The Two-Year Anniversary of the PAID Act Part 1 of 2: Observations in 2023

Written by: Kayla Pigeon, Esq., Recovery Department Director, Sanderson Firm PLLC

It has now been three (3) years since Congress passed the Provide Accurate Information Directly (PAID) Act and two (2) years since the PAID Act became effective on December 11, 2021.

This blog is part one of a two-part series. In part one, we will discuss our observations and experiences in 2023 utilizing the PAID Act data. Part two of this blog series will discuss the emerging issues we expect to encounter in 2024.

As a brief reminder, the PAID Act requires the Centers for Medicare & Medicaid Services (CMS) to provide Medicare Advantage Plan (Part C) and Medicare Prescription Drug Plan (Part D) enrollment information as part of the Section 111 query response file to Non-Group Health Plan (NGHP) Responsible Reporting Entities (RREs). NGHPs are workers’ compensation, general liability, and no-fault plans/payers. The enrollment data required to be provided by CMS via the PAID Act to NGHPs is limited to the previous three (3) years and up to twelve (12) plans/instances. We previously published a blog one year post PAID Act implementation that further explains the history behind the PAID Act. If you would like more background on the PAID Act, our prior blog is available here.

Sanderson Firm PAID Act Observations/Experience over the Past Year

1.     In 2023, NGHP Responsible Reporting Entities’ awareness of the importance of resolving Medicare Part C and D conditional payments as well as awareness of the PAID Act data to conduct lien searches prior to settlement seemed to increase significantly. We have seen, that while challenges in processing the Part C and D information provided in the query response might present an issue at times due to claim system limitations, 2023 saw a large increase in both PAID Act data utilization and claim system upgrades to appropriately process the information.

2.     Due to the increase in utilization of the PAID Act data, 2023 reflected significant delays when attempting to conduct lien searches with the Medicare Advantage Organizations (MAOs). Many MAOs seemed to not anticipate the volume of requests they would receive from NGHP RREs; furthermore, with many MAOs, lien search workflows were not well established. Part D plans, who have not historically been involved in the litigation efforts to provide MAOs with the same recovery rights as Medicare, also reflected especially significant delays.

3.     While plan name, address, and phone number are provided in the PAID Act data, unfortunately, we have continued to experience that often times this information is not necessarily accurate. Many MAOs do not handle their subrogation directly and unfortunately the PAID Act does not compel CMS or MAOs to notify NGHP RREs if they are using a subrogation company to pursue recovery of the conditional payment liens, leading to further confusion and lag time in resolving liens.

4.     The PAID Act data only requires CMS to provide the last three (3) years of enrollment data up to 12 plans/instances. However, we have found that for many claims that have been open for a long period of time, there are plans with potential subrogation interests either beyond the three (3) years or beyond the twelve (12) instances. We see this most often in workers’ compensation claims.

5.     The information sharing occurring between Medicare, the MAOs, and their subrogation companies because of the PAID Act has also caused an increase in transparency for Medicaid liens, ERISA liens, and Medicare supplemental plans, among others. Many of these entities share subrogation partners which has meant that sometimes lien searches conducted for a particular MAO result in additional liens with other entities/plans.

Sanderson Firm Commentary

Sanderson Firm continues to recommend managing MAO exposure with a proactive approach to recovery. While no new major case law regarding MAO recovery rights was established in 2023, this past year saw large-scale implementation by the MAOs and RREs to establish recovery workflows and processes in response to the PAID Act data as well as the previously established case law, 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).

While many MAOs and their subrogation companies became backlogged with lien requests causing wide-scale delays, here at Sanderson Firm we have continued to refine our processes and follow-up procedures as well as learn the workflows, processes and relationships of each individual MAO and subrogation company.

Our specialization in MAO conditional payment lien resolution has allowed us to fast-track our requests through a combination of knowledge and tenacity. Industry-wide lien requests are likely to significantly increase again in 2024 and we expect this knowledge will be even more vital in the year ahead.

The landscape of MAO recovery continues to become increasingly complex. A simple request, for a single lien, can multiply into three separate liens, due to unknown Medicaid, ERISA or other supplemental plan involvement and the recovery rights of these plans are sometimes misrepresented as being the same as MAOs.

Sanderson Firm provides a variety of recovery services including comprehensive handling of Medicare Advantage Part C and Prescription Drug coverage Part D plans as well as other healthcare liens.

To learn more about our services, please contact us.

Stay tuned in the coming weeks for Part 2 of this 2-part blog series where we will discuss PAID Act issues that we expect to see in 2024.