CMS Moves Toward Establishing “Future Medicals” Medicare Secondary Payer Rule
Roy Franco
May 7, 2012

Regulations are enforceable laws authorized by major legislation enacted by Congress.  The process of creating and enacting regulations is generally referred to as the “rulemaking” process.  After Congress passes legislation, the appropriate regulatory agency then creates regulations necessary to implement the law.  Under the Administrative Procedures Act (APA) agencies must publish all proposed new regulations in the Federal Register at least 30 days before they take effect.  During this period, interested parties may comment, offer amendments, or object to the regulation.

The Centers for Medicare & Medicaid Services (CMS) recently submitted a proposed rule on “Future Medicals”  to be reviewed by the Office of Management & Budget.  Under President Clinton’s Executive Order #12866 this is the first step in the rulemaking process.    The proposed rule (RIN: 0938-AR43)  is located here, but is not available for public review as of the publication of this blog.  Consequently, the exact nature of this rule is unknown, but a reasonable conclusion is that it deals with the issue of “Future Medicals” and liability claims.

If accepted by the Office of Management & Budget, CMS publishes it in the Federal Register and the proposed rule enters the public comment period.  At that point, the public will finally be able to comment on the rule, however, depending on whether the  Medicare Secondary Payer Act is interpreted to require public hearings, it could become a regulation within 30 days.  Based on past regulations to the Act, it is unlikely public hearings will occur.

If the outcome is not desirable there is an additional opportunity to have the regulation reviewed under the Congressional Review Act .  This law allows Congress up to 60 in-session days to review and possibly reject new federal regulations issued by the regulatory agencies.  CMS will have to submit this new rule to the leaders of both the House and Senate.  The Government Accounting Office (GAO) will also have to provide to the committees of jurisdiction a detailed report on each new major rule.  Thereafter, it will be up to the Courts to determine if the Regulation is appropriate.

A rule involving “Future Medicals” for liability claims will be a major shift in how liability claims are processed.  Insurance carriers (including those that self insure) have very few tools to require Medicare’s interest be protected and State Courts are not necessarily in sync with the application of the Medicare Secondary Payer Act.  We suspect a great deal of public comment will be offered, and it would probably be best for all involved to start considering their responses.  It appears CMS is very serious about this issue and we need to respond in a manner that is more than criticism but offers real solutions.  Shifting responsibility to Medicare to pay for treatment after a significant settlement is not fair; nonetheless, it is equally unfair to force a Future Medicals fund to pay for all care that does not take into account claim issues, such as comparative negligence, coverage and/or insurance limits.

We intend to be intimately involved in the comment period, and we encourage your group to communicate with us as soon as the comment period is announced.

Keep an eye on this one.