Medicare Secondary Payer Regulatory Update

March 4, 2022

Things are heating up on the Medicare Secondary Payer regulatory front. With the calendar turning to March, the White House’s Office of Information and Regulatory Affairs (OIRA) posted updated timelines for future medical and civil money penalty regulations. ECS has covered these regulatory notices for a number of years now, but these notices are the clearest sign yet that Medicare intends to regulate the behavior of Medicare beneficiaries settling any type of bodily injury claim. Here’s a look at each notice.

Medicare Secondary Payer and Future Medicals

On March 1st the OIRA website was updated to indicate that a “Proposed Rule” involving Medicare Secondary Payer and Future Medicals was now under regulatory review by the White House’s Office of Management and Budget.  While we have no specifics about the content of the proposed rule, the most recent summary on the OIRA web site indicated:

“This proposed rule would clarify existing Medicare Secondary Payer (MSP) obligations associated with future medical items services related to liability insurance (including self-insurance), no fault insurance, and worker’s compensation settlements, judgments, awards, or other payments. This proposed rule would also remove obsolete regulations.”

Just a few months ago, we outlined the long game of kick-the-can that CMS had played with this proposed rule, which actually dates all the way back to the Advanced Notice of Proposed Rulemaking (ANPRM), which was issued nearly ten years ago only to be withdrawn in 2014.  Historically, Medicare regulated the behavior of beneficiaries settling a workers’ compensation claim (specifically at 42 CFR 411.46).  Those regulations obviously impact the post-settlement behavior of parties, and a Medicare Set-Aside (MSA) ensures compliance with the Medicare Secondary Payer statute and regulations extends to the full life expectancy of the claimant.

In terms of a timeline, this can still go in many directions.  Assuming that there are no hiccups in the process, we would anticipate that the Proposed Rule will be released at some point in the next few months.  From there, the regulated community of insurers, employers, TPAs, attorneys, service providers, and beneficiaries will have the opportunity to review the proposal and provide written comments (usually about two months after the Proposed Rule is published).  For an economically significant proposal with a multitude of impacted organizations, interest groups, and individuals, we would expect a lot of comments that the agency will then have to sort through before any proposal becomes a Final Rule.

Medicare Secondary Payer and Civil Money Penalties

The other important item to watch is the Final Rule on Medicare Secondary Payer and Civil Money Penalties.  An OIRA notice has been updated to show that the Final Rule on Section 111 reporting penalties is now under regulatory review. 

These proposed rules were first released in February 2020.  In its proposed rule, CMS proposed a framework whereby responsible reporting entities (RREs) could be penalized for failure to report, reporting information that is later contradicted during the recovery process, and poor quality reporting. In our written comment, we criticized a number of aspects of the proposal – most notably the concept of Medicare’s conditional payment contractors triggering penalties by uncovering “contradictory information” during the recovery process. Many other commenters shared this concern. We are hopeful that the Final Rule will drop the concept of “contradictory information,” or at a minimum, narrowly tailor these penalties to very specific circumstances.  It is anticipated that the Final Rule will be released shortly, so companies should once again assess their readiness for these penalties. 

What’s Next?

ECS will continue to monitor the Proposed Rule on Medicare Secondary Payer and Future Medicals and the Final Rule on Medicare Secondary Payer and Future Medicals. As soon as the source documents are posted, ECS will provide our written analysis and – in the days to come – our formal written comments for CMS.

ECS had already planned our March national webinar around these regulations (no, we didn’t have advance notice, but yes we did play the Lottery today).  To register for the webinar, if you haven’t already, please go here:  MSP and Future Medicals: Regs, LMSAs, What’s Up?  The webinar will be held on Thursday, March 17th at 2 p.m. ET.

Should you have any questions about either of these regulatory actions, our future medical and Section 111 reporting services, or our webinar series, please contact your local or national account manager or Marty Cassavoy at martin.cassavoy@examworkscompliance.com or 781-517-8085.

Marty Cassavoy

Marty Cassavoy is the Vice President of MSP Compliance at ExamWorks Compliance Solutions. Marty and his team develop solutions to challenges in all areas of Medicare Secondary Payer compliance and across all insurance types. An attorney licensed to practice law in Massachusetts, Marty works out of ExamWorks’ Woburn, Massachusetts office and can be reached at 781-517-8085 or martin.cassavoy@ExamWorksCompliance.com

Marty Cassavoy

Marty Cassavoy

Marty Cassavoy is the Vice President of MSP Compliance at ExamWorks Compliance Solutions. Marty and his team develop solutions to challenges in all areas of Medicare Secondary Payer compliance and across all insurance types. An attorney licensed to practice law in Massachusetts, Marty works out of ExamWorks’ Woburn, Massachusetts office and can be reached at 781-517-8085 or martin.cassavoy@ExamWorksCompliance.com