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AAJ Reinforces Our Message Regarding Medicare Set Asides

After announcing the withdrawal of the proposed rulemaking for Medicare Set Asides and proclaiming victory, AAJ has clarified the impact the withdrawal has on establishing set asides. According to the message sent out last Friday, the withdrawal has no impact on the statutory text of the Medicare Secondary Payer Act. Admittedly, the Medicare Secondary Payer Act is complex. Medicare’s interpretation of the MSP is that when settling a claim involving a Medicare beneficiary, that one must take into account Medicare’s future interest. That doesn’t necessarily mean creating a set aside; it means you should consult with competent experts on the subject and educate the client on the risks of not setting aside. Then properly document the selected course of action. Synergy can help with these complicated issues.

The full text of the message that the AAJ sent to its membership is found below:

Dear Members,

Congress is out on recess until after Election Day. Please remember to vote, and if able, sign up for our Voter Protection Action Committee to volunteer on Election Day. Rest assured, we will send you a post-election update!

In the meantime, we have excellent news to share with you in our Legislative & Regulatory Update, which focuses this month on our regulatory lobbying progress.

Also, I would like to address further the decision by the Centers for Medicare & Medicaid Services (CMS) to withdraw its proposed rule on future medicals. Earlier this week, I sent you information about a victory involving our regulatory advocacy on the topic of future medicals. I have received a number of follow-up questions from members about what the withdrawal of CMS’s proposed rule on future medicals means.

Many of you have asked questions regarding what impact, if any, the withdrawal of the rule has on the necessity of creating a Medicare set-aside for your clients. AAJ cannot provide specific legal advice; however we can supplement the information we provided you earlier this week.

CMS withdrawing the proposed rule called “Medicare Secondary Payer and Future Medicals” has absolutely no impact on the underlying statutory text—the Medicare Secondary Payer Act; 42 U.S.C § 1395y(b)—that provides the parameters for reimbursing Medicare in Medicare Secondary Payer (MSP) situations. To the extent reimbursement was required before the rule was withdrawn, reimbursement is still required. The rule being withdrawn has not altered any obligations in the statute.

Despite this, the withdrawal of the rule is hugely important. As you may know, the rule that Medicare was in the process of promulgating and which was poised to become the law of the land would have required that EVERYONE, both Medicare beneficiaries and non-beneficiaries alike, pay in full for all medical care that might be billed to Medicare in the future without taking into consideration whether or not the individual made a full recovery. More specifically, the rule as drafted by CMS stated:

“If an individual or Medicare beneficiary obtains a ‘settlement’ and has received, reasonably anticipates receiving, or should have reasonably anticipated receiving Medicare covered and otherwise reimbursable items and services after the date of “settlement,” he or she is required to satisfy Medicare’s interest with respect to “future medicals” related to his or her ‘settlement’ using any one of the following options outlined later in this [proposed rule].”

If this rule were implemented, it would have been catastrophic for the vast majority of your clients. It would have significantly reduced their recoveries and made it impossible for many of them to bring claims at all, because there would have been no recovery after Medicare was paid. Eliminating this hugely unfair rule is highly beneficial to you and your clients.

Thank you for being a member of AAJ and for your continued support of our legislative and regulatory advocacy for you and your clients.

Best Regards,

Linda Lipsen


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