CMS Published Proposed Rules for Primary Payer Appeal

CMS, Medicare Set-Aside Blog, MSP News on January 7, 2014
Posted by Jennifer Jordan, JD, MSCC

On December 27, 2013, CMS published the proposed rules regarding the right of appeal granted NGHPs in the SMART Act. The proposal essentially extends the existing Medicare appeal process to NGHPs by amending various sections of 42 CFR Part 405 to extend application to the NGHP reporting section of the MSP and define an applicable plan so that it can even be included as a party for an initial determination. Previously Section 405.926(k) expressly stated that determinations under the MSP against primary payers were not initial determinations appealable under this subpart, so obviously that needed to change first. All previous MSP references in this particular section of the CFR applied only to beneficiaries, providers and suppliers, further indicating that since its inception, the MSP never had priority NGHP enforcement attention within CMS. Short of filing a private cause of action or subrogating, CMS could do little other than pursue recoveries and compromise and waive claims under the MSP. While most believe CMS intentionally difficult to work with, they are actually extremely limited in their MSP actions, hence the recent flurry of proposed regulations.

It is most important to note that this appeal has absolutely nothing to do with Medicare set-aside determinations as many continue to believe the SMART Act created. The MSA approval program always has been and continues to be a voluntary unregulated offering of CMS and just as you have no obligation to participate in it, CMS has no obligation to change its opinion once rendered. Unless the proposed regulations for future medicals [see and note marked as “review extended”] mandate an approval by CMS, there is no likely scenario in which CMS opinions will be appealable. CMS has always maintained the position that the time to appeal such an adverse determination would be after a benefit determination was made related to it, at which time the beneficiary would have the right to appeal. Now under the SMART Act, applicable plans would also carry such an appeal right. Unfortunately this does little to alleviate the burden at the time of settlement.

Comments are due to CMS by February 25, 2014. The provision worth a serious look is §405.906(a)(4), which basically establishes that if CMS elects to pursue an applicable plan, that it will be the sole party for recovery. If in fact MSA scenarios play out and end up in post-settlement demands made against primary payers for MSAs that were improperly dissipated, it would be wise that beneficiaries not be unilaterally excluded as a matter of course.

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