Humana’s Brian Bargender Gives Tips on How to Work with Medicare Part C & D Plans

May 12, 2022

Chalk board with Medicare Part C & D

Attendees of Tower’s Premier Webinar on April 20 received sound advice on how to work with Medicare Part C (Advantage) and D (Drug Benefits) plans. Our guest presenter was Brian Bargender, Consultant, Subrogation and Third-Party Liability with Humana, a nationally recognized expert on these plans.

Bargender noted that these plans have the same rights and responsibilities as original Medicare under the Medicare Secondary Payer (MSP) Act. This means that Part C and D plans must avoid payment for treatment covered by primary payers, such as workers’ compensation or liability. Part C plans take this commitment seriously as they want to prove they are more efficient than original Medicare.

The PAID Act gave primary payers visibility into Medicare beneficiary enrollment status in Parts C and D. Previously, they could only see that an individual was enrolled in Medicare. It was problematic to identify a beneficiary’s plan and resolve conditional payments. The growing popularity of Medicare Advantage plans was making the process more time consuming. Approximately 46% of Medicare beneficiaries use Part C and 75% of the ones on original Medicare have Part D.

Bargender explained the plans’ approach to MSP compliance and touched on Private Cause of Action and Double Damages in the MSP Act. Medicare Advantage plans can obtain double damages from primary payers that refuse to reimburse conditional payments. And primary payers remain liable for repayment until plans are repaid, even if they have already paid the injured worker their settlement.

To make it easier to work with Part C and D plans in light of the PAID Act, Bargender offered these insights and advice:

  • While Section 111 reporting gives primary payers “an” address, it’s not necessarily the address the plan would have chosen. As such, further investigation into the appropriate plan contact may be necessary.
  • Medicare Advantage plans get Section 111 data, but not always in time to act on it. They use it as a back sweep to see if they missed anything.
  • Contact the plans before trying their recovery vendors; they have multiple vendors.
  • Ask for the subrogation or legal departments. Customer service reps at C and D plans are not well versed in Medicare Set-Asides.
  • It’s hard for Medicare Advantage and drug plans to predict and staff for call volume; prepare for delays.
  • The plan may not have the file when payers contact them.
  • It’s good for primary payers to notify the plan(s) when they accept responsibility for the claim, and certainly when they prepare for settlement. The Centers for Medicare and Medicaid Services (CMS) notifies plans later in the process.
  • To minimize calls and delays, provide plans the same information given to CMS for Ongoing Responsibility for Medical (ORM) or Total Payment Obligation to Claimant (TPOC) reporting along with the MSA diagnosis and prescription drug details if they are available.
  • At minimum, plans need this data:
    • Medicare Beneficiary Identifier
    • Name
    • Date of birth
    • Loss/Injury Date
  • Part C and D plans cannot correct errors in the file; these must be done through Section 111 reporting or through the Benefits Coordination and Recovery Center (BCRC).
  • These plans do not track how funds are used or exhausted. They need a letter from CMS to the MSA administrator or beneficiary that says funds were properly exhausted before they can start paying for injury care.

Tower has found Bargender and Humana’s subrogation team to be very helpful. They promptly identify specific reimbursement claim information when the claimant is enrolled in a Humana Medicare Advantage plan. Further, they are open to understanding the liability issues and basis for settlement; this is something not typically found with the Medicare conditional payment recovery contractors.

As Bargender stressed, “proactive beats reactive,” when it comes to resolution of these Part C and D claims. Primary payers must be proactive in using PAID Act data to identify whether a Medicare eligible claimant is enrolled in a MA plan, and, if so, investigate whether the plan is seeking reimbursement for payments it made on the claim.

For our Section 111 reporting clients, Tower has the PAID Act data readily available. Whether you are a reporting or non-reporting client, we can help you contact the Part C and/or D plan to investigate and resolve conditional payments at the time of settlement.

If you have questions or want a link to the recorded webinar, please contact Dan Anders at

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The PAID Act: Implementation and Implications for Claims Handling

Premier Webinar: Medicare Advantage Plan Reimbursement – What Now?

