At the recent NAMSAP Educational Conference in Baltimore, during a breakout panel discussion on “Leveraging Settlement with Medicare Set-Asides in Mediation”, a rather strident concern was raised with respect to the reasonable scope of terms in a settlement release irrespective of the type of primary plan covering the loss. Specifically, attendees questioned whether Medicare eligible individuals could or to what extent may release their claim or claims in the future to these public health and welfare insurance benefits while negotiating compromise settlement provisions under liability, no-fault or workers compensation plan.
The presumptive purpose of such Release language insofar as Medicare Secondary Payer compliance is to minimize exposure on all the interested parties from subsequent repayment claims by the federal government and specifically exclude from Medicare coverage definitive future expenses reasonably expected to be incurred by the beneficiary.
The experiences shared by attendees included examples of very broad proposed Release terms where Medicare beneficiaries waive all such benefits regardless of the items, services or drugs covered under Parts A, B and D; a proposed prohibition whether or not payment can reasonably be expected to be made under the primary plan; as well as more narrowly tailored provisions limited to body parts and billing codes claimed related in the underlying case. The discussion necessarily touched on a variety of considerations including the parties’ capacity to enter into contracts, the binding nature of private agreements containing clear, unambiguous writing to support a meeting of the minds, judicial promotion of settlements versus trials, and public policy concerns on enforceability and administration.
There are means other than a well-drafted Release to serve these dual MSP purposes such as a Medicare Set-Aside designed to ensure that payment of benefits shall be consistent with federal law and that no payments may be made under Medicare for certain expenses. CMS further offers supporting WCMSA Expenditure Annual Attestation Forms and recently announced webinars highlighting efforts to enhance WCMSA attestations. Medicare-Set-Aside-Arrangements – What’s New. CMS’ proposed rule is still pending which is expected to provide beneficiaries with guidance to satisfy their MSP obligations under 42 U.S.C. §1395y(b) regarding future medical care expenses under automobile and liability insurance (including self-insurance), no fault insurance, and workers’ compensation settlements, judgments, awards or payments.
In addition, parties resolving claims with Medicare beneficiaries may be wise not to overlook another option. Federal law preserves “Basic Freedom of Choice” by any Medicare entitled individual to enter into a private contact with a physician or practitioner to provide for items or services otherwise covered subject to certain requirements described in Section 1802(b)(see also 42 U.S.C. §1395a(b)). Such a private contract is expressly listed among the numerous exclusions from Medicare coverage where no payment may be made for any expenses incurred. 42 U.S.C. §1395y(a)(19). Similar to a well-drafted Release, the private contract is required among other things to clearly indicate to the Medicare beneficiary that by signing s/he agrees not to submit a claim (or to request that the physician or practitioner submit a claim) for such items or services even if such items or services are otherwise covered.
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