The PAID Act Became Effective One (1) Year Ago: Sanderson Firm Observations & Experiences
It is hard to believe that it has already been two (2) years since Congress passed the Provide Accurate Information Directly (PAID) Act and 1 year since the PAID Act became effective on December 11, 2021.
As our readers may recall, the PAID Act requires the Centers for Medicare & Medicaid Services (CMS) to provide Non-Group Health Plan (NGHP) (workers’ compensation, general liability, and no-fault payers/plans) Responsible Reporting Entities (RREs) with Medicare Advantage Plan (Part C) and Medicare Prescription Drug Plan (Part D) enrollment information as part of the Section 111 query response file. The PAID Act requires CMS to provide Part C & Part D plan enrollment information for the previous three (3) years, including up to 12 plans/instances.
The legislative intent behind the PAID Act was simple and clear: enable NGHP RREs to more easily obtain the Part C & D enrollment information of their injured parties; unfortunately, since the PAID Act went live, there has seemingly not been much additional communication regarding usage of the Part C & D enrollment data post-PAID Act implementation.
This lack of communication we believe is in large part due to messaging during the implementation of the PAID Act. CMS made it very clear that its responsibility was to provide Part C & Part D information only and that no part of the PAID Act established any requirements on how RREs should utilize this information. When asked if RREs are supposed to “chase the Part C & D plans down to see if they have a conditional payment lien,” CMS was clear that no part of the PAID Act required that. Because the PAID Act is silent on any obligation to reach out to the Part C & D plans, RREs and claims administrators now have the difficult task of determining best practices surrounding handling of this newly provided Medicare Advantage & Part D enrollment information.
On July 20, 2022, Sanderson Firm hosted a webinar featuring Brian Bargender, a representative of one of the largest Medicare Advantage Organizations (MAOs), which contained key information and takeaways for RREs and stakeholders to consider as they refine their programs regarding Medicare Advantage and Part D conditional payment resolution. The recording to the Webinar can be found here.
Sanderson Firm Observations/Experience over the Past Year
1. While CMS is providing Part C & D information in query response files, the challenge of how to process this information by many claims organizations still exists. The challenge lies therein from a best practice standpoint- Should RREs reach out to the Part C & D plans and verify if they have a conditional payment lien? Another challenge lies with claims systems that may not have been upgraded to share the Part C & D enrollment information with RREs in their claim files.
2. The question of how often to “re-query” Medicare beneficiaries for potential Part C/Part D enrollment remains an ongoing conversation. Because Medicare beneficiaries can change Medicare plans at least annually, old query results may be outdated, and a fresh query may need to be run.
3. While plan name, address and phone number information are provided in the Section 111 query response file, there is still large disconnect in determining who handles subrogation efforts for each organization. Some handle this process directly and some use third party subrogation contractors.
4. Medicare Advantage Plans are most certainly experiencing a large uptick in conditional payment requests due to The PAID Act and turnaround times responding to conditional payment inquiries are increasing.
5. Correspondence from many/most Medicare Advantage Organizations (MAOs) or their subrogation contractors now contain citations to their recovery rights as outlined by the Medicare Secondar Payer (MSP) Act. Additionally, case law around the country continues to develop finding that MAOs have the same rights to double damages against an RRE that fails to reimburse the MAO conditional payments.
6. While already acknowledged by CMS data, Part C enrollment is at an all-time high and will continue to grow. More than 50% of Medicare beneficiaries are enrolled in a Part C plan and this number is growing. While having the past 3 years of enrollment data is a huge help, it does not cover all the plans that one beneficiary may have had during the pendency of their claim.
Sanderson Firm Commentary
While CMS remained steadfast in their communication that they were providing information only, we know based on many court decisions over the last 10 years that Medicare Advantage Organizations (MAOs) have effectively “won” their seat at the MSP Recovery table. See In re Avandia Mktg., Sales Pracs. & Prod. Liab. Litig., 685 F.3d 353 (3d Cir. 2012); Humana Med. Plan, Inc. v. W. Heritage Ins. Co., 832 F.3d 1229 (11th Cir. 2016); Aetna Life Ins. Co. v. Big Y, 2022 U.S. App. LEXIS 29797 (2nd Cir. 2022); MSP Recovery Claims, Series LLC v. Nationwide Mut. Ins. Co., LEXIS 55717 (S.D. Ohio Mar. 28, 2022). The involvement of MAO’s in conditional payment obligations is not new, but we most certainly can expect this to grow exponentially over the next few years.
Sanderson Firm continues to recommend a proactive approach to managing Medicare Advantage/Part D conditional payment exposure. However, we understand that a customized approach may be needed for each organization. Our team is available any time to discuss the needs of your organization and discuss strategies for a comprehensive conditional payment program that includes MAP/Part D resolution.
Our firm offers comprehensive services and guidance for processing PAID Act data, best practice creation, and organization/claims team training. Additionally, our team is comprised of professionals with numerous years of experience researching and resolving Medicare Advantage Plan and Part D conditional payments.
To learn more about any of our services or specifically Medicare Advantage/Part D services, please contact us.