April 7, 2022

In December 2021, the Centers for Medicare and Medicaid Services (CMS) started providing access to data showing a claimant’s enrollment in Medicare Part C and D plans. Now payers are wondering how to best interact with Medicare Advantage (MA) plans and prescription drug plans. What are their reimbursement rights? How does this work with Section 111 reporting?

Tower is pleased to feature a guest presentation by Brian Bargender, Management Consultant, Subrogation and Other Payer Liability for Humana on Wednesday, April 20 at 2:00 PM ET.  Brian is arguably the industry’s foremost expert on Part C and D plan subrogation. Humana is the second-largest Medicare Advantage Plan and Part D plan in the country and has been the leading advocate for reimbursement under the MSP Act.

Here’s just some of what you will learn:

  • Role of Part C and D plans in providing services to Medicare beneficiaries.
  • Reimbursement rights of Part C and D plans under the Medicare Secondary Payer (MSP) Act.
  • Interplay between CMS and Part C and D plans in use of Section 111 Mandatory Insurer Reporting data.
  • Part C and D plans role in Workers’ Compensation MSAs.
  • Best practices for working with Part C and D plans to resolve reimbursement claims.

A Q&A session will follow the presentation, and you can provide questions at the time you register. Please click the link below and register today!


Three Medicare Secondary Payer (MSP) Predictions for 2021

January 14, 2021

rainbow over a highway with the year 2021 painted, illustrating predictions for Medicare Secondary Payer in 2021

We take a look at what’s in the crystal ball for Medicare Secondary Payer (MSP) short-term issues in the year ahead.

This year marks the 20th anniversary of the famous —or infamous, depending on your perspective— “Patel Memo” that formally launched CMS’s Workers’ Compensation Medicare Set-Aside review process.  It was probably safe to assume that a government program like this would still be around two decades later. However, the expansion of CMS’s authority to require mandatory reporting along with stepped up efforts to recover conditional payments by both Medicare and Medicare Advantage plans was less predictable.

I won’t hazard a guess on what Medicare Secondary Payer compliance will be like 20 years from now but will predict the outcomes of some short-term issues.

Liability MSAs

In June 2012 CMS issued an Advanced Notice of Proposed Rulemaking (ANPRM) with ideas as to how Medicare’s interests could be considered in the settlement of future medicals in a liability case.  Ultimately, the ANPRM was withdrawn in October 2014.

Nothing further was heard from CMS management until December 2018 when it indicated proposed rules would be issued in September 2019.  Subsequent notices postponed the date to March 2021.

Prediction:  Since CMS will have new leadership and its attention has turned to vaccine distribution, I suspect we will not see proposed rules on LMSAs this year.  Even if CMS proposes regulations, they would not be implemented until after a comment period followed by revisions, which would likely stretch into 2022.

Section 111 Penalties

On February 18, 2020, CMS issued its proposed regulations specifying how and when it would impose civil money penalties if Non-Group Health Plans fail to meet Section 111 Mandatory Insurer Reporting responsibilities.  A comment period ended on April 20, 2020 (Please see CMP Comments Submitted for Tower’s comments on the proposal).

Prediction:  Since CMS completed the process of releasing the proposed rule and receiving comment and the issuance of this regulation is statutorily required by the SMART Act of 2012 prior to issuing any penalties, I expect the final rule will be issued in 2021.  Once issued, it will likely become effective within 60 days.


On December 11, 2020, President Trump signed into law HR 8900, Further Continuing Appropriations Act, 2021, which included the provisions of the Provide Accurate Information Directly Act or PAID Act.

The PAID Act requires CMS to provide applicable plans (liability insurance, no-fault insurance and workers’ compensation laws or plans) access to Medicare beneficiary enrollment status in Medicare Advantage and Part D Prescription Drug plans through the Section 111 Mandatory Insurer Reporting process. (Please review PAID Act Becomes Law for a full explanation of the law and its implications.)

