• Proposed Rule Grants Applicable Plans Access to Current Appeal Process
  • January 14, 2014
  • Law Firm: Fineman Krekstein Harris P.C. - Philadelphia Office
  • The Centers for Medicare and Medicaid Services (CMS) released a proposed rule on December 27, 2013, intended to implement provisions of the Strengthening Medicare and Repaying Taxpayers Act of 2012 (SMART Act). The proposed rule, if adopted, would give effect to a provision of the SMART Act requiring a right of appeal and an appeal process for liability insurance, no-fault insurance, and workers’ compensation plans when Medicare pursues a Medicare Secondary Payer (MSP) recovery claim directly from the insurance or workers’ compensation plan. Comments on the proposed rule must be submitted by 5 p.m. on February 25, 2014.

    The proposed rule is the result of section 201 of the SMART Act, which requires Medicare to promulgate regulations establishing such a right of appeal and an appeal process with respect to any determination for which the Secretary is seeking reimbursement from an applicable plan. The appeal process must be available to the applicable plan, or an attorney, agent, or third-party administrator on behalf of the applicable plan.

    Currently, if an MSP recovery demand is issued to the beneficiary as the identified debtor, the beneficiary has formal administrative appeal rights and the final determination by Medicare can be judicially reviewed. If, however, the recovery demand is issued to the applicable plan as the identified debtor, the applicable plan has no formal administrative appeal rights or judicial review available. The proposed rule seeks to change this by amending the definition of “initial determination,” granting applicable plans access to the multi-level appeal process that is currently available to beneficiaries and providers.

    The proposed rule would amend the definition of initial determination to include a determination by Medicare that it has a direct right of recovery against an applicable plan. It would also consider the applicable plan a party to the initial determination and, therefore, privy to the appeal process whenever Medicare seeks recovery directly from the applicable plan. Medicare seeks recovery directly from the plan only where a recovery demand letter is issued to the plan and lists the plan as the identified debtor. The plan would then have access to the current appeal process, including a redetermination by the contractor issuing the recovery demand, reconsideration by a Qualified Independent Contractor, an Administrative Law Judge hearing, and a review by the Departmental Appeals Board’s Medicare Appeals Council.

    Furthermore, where the applicable plan is considered a party to the initial determination, it will be the sole party to the initial determination. Under the current system, the beneficiary and medical service provider could also be considered parties to the initial determination. The proposed rule also includes notice requirements that parallel those of the beneficiary.

    Although there has been interest in the field in creating an appeal process for workers’ compensation Medicare set-aside arrangement amounts, the proposed rule will not apply to such determinations.

    The proposed rule is available at: https://www.federalregister.gov/articles/2013/12/27/2013-30661/medicare-program-right-of-appeal-for-medicare-secondary-payer-determination-relating-to-liability