CMS Withdraws Proposed Rule Regarding Medicare Set-Asides and Liability Claims

On October 8th, the Centers for Medicare and Medicaid Services (“CMS”) withdrew its Notice of Proposed Rulemaking (NPRM), which proposed regulation of future medicals for settlements in liability claims.

The proposed regulation was intended to provide guidance on how to protect Medicare’s interests in liability situations.  Unlike the recommendations given for a workers’ compensation claim, CMS does not have a recommended policy regarding the provision of future medicals in a liability claim. The NPRM appeared to be CMS’ attempt to establish such guidelines.  The withdrawal of the NPRM has not changed the way we advise with regard to protecting Medicare’s interest from a future medical perspective in liability claims.  Despite the lack of clear guidance on how to provide for future medicals in liability claims, the law still requires that the burden of paying for a claimant’s future medicals not be shifted to Medicare.  Therefore, it is still advisable in certain cases to either designate a portion of the settlement proceeds for future medical expenses, and in large settlements, in order to effectively evaluate the potential cost of future treatment, to consider a Medicare Set-aside.

CMS Updates Section 111 Reporting Guide: Expands definition of "Spouse" to include same-sex marriages

In the updated User Guide released on October 6th, 2014, with regards to Medicare Secondary Payer (“MSP”) policies, CMS redefines "spouse" to include partners in a same-sex marriage. The result of this redefinition is that any legal same-sex marriages entered into in a U.S. jurisdiction that recognizes same-sex marriages, the District of Columbia, or a U.S. territory or a foreign country will be recognized for MSP purposes.  Although the provision will not be effective until January 1, 2015, if an employer, insurer, third party administrator or other plan sponsors so chooses, they may currently use the broader definition of spouse.                                                          
Due to this change, if an individual, based on the Social Security Administration's rules, is entitled to Medicare as a spouse, that individual is a "spouse" for purposes of the MSP Working Aged provisions. Similarly, if a marriage is valid in the jurisdiction in which it was performed as noted above, both parties to the marriage are "spouses" for purposes of the MSP Working Aged provisions. Additionally, if a plan sponsor (employer, insurer, etc.) has a more expansive definition of spouse, it may take over primary payment responsibility for the "spouse". If the "spouse" is reported as such pursuant to Medicare, Medicare, & SCHIP Extension Act of 2007 ("MMSEA") Section 111, Medicare will both pay and pursue recovery accordingly.

For more information please visit the CMS website here.

Save the Date: What You Need to Know to Avoid Problems with Medicare

Join us on 

November 20, 2014

 @ 1:00 PM CST

Staying up-to-date on Medicare Secondary Payer issues can be a real challenge. Join us for this one hour webinar during which attorney Melisa Zwilling, Chair of the Medicare Compliance Group at the law firm of Carr Allison, will discuss recent developments in this area, including some very important court decisions.  In addition, she will discuss how you can save big dollars on both conditional payment claims and MSAs.

  

Register today: https://www4.gotomeeting.com/register/673760199

Attendees will receive one CEU credit for the states of AL, AK, FL, GA, IN, KY, LA, MS, NC, NH, OK, OR, and TX, if needed.

Fifth Circuit District Court Holds Medicare Advantage Plans May Assert Private Cause of Action Against NGHPs

As we previously reported, last year, Humana filed several lawsuits asserting private causes of action and seeking double damages for medical expenses paid by Humana Medicare Advantage Plans that were allegedly payable under the defendants' no-fault and med pay policies.  Humana voluntarily dismissed each of the lawsuits except for the lawsuit in the Western District of Texas.  In that case, the Magistrate Judge previously issued a Report and Recommendation advising the court to dismiss Humana's claims under the Medicare Secondary Payer Act (MSPA) on the basis that the private cause of action under the MSPA is not applicable to Medicare Advantage Plans.

Recently, the court issued an order finding that the Magistrate's Report and Recommendation should be rejected and denying the defendants' motion to dismiss.  The court agreed with the decision of the Third Circuit Court of Appeals in re: Avandia Marketing, Sales Practices, and Products Liability Litigation, 685 F.3d (3rd Cir. 2012), holding that Medicare Advantage plans may assert a private cause of action against a primary plan under the MSPA.

We will continue to follow this case and will keep you informed on any developments, as this case will likely be appealed to the Fifth Circuit Court of Appeals.  As we discussed last year, Humana is seeking broad restitution for medical expenses paid for any Humana plan enrollee when the defendants were the primary payer and had no-fault or med pay coverage, in addition to double damages.  If Humana prevails on its claims, the amount of damages awarded could be staggering.

Please let us know if you have any questions or concerns about resolving Medicare Advantage and Part D Prescription Drug Plan liens.  If you are uncertain whether a claimant is enrolled in a Medicare Advantage or Part D Prescription Drug Plan, we can help confirm that information.  We are currently assisting a number of clients with resolving Medicare Advantage and Part D Prescription Drug Plan liens, and we will be glad to help ensure that you are protected.

Changes in TPOC Reporting Thresholds

On October 1, 2014, the mandatory TPOC reporting thresholds changed for workers' compensation and liability claims. For workers' compensation claims with TPOC dates on or after October 1, 2014, the mandatory cumulative TPOC reporting threshold is $300.00.  For liability claims with TPOC dates on or after October 1, 2014, the mandatory cumulative TPOC reporting threshold is $1,000.00.  For no-fault claims, all TPOCs must still be reported since there is no de minimis TPOC reporting threshold.