Prediction:  Per the law, CMS must provide access to Medicare Advantage and Part D plan information by December 11, 2021 (one year from the date of enactment).  As CMS must implement technical changes to the Section 111 reporting platform to provide such access, it may not be ready by that date.

Beyond these three predictions, some issues to watch in the coming year: 

  • Continued trend toward non-submit MSAs
  • More professional administration of MSAs
  • Cases affecting Medicare Advantage plan recovery rights
  • Per proposal from President-elect Biden, lowering of Medicare eligibility age to 60
  • “New” MSA reform legislation

A happy and safe new year to you and your families.

Medicare Advantage Plan Hits Speed Bump in Effort to Recover Against Medicare Beneficiary and Her Attorneys

March 22, 2018

Case law supporting Medicare Advantage Plans (MAPs) reimbursement rights against primary plans (WC, Liability, No-Fault) continues to accumulate with a recent decision from the United States District Court for the District of Connecticut in Aetna Life Insurance Company vs. Nellina Guerrera, et al., Civil Action No. 3:17-cv-621 (3/13/2018). Consistent with other recent decisions on the issue, the court found that the MAP, Aetna, has a right of reimbursement against the primary plan, Big Y, including double damages, if a suit is filed under the Private Cause of Action (PCA) provision of the Medicare Secondary Payer Act. In determining the rights of Aetna under the PCA provision, the court was persuaded by prior appellate court decisions in In Re Avandia, 685 F.3d 353 (3rd Cir. 2012) and Humana v. Western Heritage, 832 F.3d 1229 (11th Cir. 2016).

While the decision represents the first federal court in the Second Circuit to fully address the use of the PCA provision by a MA plan against a primary plan, what is potentially more significant is the court’s holding that MAPs cannot utilize the PCA to sue Medicare beneficiaries or their attorneys, a decision that is inconsistent with other federal court rulings.

Case Background

The case arose as follows:

  • The Medicare beneficiary, Nellina Guerrera, allegedly sustained personal injuries at a Big Y store on 2/20/2015.
  • Ms. Guerrera was enrolled in an Aetna MAO Plan which paid for injury-related medical in the amount of $9,854.16.
  • Ms. Guerrera retained the law firm Carter Mario to represent her in a liability claim against Big Y.
  • Beginning on 9/22/2015, a year before a settlement agreement, Aetna made multiple attempts to provide notice to defendants of their lien.
  • On 3/10/2016 Big Y agreed that it would not send the full amount of any settlement to Ms. Guerrera and her attorneys without first dealing with Aetna’s lien (We assume this may have been an agreement with Aetna).
  • Case was settled for $30,000 with full amount paid to Ms. Guerrera and her attorneys on 9/15/2016 without addressing the reimbursement claim of Aetna.
  • Aetna files suit not only against Big Y, but also Ms. Guerrera, and Ms. Guerrera’s attorneys under the PCA provision of the MSP Act.
Court Decision

The primary questions for the court were whether the PCA provision of the MSP Act is available to MAPs, who may be sued under the PCA (primary plans, Medicare beneficiaries, attorneys) and under what circumstances a suit may be brought. The PCA states as follows:

There is established a private cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement) in accordance with paragraphs [(b)](1) and [(b)](2)(A).

The court reached the following conclusions on each question.

Why May Sue Under the PCA?

In reaching its decision regarding who may be sued under the PCA the court cited the appellate court decisions In Re Avandia and Western Heritage as being persuasive in concluding the PCA unambiguously permits suits by MAPs. The court went on to find that even if the PCA was interpreted to be ambiguous, CMS regulations stating MAPs may sue under the PCA would be given deference, thus leading to the same conclusion.

Who May Be Sued Under the PCA?

While the court notes the PCA does not specify against whom a suit may be filed, it cites to Second Circuit precedent which has interpreted primary plans or payers as entities which may be sued under the PCA. The court also finds that Big Y meets the definition of a primary plan under the MSP Act and as such the suit can proceed against it.

