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.
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 Ultimately, the ANPRM was withdrawn in October 2014.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.
The recently enacted PAID Act fixes long-term annoyances for MSA companies in securing accurate information about beneficiaries’ Medicare Advantage prescriptions drugs plans.
Right now, the Centers for Medicare and Medicaid Services (CMS) can tell payers which workers’ compensation claimants are Medicare beneficiaries. However, the agency has historically said that privacy concerns prevent it from sharing which Medicare Advantage Plans or Prescription Drug Plans these beneficiaries have joined. This means Medicare Set Aside (MSA) companies and insurers have to ask claimants or their attorneys and the information was sketchy at best, leading to conditional payment demands – and some lawsuits – post settlement.
In mid-December, the Provide Accurate Information Directly (PAID) Act was passed and signed into law, enabling Medicare to respond to queries by providing the name and address of beneficiary’s Medicare Advantage or prescription drug plans. The law should help end years of aggravation over Medicare Advantage Plan identification, according to Tower MSA Partners’ Dan Anders, who was interviewed for WorkCompCentral’s article on the law: Medicare Set-Aside Firms Applaud Passage of PAID Act Provisions.
CMS: PAID Act Implementation Guidance & New ORM Termination Option
PAID Act Becomes Law
The recently enacted PAID Act ensures that insurance carriers have access to Medicare Advantage plan enrollment information
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 (It is named Transparency of Medicare Secondary Payer Reporting Information in Section 1301 of the law).
What does all this mean? In short, the PAID Act requires the Centers for Medicare and Medicaid Services (CMS) 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. Currently, this information can only be obtained from claimants which impedes the applicable plans’ efforts at mitigating their exposure to reimbursement claims from these Medicare Advantage and Part D plans.
Background on PAID Act
CMS has consistently asserted that Medicare Advantage and Part D plans have the same or similar rights of recovery under the Medicare Secondary Payer (MSP) Act as CMS itself. Federal courts have largely agreed with CMS’s position, notably finding Medicare Advantage plans can seek post-settlement reimbursement against applicable plans, including double damages.
Presently, the applicable plans do not have access to Medicare Advantage and Part D plan enrollment information. CMS claims statutory privacy limitations prevent it from providing access. Plans are forced to rely on claimants to voluntarily share their Medicare Advantage plan or Part D plan enrollment, an inconsistent and unreliable method.
To address this problem, a group of industry stakeholders, through the Medicare Advocacy Recovery Coalition (MARC), advocated for the PAID Act. The National Medicare Secondary Payer Network (formerly NAMSAP), in which Tower is a corporate partner and member, endorsed the bill in 2018.
The bill, now law, provides that if through the Section 111 query process the claimant is identified as a Medicare beneficiary, then CMS must also respond with the following:
Whether a claimant subject to the query is or during the preceding 3-year period has been, entitled to benefits under the program under this title on any basis; and
to the extent applicable, the plan name and address of any Medicare Advantage plan under part C and any prescription drug plan under part D in which the claimant is enrolled or has been enrolled during such period.
In other words, if the claimant has been enrolled in a Medicare Advantage or Part D plan in the prior three years, the applicable plan will have access to that information through the Section 111 Mandatory Insurer Reporting query process.
We applaud the passage of the PAID Act, which will make it easier for payers to proactively identify and then investigate and resolve Medicare Advantage and Part D Prescription Drug plan reimbursement claims. As a result, claims can be settled with confidence that a reimbursement claim or lien will not pop-up weeks, months or years later.
CMS has one year after the date of enactment, that is December 11, 2021, to have the enhanced Section 111 query process in place. When Tower receives technical guidance on how this change will be incorporated into the current Medicare beneficiary query process, we will update our Section 111 reporting clients.
As always, if you have any questions, contact Dan Anders, Tower’s Chief Compliance Officer, at firstname.lastname@example.org or 888.331.4941.
CMS: PAID Act Implementation Guidance & New ORM Termination Option
WorkCompCentral Explains the PAID Act
On 5/18/2018, the Provide Accurate Information Directly Act (or the proposed PAID Act) was introduced in Congress for the purpose of allowing settling parties an easy method to identify if a claimant is enrolled in a Part C or D plan or Medicaid. The bill, H.R. 5881, sponsored by U.S. Rep. Gus Bilirakis R-Fla and U.S. Rep. Ron Kind, D-Wisc, requires the Centers for Medicare and Medicaid Services (CMS) to share information on not only whether a claimant is a Medicare beneficiary, but also whether the claimant is enrolled in a Part C Medicare Advantage (MA) Plan, Part D Prescription Drug Plan or Medicaid. It also requires CMS to provide the identity of the MA or Part D Plan or state Medicaid program in which the claimant is or was enrolled.
The catalyst for this legislation comes from stepped up efforts by these various plans and programs, especially by MA Plans, to seek reimbursement from settling parties. MA Plans have largely prevailed against insurance carriers in seeking reimbursement under the Medicare Secondary Payer Act which has led to a heightened awareness of the potential for such claims and the need to identify claimants enrolled in such plans and programs prior to settlement.
While liability and no-fault carriers and workers’ compensation plans are now on notice of the potential for such reimbursement claims, there presently exists no universal method to identify a claimant’s enrollment status, short of asking the claimant. Accordingly, the bill provides a solution by requiring CMS to share such enrollment information.
A review of the proposed PAID act shows the enrollment information would be shared through the Section 111 Mandatory Insurer Reporting query process. In short, along with identification of whether a claimant is a Medicare beneficiary, the query response would also provide whether the claimant is or has been enrolled in a MA or Part D Plan or a state Medicaid program for the past three years and the name of the plan or program. The insurance carrier or self-insured entity would then be able to readily contact the Part C or D plan or Medicaid program to resolve any claim for reimbursement.
The bill was referred to the Committee on Ways and Means and the Committee on Energy and Commerce for further action. Tower MSA Partners will provide updates on the legislation when warranted.