• The Centers for Medicare & Medicaid Services (CMS) Withdraws Proposed Rule Regarding Future Medicals in Tort Actions
  • December 19, 2014 | Author: Corey J. Adamson
  • Law Firm: Thomas, Thomas & Hafer LLP - Harrisburg Office
  • The Centers for Medicare & Medicaid Services (CMS) has withdrawn the Notice of Proposed Rulemaking submitted in August 2013 to the Office of Management and Budget, addressing future medical costs in third party liability claims. While CMS has published rules for addressing future medical costs in workers’ compensation matters, there are no such rules with regard to third party tort claims. The proposed rule was to address how Medicare’s interest should be protected under the Medicare Secondary Payer Act (Act), in third party liability cases where future medical care is claimed or effectively released in a settlement, judgment, or award.

    The withdrawal of this proposed rule has been proclaimed by plaintiffs’ bar to render dead the requirement of a Medicare Set-Aside in third party liability cases. However, the Act, prohibits Medicare from paying for treatment when there is a “primary payer.” This Act specifically names liability coverage as a “primary payer,” meaning that settling parties need to repay Medicare for any conditional payments that have been made for past treatment, as well as protect Medicare’s future interest by not “shifting” the cost of future injury-related treatment to Medicare.

    Despite the lack of a future medicals published rule, it remains a plaintiff’s responsibility under the Act to protect Medicare’s future interests if future medicals are being settled or effectively released. Failing to do so may result in Medicare’s refusal to make payments for future treatment related to the injuries involved in the third party claim, up to the full amount of the gross settlement. In addition, the withdrawal of the proposed rule does not change the obligations of all parties to protect, address, and otherwise satisfy Medicare liens for treatment, and CMS can seek recovery from any entity involved in a third party claim if its conditional payments have not been repaid.