Aetna though not only filed suit against the primary plan, Big Y, but also Ms. Guerrera, the Medicare beneficiary, and her attorneys. As to these defendants the court reaches a different conclusion. While admitting that the PCA language is vague, the court nonetheless interprets the Congressional intent as only permitting suits against primary plans. It cites the language “a primary plan . . . fails to provide for primary payment” as what not only triggers the ability to sue under the PCA, but also limits recovery to solely primary plans. The court finds that had Congress intended the PCA to apply to Medicare beneficiaries and their attorneys, it would have created such a cause of action similar to that applicable to primary plans. While the court notes its ruling conflicts with CMS’s interpretation, which would provide MAPs with a right of reimbursement against a Medicare beneficiary and their attorney, the court held it will not defer to CMS’s interpretation in this regard.

In finding that the PCA does not provide for a suit against a Medicare beneficiary or the beneficiary’s attorneys, the court declined to follow other federal court decisions which have found such an action to be viable under the PCA, such as Humana Insurance Company v. Paris Blank LLP.

When is a Suit Proper under the PCA?

In regard to the question as to when a suit is proper under the PCA, the court looks to the term “appropriate reimbursement” and determines that Big Y’s payment to Ms. Guerrera and her attorneys did not amount to appropriate reimbursement when the primary plan has notice of a claim for reimbursement from a MAP. The court goes on to again cite the Western Heritage decision which in turn cites Medicare regulations:

If a beneficiary or other party fails to reimburse Medicare within 60 days of receiving a primary payment, the primary plan ‘must reimburse Medicare even though it has already reimbursed the beneficiary or other party.’ 42 C.F.R. § 411.24(i)(1)

Accordingly, once 60 days passed from the date of payment by Big Y to Ms. Guerrera and her attorneys and no repayment was made to Aetna, Big Y became obligated to reimburse Aetna and subject to a suit by Aetna under the PCA.

Practical Implications of Decision

This decision is at the district court level, thus does not have precedential value which would make it binding precedent as we have in the 3rd (Pennsylvania, New Jersey & Delaware) and 11th (Florida, Alabama & Georgia) Circuits. Nonetheless, it represents the first decision in the 2nd Circuit (Connecticut, New York and Vermont) to completely address MAP reimbursement under the PCA, thus will be used as persuasive authority in future cases both in and out of the 2nd Circuit. While the decision in this case continues the trend of court decisions finding in favor of MAPs rights of reimbursement against primary plans under the PCA, it has diverged with prior decisions in finding suits against Medicare beneficiaries and their attorneys are not allowed under the PCA.

What this means for primary plans is they have a target firmly planted on their backs, especially if future court decisions find MAPs cannot recover against Medicare beneficiaries or their attorneys. We suspect that this issue will eventually be addressed at the appellate court level, if not in this case, then in future litigation.

What steps then can you take as a primary plan to eliminate this risk:

  • Identify Medicare eligible claimants.
  • Determine whether Medicare eligible claimants are or were enrolled in a MAP since the date of injury.
  • If enrolled in a MAP, then investigate whether the plan is seeking reimbursement stemming from the injury.
  • Make arrangements to directly reimburse the MAP for injury-related payments.

Tower MSA is readily available to assist you with our MA Plan investigation, negotiation and resolution service. Please contact us at (888) 331-4941 or for further information or questions.

Don’t Plan to Fail: Best Practices for Addressing Medicare Advantage Plan Reimbursement

October 25, 2017

Benjamin Franklin must have been contemplating Medicare Advantage Plan reimbursement when he uttered one of his famous lines: “If you fail to plan, you are planning to fail.” Over the past few years Medicare Advantage plans have increasingly been seeking reimbursement for payments made stemming from workers’ compensation, liability and no-fault claims, otherwise known in Medicare circles as Non-Group Health Plans (NGHPs). Despite these increasing efforts, many NGHPs have not planned how they should respond to such reimbursement claims.

