Medicare Advantage Conditional Payment Recoveries Poised to Become an Even Bigger Headache for Claims Payers

A recent study found that the COVID-19 pandemic is leading Medicare Advantage enrollment to grow more quickly than previously anticipated. Of those Medicare beneficiaries who decided on a Medicare Advantage plan because of supplemental benefits, 35% cited COVID-19 supplemental benefits specifically as the reasoning for choice, while 27% cited telehealth benefits as the reason for their selection for a Medicare Advantage plan.

Despite PAID Act being enacted, which will provide transparency for primary claims payers into Medicare advantage and part D enrollment information, Medicare Advantage and Part D enrollment information is not currently readily available to primary claims payers. The Centers for Medicare & Medicaid Services (CMS) currently provides traditional Medicare Part A and B enrollment information in the Section 111 query process but does not provide Part C/Medicare Advantage or Medicare Part D/prescription drug plan enrollment information to workers’ compensation, general liability, and no-fault primary claims payers. Pursuant to the PAID Act, CMS has one (1) year to implement PAID with a target go-live date of December 11, 2021.

Thus, in the interim, parties may be unaware of a Medicare advantage plans potential recovery unless the beneficiary accurately reveals all Medicare plans enrolled in during the life of the claim. As the Medicare Advantage segment of the Medicare population grows, nonetheless the push for Medicare Advantage Plans to recover conditional payments will likely continue to grow. Firms such as MSP Recovery LLC have made a business out of the double damages MSP private cause of action. It is important to set up best practices for Medicare advantage and Part D conditional payments now, particularly until PAID Act is enacted. Additionally, settlement language should be looked at how the parties will address conditional payments, other MSP concerns, and how any additional conditional payments that may arise post settlement will be handled to keep the settlement tight.

As noted in our prior blog on Humana filing suit in a U.S. District Court against an insurer for its alleged failure to reimburse Humana Medicare Advantage, these plans are seeking recovery for unreimbursed conditional payments, and many times, the conditional payment letter/demand may arrive post-settlement. Without a doubt, conditional payment correspondence received from a Medicare Advantage or Part D plan should be addressed timely. In case there is any confusion, you will know a Medicare Advantage or Part D conditional payment letter/demand as it will be addressed on the plan’s letterhead and not coming from the BCRC/CRC. For example, the conditional payment letter may come from Humana, United Healthcare, Aetna, etc. directly.

How the various Medicare Advantage and Part D plans will handle conditional payment appeals by primary plans will be something to keep an eye on after PAID Act is enacted. Currently, there is no finite or delineated appeals process for primary plans that wish to dispute/appeal conditional payments coming from a Medicare Advantage or Part D plan.

Recall that the Strengthening Medicare and Repaying Taxpayers Act (SMART) Act (2013) required CMS to provide primary plans with a conditional payment appeals process. This process exists today but the Medicare Advantage and Part D plans have not been specifically directed to set forth the same appeal process. However, it can easily be assumed that such an appeals process should logically apply to Medicare Advantage and Part D plans as well. If these plans desire the same rights of recovery as traditional Medicare (a right to an action for double damages for unreimbursed conditional payments), the plans should provide the same appeal rights to primary plans to ensure they are only reimbursing for injury-related conditional payments.

One can wonder that once PAID Act is enacted, and primary plans have tangible evidence that the injured party’s medical treatment has been paid by a Medicare Advantage plan, how that process will go. It is logical that a large Medicare Advantage insurer such as Humana or United Healthcare may be prepared for the onslaught of additional calls and appeals to their subrogation departments, but will smaller Medicare Advantage plans such as a Kaiser or Cigna be ready to address the additional volume? Will primary claims payers be able to obtain finality in Medicare Advantage and Part D conditional payment resolution even once PAID is passed? Stay tuned.

Medicare Advantage and Part D conditional payments do not have to be a headache. You can contact me at heather@sandersoncomp.com.