments on how Medicare beneficiaries (and other individuals) can meet their obligation to "protect Medicare's interests" with respect to non-group health plan claims when future medical care is claimed or the settlement releases (or has the effect of releasing) claims for future medical care. This Notice marks an important step forward, as it reflects CMS' intent to publish regulations addressing how insurers and others may protect Medicare's interests, as well as CMS' willingness to solicit stakeholder input.

Among other things, CMS is soliciting comments on (1) whether and how Medicare should implement a Medicare set aside (MSA) process in the liability context, (2) certain proposed definitions (such as "chronic illness/condition," physical trauma," and "major trauma") and (3) options set forth in the draft Notice.

Most interestingly, CMS asserts that:

if an individual or Medicare beneficiary obtains a 'settlement' and has received, reasonably anticipates receiving, or should have reasonably anticipated receiving Medicare covered...