With the goal of working with our clients to educate and assist with proper planning, earlier this month, Tower MSA was privileged to have Brian Bargender, Subrogation & Other Payer Liability Business Consultant for Humana, participate in a webinar to discuss reimbursement rights of Medicare Advantage plans, and best practices for investigating and responding to reimbursement claims. For those who were unable to attend, or would like a refresher, we are pleased to provide below a summary of Mr. Bargender’s presentation along with some final thoughts and takeaways.

Medicare Advantage Plan Background

Part C Medicare Advantage plans (MA plans) are alternative delivery mechanisms for traditional Medicare benefits (Parts A and B) provided by private companies under contract with CMS. Medicare beneficiaries have the option of choosing one of these Medicare Advantage plans during annual or special enrollments periods. The three largest MA plan sponsors (representing almost half of the available plans) are UnitedHealthcare, Humana and Aetna. As of 2017, one-third of Medicare beneficiaries are enrolled in MA plans.

Medicare Advantage Plan Recovery Rights

Pursuant to CMS direction, MA plans must enforce the Medicare Secondary Payer Act (MSP) and will be audited by CMS for compliance with the Act. Consequently, these plans are obligated to coordinate benefits such that MA Plan coverage is denied when a primary payer is covering treatment and when the MA plan pays, but later learns of primary payer responsibility, seek reimbursement for payments made relating to the particular workers’ compensation, liability or no-fault claim.

MA plans right to reimbursement, including double damages, from NGHPs under the MSP Act has been acknowledged in at least two significant federal appellate court decisions:

  • In re: Avandia, 685 F.3d 353 (3d Cir. 2012)
  • Humana Med. Plan, Inc. v. W. Heritage Ins. Co., 832 F.3d 1229 (11th Cir. 2016)

Medicare Advantage Plan MSP Enforcement Challenges

Despite CMS’s direction to MA plans regarding enforcement of the MSP Act, including coordination of benefits, the data available to the MA plans to perform this task is inconsistent and error prone. Consequently, MA plans have taken one of three approaches to MSP enforcement:

Inactive: Minimal effort
Reactive: Relying upon member and medical provider reporting of primary plans
Proactive: Claim screening and investigation

As Mr. Bargender explained, Humana is taking the proactive approach. Nonetheless, the challenges faced by Humana in identifying coordination of benefits situations has proven difficult as a result of gaps in medical provider and Medicare beneficiary self-reporting and data provided by CMS which is “too little, too late, often wrong.” Additional challenges faced by MA plans are incomplete direction from CMS and non-cooperation of Medicare beneficiaries and plaintiff attorneys to MA plan reimbursement claims. As such, Humana utilizes a multi-faceted approach of member questionnaires, public records, such as accident reports and workers’ compensation claims, and non-public records, such as data relayed by CMS, to determine possible MSP coordination of benefits and reimbursement opportunities.

Best Practices for Non-Group Health Plans and MA Plan Reimbursement

Humana’s proactive approach then has the ultimate goal of reimbursement for charges related to the claimed injury. Mr. Bargender shared the following basic precautions to be taken by NGHPs:

  • Train front-line staff on MSP basics – including MA & Part D
  • Assume older & disabled claimants have some form of Medicare
  • Be proactive when told claimants don’t have original Medicare
  • Watch for other payer info in medical records
  • Watch for notices from other payers
  • No-fault and accepted work-comp claims
  • Pay treating providers directly for outstanding medical bills
  • Be suspicious of billing gaps (other payer?)

And when it comes to Liability and disputed or denied workers’ compensation claims:

Find out who paid for medicals

  • Providers rarely wait for settlements
  • CMS “no payment” letters aren’t the last word
  • Request benefit ID card(s)
  • Ask to see other payer “no payment” letters
  • Medicare/Medicaid dual beneficiaries? …assume Part D paid Rx

Address MSP repayment before agreeing to settlement

  • Determine amount before settlement is finalized
  • Don’t assume plaintiff will reimburse MA plan or unpaid providers
  • What does settlement indemnification language actually accomplish?

