CMS may begin requiring people to enter into agreements to pay for future medical care resulting from chronic illness, chronic injuries or traumas for which they have received a cash settlement from an insurance company or a lawsuit. CMS is seeking comments on ways beneficiaries, and individuals who are not yet beneficiaries, can satisfy future payments for care that Medicare would normally have to sue to reclaim.
In many instances, Medicare will make payment for care and then go back and recoup that amount if it can be determined that another insurance policy or money awarded in a court settlement should have paid for those expenses. These are known as conditional payments and Medicare has a right to sue and recover from the settlement any amount conditionally paid. The idea with this proposal is to have the proceeds for those settlements pay not only for the care that Medicare conditionally paid for originally, but also cover the cost of ongoing care resulting from the incident in the future. Seven different methods of paying for future care are being considered by Medicare
Private pay. The first option is one in which the beneficiary or a future beneficiary would pay for future medical care out of the proceeds of the settlement directly. Medicare would make no payment in this case for care resulting from the chronic illness or trauma for which another party is responsible for paying. Medicare would not require a review or approval of documentation under this option, but may request documentation at any time to verify payments have been made for the medical care.
Set-aside agreement. Another option would allow beneficiaries and to establish a proposed Medicare set-aside arrangement. This option would allow an agreement to be made with Medicare outlining when payments would be made to Medicare for care received after the date of settlement with the other insurer. Medicare has recently received a large number of requests for this option which currently is only available to individuals who are receiving a settlement for a workers’ compensation claim. Medicare envisions a process similar to the workers’ compensation claim for the other types of settlements.
Up-front payment. Beneficiaries could also make a one-time up-front payment. Under this option the beneficiary would have to provide Medicare with an estimate of all future payments for care and make one payment from the settlement amount for that future care. It would be the responsibility of the beneficiary to make the estimate and seek approval from CMS.
Use of existing recovery options. The final option under consideration would be to allow the beneficiary to participate in one of three recovery options: (1) a fixed payment option in which, if the beneficiary receives a settlement of $5,000 or less, the beneficiary may pay 25 percent of the settlement amount as full settlement for Medicare’s claim for recovery of conditional payments; (2) a self-calculated payment option for settlements of $25,000 or less in which the beneficiary would calculate, and Medicare would approve, the expected payment for future medical care; and (3) an option under which the Medicare would not seek any repayment for claims of less than $300.
Waiver of future claims. Medicare is proposing that it would not pursue payment for future medical care if the settlement amount is below an as yet undetermined amount and all the following are met: (1) the accident, illness or incident occurred one year of more before the settlement date, (2) the underlying claim did not involve a chronic condition, (3) the beneficiary will not be receiving additional settlements as a result of the incident, and (4) there is no corresponding or no-fault insurance claim. If the individual is not a beneficiary on the date of the settlement, Medicare will not pursue payment for future medical care if the beneficiary does not expect to become a beneficiary within 30 months of the date of settlement and all the other conditions above are met.
Compromise or waiver of recover. If the beneficiary obtained either a compromise or waiver of recovery, Medicare would have the discretion to not pursue recovery of payments for future medical costs related to the incident for which there was a settlement. If the beneficiary obtains additional amounts from other settlements resulting from the same incident, Medicare would review the conditional payments it made and adjust its claim for past and future medical care.
Proof of care completion. One last option would be to have beneficiaries obtain a date of care completion attestation from his or her physician when care as a result of the incident is complete. Under this option, Medicare would only collect from the date of the incident to the date the attestation was completed by the physician. Beneficiaries could also seek to enter in a waiver with Medicare under which Medicare would not seek to recover any additional money for future care as a result of the incident.
Comments on these proposals are being accepted by CMS until August 14, 2012.