Future Medicals in Liability Cases

ISSUE:

The Center for Medicare and Medicaid Services (CMS) has informally stated on numerous occasions that there is an obligation to protect Medicare’s interest in the payment of future medical costs arising from liability claim settlements.  CMS, however, has neither defined this obligation, nor demonstrated a legal basis for its position.  The MSP statute is clear that CMS should have no role in such issues, as the Agency is prohibited from paying for healthcare up to the amount of an available settlement or other third party funds for such costs of care.  It is the MARC Coalition’s position that that CMS is prohibited from recovering amounts allocated to non-medical loss in liability settlements.[1]

BACKGROUND:

In 2012 CMS published in the Federal Register an Advanced Notice of Proposed Rulemaking (ANPRM) seeking input on how to address MSP future medicals in liability cases.  77 Fed. Reg. 35917 (June 15, 2012).  MARC submitted comments on the ANPRM in August 2012 – before the SMART Act was enacted.  In September 2013, CMS submitted to the Office of Management and Budget (OMB) a draft proposed rule for review and approval prior to publication in the Federal Register.  In response, MARC, along with several other stakeholders, met with OMB urging a delay or elimination of the Rule.  Among other arguments, MARC advised OMB that it was premature for CMS to pursue such a vast rulemaking until the SMART Act was implemented.  In October 2014, CMS withdrew its proposed rule.

MARC’s position is that CMS has no statutory authority to regulate future medicals in liability cases, and that any such effort will negatively impact the ability of litigants to settle cases.  For these reasons, MARC opposes any such regulation, either by rulemaking or as a matter of Agency policy.  MARC does, however urge CMS to take immediate action to recognize settling parties’ fair voluntary allocation of personal injury and other liability action settlement
funds between medical and non-medical losses to provide certainty for beneficiaries as to the amount that must be exhausted before Medicare may resume payment of medical benefits for illness and/or injuries related to the claim.

ISSUE BRIEF:

Future Medicals Issue Brief

REFERENCE DOCUMENTS:

Medicare Secondary Program; Medicare Secondary Payer and “Future Medicals”- Federal Register

Federal Register an Advanced Notice of Proposed Rulemaking (ANPRM) – June 15, 2014

MARC Comment Letter Response to CMS-6047 – ANPRM – Medicare Secondary Program; Medicare Secondary Payer and “Future Medicals”- August 12, 2012

 


[1] Bradley v. Sebelius, 621 F.3d 1330 (11th Cir. 2011), but see U.S. v. Hadden, 661 F.3d 298 (6th Cir. 2012).