In terms of negotiating and resolving MA plan claims for reimbursement, Mr. Bargender offered as follows:

Most MA plans are open to working with primary payers

Focus on these:

  • Rationale for denying beneficiary’s underlying claim, not MA/Part D rights
  • Limits exhausted, treatment not allowed/capped, etc.
  • What’s related (was it in the demand or release?)
  • Errors in plan’s payment ledger
  • Extenuating circumstances

Not on these:

  • Reasonableness of amounts paid by MA
  • Claim filing time limits vs. MSP statute of limitations
  • Contract language” in the MA Evidence of Coverage document

Final Thoughts and Takeaways

In working with Mr. Bargender and the subrogation team at Humana, we have found them very helpful in promptly identifying specific reimbursement claim information where the claimant was enrolled in a Humana Medicare Advantage plan. Further, they are open to understanding the particular liability issues and bases for settlement, something not typically found with the Medicare conditional payment recovery contractors.

The primary takeaway from Mr. Bargender’s presentation is NGHPs must be proactive in identifying whether a Medicare eligible claimant is enrolled in a MA plan, and, if so, investigate whether the plan is seeking reimbursement for payments made related to the claim. As there exists no central database accessible to NGHPs in which to identify the MA plan a claimant is enrolled, the claims handler must be proactive in inquiring of the claimant whether they are enrolled in such a plan.

Tower MSA Partners will work with our clients to assist in identifying whether a claimant may be enrolled in a MA plan, identify the name of the plan and investigate whether such plan is seeking reimbursement stemming from the claim. We stand ready to assist you through general consultation on ensuring your MSP compliance program appropriately addresses MA plans or consultation on MA plan recovery* in a specific claim.

*While we did not delve into Part D Prescription Drug plans in this article, such plans arguably have similar reimbursement rights as Part C Medicare Advantage plans. NGHPs should also be aware of the potential for reimbursement claims from these plans.
Daniel Anders

Tower MSA to Host Free Webinar on Medicare Advantage, Part D Plan Recovery Recovery Rights

September 14, 2017

Tower MSA Partners will host a free webinar on Medicare Advantage and Part D Plan Recovery Rights on October 4 at 12:00 PM EDT. Tower MSA Partners is pleased to have Brian Bargender, of Humana, as the guest presenter for the Webinar. Humana is the second largest Medicare Advantage Plan and Part D plan in the country and has been the leading advocate for seeking reimbursement under the MSP Act from primary payers and Medicare beneficiaries for payments made through these plans.

Areas covered in the presentation are:

  • Intro to Medicare Advantage and Part D Plans
  • MSP guidance provided by CMS to MA and Part D Plans
  • MA and Part D MSP enforcement rights
  • Obstacles to enforcing MSP
  • Tips for addressing MSP with MA and Part D plans

To register for the Tower MSA Premier Webinar, click here.

To read more about the Webinar, click here to read article posted on WorkersCompCentral about the Webinar.

Medicare Advantage Plans – A New Layer in the Conditional Payment Process?

November 8, 2012

Over the past few years, much has been written about the mandatory reporting requirements associated with MMSEA Section 111 and the increased interest in ensuring that Medicare is reimbursed for any conditional payments made for a workers’ compensation injury.   Unfortunately, under this same backdrop of focused attention on recovery, very little, (i.e. no) attention has been given to the unique issues raised when settling a case with a Medicare beneficiary who receives Medicare Part D benefits, or is enrolled in a Medicare Advantage (MA) plan. This changed overnight when, On June 28, 2012 in the case of In re Avandia Marketing, Sales Practices and Products Liability Litigation, 2012 WL 2433508, the Third Circuit Court of Appeals became the first Circuit Court to recognize that a Medicare Advantage Plan has a private cause of action under the Medicare Secondary Payer Act (“MSP”).  So what are the recovery rights of MAP’s and how do we make certain the interests of both the payer and Medicare are appropriately considered when settling a case with a Medicare beneficiary who is enrolled in such a plan?


