Medicare Seeks to Safeguard Its Share of “Future Medicals” from Liability Settlements


The Centers for Medicare & Medicaid Services (“CMS”) has issued an advance notice of proposed rulemaking (“Notice”), soliciting comments on options for how beneficiaries and their attorneys can comply with Medicare Secondary Payer (“MSP”) obligations related to certain liability awards or settlements. Specifically, the Notice addresses the requirement that Medicare remain secondary to liability settlements in regard to medical expenses incurred after the date of settlement (referred to as “future medicals” in the Notice).

By way of background, the MSP rules govern situations in which Medicare is the secondary payer to another party, meaning that the other party has primary responsibility for paying the medical claims of a Medicare beneficiary and that those benefits must be exhausted before Medicare is responsible for paying a claim. For example, a liability payer, such as the insurer of a tortfeasor who causes an injury to a Medicare beneficiary, is generally considered a primary payer under the MSP rules. Under certain conditions, Medicare may make conditional payments if the liability insurer will not pay promptly, but then Medicare has the right to recover when a payment is eventually made by the liability insurer.

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