Top 3 Medicare Secondary Payer Predictions for 2021
2020 was an unusually active year in Medicare Secondary Payer (MSP) updates and changes, particularly on the regulatory front. Before predicting what is likely to come in 2021, let’s look at some of the major MSP updates that occurred in 2020 as an indicator of what may come in 2021.
In 2020, two (2) intents of Notice of Proposed Rulemakings (NPRMs) were posted on OIRA. One of those NPRMs were issued for public comment and a reform to the MSP was enacted into law:
Section 111 Reporting Rulemaking Issued: In February, the Centers for Medicare & Medicaid Services (CMS) issued an NPRM regarding scenarios in which Civil Monetary Penalties (CMPs) for noncompliance with MMSEA Section 111 reporting could be issued against Non-Group Health Plans (NGHPs) (workers’ compensation, general liability, and no-fault plans/carriers). The comment period closed in April, and CMS is now analyzing those comments prior to issuing a Final Rule. The text of the NPRM can be found here. The CMS fact sheet on the NPRM can be found here.
CMS flirts with issuing a Rulemaking around future medical obligations: Around summertime, CMS also posted on the OIRA website its intent to issue an NPRM on “Medicare Secondary Payer Clarifications and Updates.” Essentially, the NPRM seeks to clarify obligations regarding protecting Medicare’s interests for future medical treatment that may be needed in the future post-settlement as it relates to the underlying injury. Initially, the industry looked at the NPRM as pertaining to Liability Medicare Set-Asides (LMSAs) only. However, the description of the latest proposed rule clearly indicates that the NPRM will provide guidance around future medical obligations not just around general liability claims, settlements, judgments/awards, but also in workers’ compensation and no-fault scenarios. As such, not realized by the industry is that the NPRM may potentially impact existing Workers’ Compensation Medicare Set-Aside (WCMSA) review processes that have been in place since 2001. At the end of 2020, CMS adjusted its intended release date of the NPRM to March of 2021 so this is something to continue to be watched. The notice on the OIRA site can be found here.
PAID Act is signed into law: In December, the Provide Accurate Information Directly (PAID) Act was passed which will require CMS to provide MAO and Medicare Part D enrollment information to NGHPs through the Section 111 query process. PAID was scored as a $30 million saver to the Federal government by the Congressional Budget Office (CBO).
In 2021, the following is predicted:
The Section 111 rulemaking will become a Final Rule, and CMS may begin issuing CMPs of up to $1000 per day/per claim against non-compliant workers’ compensation, no-fault and general liability plans. The most egregious offenders will be targeted at the outset, which are those entities that have failed to register as a Responsible Reporting Entity (RRE) and those RREs that have failed to correct errors when attempting to submit a Section 111 report.
Recommendation: 2021 is the year to ensure that reporting programs are cleaned up. A late report is better than no report. Document those efforts to obtain an individual’s SSN. Register as an RRE and report if you have not yet. Unsure if you qualify as an RRE? Look to an MSP expert for guidance, as ignorance of the law will not be a defense against costly CMPs of up to $1000 per day/per claim. Lastly, ensure that defenses asserted in the conditional payment dispute process align with your Section 111 reporting. This is one of the areas specifically mentioned as a sanctionable activity under the NPRM and is something that unfortunately occurs frequently. An adjuster may fail to properly terminate Ongoing Responsibility for Medical (ORM) in the Section 111 report timely, and then attempt to dispute charges where in fact the RRE did not have ORM. Such a common mistake can be incredibly costly, as worded under the current proposed NPRM.
Private cause of action MSP double damages litigation will continue to ensue across the country. Medicare Advantage Organizations (MAOs) as well as other private entities taking legal assignments for claims such as MSP Recovery LLC will likely continue to file litigation nationwide against carriers and self-insured entities for alleged failure to reimburse the MAO its conditional payments. In September of 2020, the 11th Circuit ruled in favor of MSP Recovery allowing the use of the private cause of action by downstream entities as plaintiffs. MSP Recovery and MAOs will continue to attempt to expand its ability to use the MSP private cause of action on behalf of and against more entities. There is speculation on the street that Group Health Plans (employer sponsored plans) are the next target of MSP Recovery for these double damages’ lawsuits. NGHPs are hence just the tip of the iceberg as Defendant targets by entities such as MSP Recovery.
Recommendation: If you have received a conditional payment letter or notice from either an MAO, Part D plan, or an entity like MSP Recovery address it timely to avoid a double damages lawsuit. Engage with an MSP expert to determine whether the correspondence requires a response and to determine what defenses may be available to the asserted recovery. Further, while there is no formal appeals process for MAO and Part D conditional payments, primary payers can still do so.
PAID Act will not be implemented in 2021. While CMS has 1 year to implement PAID Act and RREs should be able to receive MAO and Part D enrollment information by December 11, 2021, the more likely scenario is that implementation by CMS will occur in 2022 due to COVID and other more pressing CMS healthcare initiatives.
Recommendation: Prior to settling a claim with a Medicare beneficiary, verify all Medicare plans that the claimant has been enrolled in during the life of the claim so that any conditional payments can be resolved. While this is not the most reliable source of this information as the Medicare beneficiary may not be able to recollect accurately all Medicare plans that he/she has been enrolled in during the life of a claim, it is one method to get in front of MAO and Part D conditional payment liabilities. Use protective settlement language which addresses all conditional payment obligations, whether it be traditional Medicare, Medicare Part C (MAO plans), and Medicare Part D.
2021 will be full of many interesting challenges if 2020 is any indication of what is to come. Sanderson Firm PLLC can assist with navigating the MSP’s unique legal challenges and providing experienced expertise when you need it most.