In 1980, Congress enacted the Medicare Secondary Payer (MSP) statute in an effort to reign in the burgeoning costs of the Medicare program. Under the MSP statute, Medicare makes “conditional” payments, and Medicare has a right of reimbursement if it determines that a third-party primary payer bore responsibility for those payments. 42 U.S.C. § 1395y(b)(2)(B) (2006). The MSP also created a private cause of action to enforce the right to recover payments made by Medicare that are the responsibility of a primary plan. 42 U.S.C. § 1395y(b)(3)(A).

In 1997, Congress created Part C of the Medicare law, now known as the Medicare Advantage program, as an alternative to the traditional Medicare program under Parts A (hospital insurance) and B (medical insurance). MAP’s are offered by private companies and provide all coverage provided by Medicare Part A and Part B and typically offer additional coverage, such as vision, hearing, dental, etc. MAP’s are essentially Medicare HMOs operated by private insurers. The statute creating these plans contains an independent secondary payer provision, which references but does not fully adopt or incorporate the MSP statute. 42 U.S.C. § 1395w-22(a)(4).

Enacted in 2007, the Medicare, Medicaid, and State Child Health Insurance Program (SCHIP) Extension Act (MMSEA) expanded the ability of the federal government to recover sums owed under the MSP statute by imposing strict reporting requirements and penalties for noncompliance. 42 U.S.C. § 1395y(b)(7), (b)(8). Under MMSEA section 111, all insurers as well as self-insurers, collectively referred to as “responsible reporting entities” (RREs), must report information regarding payments made to Medicare beneficiaries and other data to ensure proper coordination of benefits with the Medicare program. 42 U.S.C. § 1395y(b)(7)(A); 42 U.S.C. § 1395y(b)(8)(A). This reporting requirement applies irrespective of whether the beneficiary is enrolled in traditional Medicare or in a MA plan.

What Are the Recovery Rights of MAP’s

Medicare conditional payments are a potential cost that must be considered in any claim involving a Medicare beneficiary.   Medicare has the right to be reimbursed, and the power to enforce that right, under the Medicare Secondary Payer Act (MSPA) to the extent that Medicare has already paid for injury related medical treatment.   What some do not appreciate, however, is that the conditional payments referenced in the standard Conditional Payment Letter from the Medicare Secondary Payer Recovery Contractor (MSPRC) are only those that have been made under Medicare Part A (inpatient and some outpatient care) and Part B (physician’s fees, therapy, durable medical equipment, etc.), sometimes referred to collectively as “traditional Medicare”.   MSPRC presently does not track, and does not attempt to recover, those payments that have been made under Part C (Medicare supplemental plans) or Part D (drug coverage) and very often these other payments are quite substantial.

Part D payments are made by private insurers, and third party pharmacy suppliers, approved by, and under contact with, Medicare and Part C payments are made by private insurers who have been approved by Medicare to write policies that cover items that are either not covered by Medicare under Parts A and B (this is Medicare supplementary coverage) or which replace traditional Medicare completely and which provide additional medical benefits as well.  These Part C comprehensive plans are known as Medicare Advantage Plans (MAP’s) and the insurers or sponsors are referred to as Medicare Advantage Organizations (MAO’s). It should be noted that some, but not all, MAP policies also replace Part D coverage.

While there is a general agreement that MAP’s have a contractual right to seek recovery of expenses paid to a Medicare beneficiary, the existence of a private right of action to enforce that claim in federal court under the MSP statute has been less straightforward. MAP’s contend that they have rights as a secondary payer under the MSP statute to seek recovery of paid expenses. Beneficiaries and primary payers, on the other hand, contend that the MSP statute does not confer a private cause of action on MAP’s. Prior to 2012, federal district court cases lend support to the position that MAP’s do not have a private right of action to enforce their reimbursement rights under the MSP statute; instead leaving MAP’s to enforce their rights as secondary payers under state contract law. However, the more recent Third Circuit of Appeals opinion In re: Avandia Marketing, Sales Practices and Products Liability Litigation, 2012 WL 2433508 (6th Cir. 6/28/12) marks a departure from earlier decisions and will no doubt create uncertainty and debate surrounding the reimbursement rights of MAP’s going forward.

