The Centers for Medicare & Medicaid Services (CMS) has published its long-awaited final rule entitled “Medicare Program: Obtaining Final Medicare Secondary Payer Conditional Payment Amounts via Web Portal.” From the outset of litigation, a plaintiff who is a Medicare beneficiary (or his or her attorney) must report a pending claim to CMS. This allows Medicare to determine the amount of any conditional payments made to or on behalf of the beneficiary related to the claims at issue for which it would be entitled to seek reimbursement. To date, this process has presented certain timing and other logistical challenges. CMS’ publication of this final rule offers involved parties a streamlined mechanism by which they can access Medicare Secondary Payer (MSP) conditional payment amounts, and it also provides a detailed timeline by which certain information must be communicated to CMS.

This final rule stems from the January 10, 2013, enactment of the Medicare IVIG and Strengthening Medicare and Repaying Taxpayers Act of 2012 (the SMART Act), which allows involved parties to learn the final amount owed to Medicare in advance of any settlement, instead of having to wait until after the case is resolved. The SMART Act specifically requires CMS to promulgate a rule establishing a Web portal though which beneficiaries (as well as their attorneys or other representatives, and authorized applicable plans—i.e., the defendants—who have pending liability insurance, no-fault insurance, or workers’ compensation settlements, judgments, awards, or other payments) can access related CMS’ MSP conditional payment amounts and claims detail information.

On September 20, 2013, CMS published an interim final rule with a comment period. The interim final rule did two things: (1) it specified a timeline for developing a multi-factor authentication solution to securely permit authorized users other than the beneficiary to access CMS’ MSP conditional payment amounts and claims detail information via the MSP Web portal; and (2) it required CMS to add additional functionality, such as allowing users to notify CMS that the specified case is approaching settlement; obtain time and date-stamped final conditional payment summary statements and amounts before reaching settlement; and ensure that related disputes and any other discrepancies are addressed within 11 business days of receipt of dispute documentation.

CMS received 21 public comments to the interim final rule. After considering the comments, CMS published the final rule May 17, 2016, which took effect June 16, 2016. CMS finalized the proposed provisions with a few modifications. The key takeaway points and deadlines imposed by the final rule are:

  • A Medicare beneficiary may access his or her MSP conditional payment information via the Web portal, so long as he or she creates an account to access his or her Medicare information through the CMS website, and has notified the proper Medicare contractor of a pending insurance claim, workers’ compensation claim, settlement, judgment, award, or payment.
  • The Medicare beneficiary and authorized applicable plans (as defined in section 1862(b)(8)(F) of the SMART Act, who have pending liability insurance (including self-insurance)); no-fault insurance; or workers’ compensation settlements, judgments, awards, or other payments, may access related CMS MSP conditional payment amounts and claims detail information by registering through the Web portal. For parties other than the beneficiary to access such information, they must demonstrate written proof of representation or consent to release (depending on the nature of the relationship between the beneficiary and the individual or entity requesting the beneficiary’s information). It is important to note, too, that although an insurance carrier has the ability to initiate the conditional payment recovery process, active participation in the process requires authorization by the beneficiary. As a result, new releases must be signed by the beneficiary in order for an insurer to receive information, dispute a conditional payment amount, and/or to participate in any resolution.
  • Up to 120 days before the anticipated date of settlement, judgment, award, or other payment, the beneficiary, or his or her attorney or authorized representative (or applicable plan), may notify CMS – once and only once – via the Web portal, that a settlement, judgment, award, or other payment is expected to occur within 120 days or fewer from the date of notification.
  • From there, the Medicare contractor will compile the claims for which Medicare has paid conditionally related to the pending settlement, judgment, award, or payment, within 65 days or fewer of receiving the initial notice of the pending settlement, judgment, award, or other payment, and posts a recovery case on the Web portal. The Act permits CMS to extend its response time by an additional 30 days if it determines additional time is required to address related claims that Medicare has paid conditionally.
  • Once the recovery case is posted, the beneficiary, or his or her attorney or other authorized representative, can then address any discrepancies by disputing individual conditional payments (but just once, and only once) if he or she believes the conditional payment included is unrelated to the pending insurance, workers’ compensation settlement, judgment, award, or other payment.
  • Any dispute submitted through the Web portal will be resolved within 11 business days of receipt of the dispute and any required supporting documentation.
  • After the resolution of any such disputes, the beneficiary or his or her attorney may download a conditional payment summary statement through the Web portal. If the download is within three days of the settlement, judgment, award, or other payment, that conditional payment summary statement will be Medicare’s final conditional payment amount.
  • If any claim disputes have not been resolved fully, the beneficiary or his or her attorneys may not download a final conditional payment summary statement.
  • After a settlement, judgment, award, or other payment has been secured, the beneficiary – or his or her attorney or other representative – must submit through the Web portal within 30 days or fewer: documentation of the date of the settlement, judgment, award, or other payment, including the total settlement amount, the attorney fee amount or percentage, or additional costs borne by the beneficiary to obtain his/her settlement, judgment, award, or other payment.
  • If this information is not provided within 30 days of securing the settlement, judgment, award, or other payment, the final conditional payment amount obtained through the Web portal is void, and CMS will not be bound.
  • Finally, once the settlement, judgment, award, or other payment information is received, CMS will then apply a pro rata reduction to the final conditional payment amount in accordance with 21 CFR section 411.37, and will issue a final MSP recovery demand letter.

Although the resolution of Medicare claims can still be a drawn-out process, CMS. in publishing the final rule, aimed to streamline the process for all parties involved. The publication of this final rule is a helpful step in allowing parties to understand amounts required to reimburse Medicare, making settlement negotiations more productive and efficient. The regulations outlined above are codified at 21 CFR Part 411.