Third Circuit Opinion–In re: Avandia Marketing, Sales Practices and Products Liability Litigation

In In re: Avandia Marketing, Sales Practices and Products Liability Litigation, No. 11-2664, 2012 WL 2433508 (3rd Cir. 6/28/12), the Third Circuit Court of Appeals held that a MAP has a private right of action under the MSP to recover payments it has made that are the responsibility of a primary plan. In doing so, the court reversed the district court, which had dismissed the claims of the involved MAP on the basis that the MSP does not grant a MAP a private right of action to enforce its rights as a secondary payer.

In sum, the Third Circuit found that MAP’s have the same recovery rights as traditional Medicare based on a plain reading of the MSP statute, given the legislative history and policy goals of the Medicare Advantage program, and considering due deference owed to Medicare’s interpretation of the MSP statute and related regulations.

Tower MSA Partners – Proactive in Pursuit of Resolution

Regardless of whether an injured worker / plaintiff received Medicare benefits through a MAP or traditional Medicare, compliance with MMSEA Section 111 MIR mandates that the responsible reporting entity report the settlement to CMS. This reporting obligation is separate and distinct from a MAP’s recovery rights under the MSP statute.  In addition, Primary payers may not be aware that during a March 22, 2012 teleconference call, CMS stated that they are now sharing MMSEA Section 111 Data with MAP’s.  Therefore, MAP’s are now armed with settlement information concerning Medicare beneficiaries in the same manner as traditional Medicare.

Today, about 13.3 Million People are enrolled in Medicare Advantage Plans. There are close to 50 million Medicare beneficiaries, so more than 1 in 4 is on a Medicare Advantage Plan compared to traditional Medicare. Furthermore, Medicare Advantage Plans are gaining members – almost 10% more enrollees over the last year. In terms of Part D Prescription Plans, the number of enrollees for 2012 is estimated it to be around 10.6 million. There are approximately 1,041 plans available from both traditional and Medicare Advantage Plans to choose from.

From a practical standpoint, the Avandia decision creates several challenges.

  1. How are Medicare’s interests protected in a Medicare Advantage case? Is the primary plan now exposed to repeat double damage claims any time the Part C or Part D plan makes payment that was part of a settlement? It would appear that an approved Liability Medicare Set Aside Arrangement (LMSA) would help, but rules are still yet to be developed by Medicare.
  2. Will the Medicare Advantage Plan negotiate or hold at 100% recovery rate? Now more than ever, we have an important reason to support Hadden v. U.S.
  3. How will Medicare contractor enhancements, such as the $300 exemption, Fixed Payment Option, or Self Calculate Option work in this arena? It is unknown, as MAP’s do not use Medicare contractors to pursue its recovery.

While these questions remain, Tower MSA Partners recognizes and will pursue conditional payments from MAP’s based on the following understanding:

  1. Tower MSA Partners will assist clients in recognizing a Medicare Advantage Plan and its demand letters.
    1. MAP demands are issued from the MAP directly, i.e., if the MAP is Humana, the demand will be issued on Humana letterhead.  This is unlike traditional Medicare conditional payment demands which are issued directly from CMS and on MSPRC letterhead.
    2. Forward all demand letters from MSPRC, as well as from any MAP or Part D provider when presented.
  2. Tower MSA Partners will be proactive in determining whether a MAP demand exists.
    1. Request enrollment/benefit history from claimants/plaintiffs prior to settlement.  As a Medicare beneficiary can move between traditional Medicare (Part A & B) and Medicare Advantage (Part C), the parties will need to clear both Medicare and Medicare Advantage, including Part D, for every case.
    2. Contact both MSPRC and MAP for conditional payment information.
    3. Follow the same protocols as are in place with traditional Medicare conditional payments to satisfy the interest of the MAP

Proactively addressing the claims of MAP’s in this manner will relieve much of the uncertainty surrounding their reimbursement rights.  For questions regarding conditional payment lien negotiations, MAP’s and Medicare Part D recovery, please contact Tower MSA Partners @