Issuance of Medicare Part D Conditional Payment Letters Increasing

Several of our clients have been experiencing an increase in conditional payment letters from Medicare Part D prescription drug plans. Historically, Part D plans have been less active in recovery of conditional payments than traditional Medicare or Medicare Advantage Part C plans; however, the tide appears to be changing. Why are Part D Plans recently increasing their recovery efforts? One can speculate, but we do know the following:

Not long ago on May 31, 2018, CMS updated their MAPD Plan Communication User Guide to Version 12.1. Within Section 3.7.1. of the Guide, where referencing Part D conditional payments, the Guide indicates: “When these mistaken or conditional primary payments are made, the Part D Plan is required to recover the primary payment from the relevant employer, insurer, WC/no-fault/liability carrier, or enrollee. The Part D Plan is also subject to audit or reporting requirements.” (emphasis added)

Clearly, the notion that a Part D plan may be subject to an audit or reporting requirements by CMS is likely a strong factor for Part D plans to more aggressively seek recovery of conditional payments.

Further, the Medicare Prescription Drug Benefit Manual, Chapter 14 (Coordination of Benefits), Section 50.12 states: “The MMA (§1860D-2(a)(4)) extended MSP requirements that are applicable to MA organizations to include Part D sponsors. Accordingly, Part D sponsors will have the same responsibilities under MSP requirements as MA plans, including the collection of mistaken primary payment from insurers, group health plans, employer sponsors, enrollees, and other entities; and the relationship between MSP rules and State laws. Part D sponsors must properly apply MSP requirements and regulations to their payments (e.g., working aged, worker’s compensation (WC)).” (emphasis added)

We also know that Part D plans receive primary plan information from the BCRC/Section 111 MMSEA Reporting data. One frequently occurring and frustrating issue for primary plans is that often, Part D conditional payment letter or demands are issued to the primary plan post-settlement. This is likely due to the fact that Part D plans often receive the BCRC information delayed after a TPOC has been reported to CMS, which CMS then must in turn provide to the Part D plan. As the claim file has already closed, this poses a difficulty in reimbursing the Part D plan. Further, if the release language is ambiguous our unclear as to how all various Medicare liens will be addressed, this could pose another obstacle to a successful/finalized settlement.

What does Franco Signor recommend currently considering the recent influx of Part D conditional payment letters?

1. Ensure there is precise settlement language addressing how and which party will address any Medicare conditional payments, whether it be Part A, B, C or D. Part D plans, like Medicare, can pursue recovery for conditional payments from any party to the settlement. Franco Signor can assist with precise MSP settlement language.

2.Be proactive where possible to avoid conditional payment exposure post-settlement. Prior to settlement, request that the Medicare beneficiary provide all Part C and D plan enrollment which occurred during the life of the claim. Since Part D plans have “the same responsibilities under MSP requirements as MA plans,” the Part D plans also have a 3-year statute of limitations to recover conditional payments under the Medicare Secondary Payer Act (MSP).

a.  Primary plans may want to be especially careful in jurisdictions within the 3^rd and 11^th Circuit (New Jersey, Delaware, Pennsylvania, Alabama, Georgia and Florida) where courts have ruled that MA/Part D plans have a right to an MSP double damages private cause of action where the primary plan failed to reimburse the MA/Part D plan.

3. Because relying upon a Medicare beneficiary to recall all prior Medicare plan enrollment can be unreliable, we need CMS to provide enrollment information directly to primary plans. Support the PAID Act which would arm primary payers with an injured party’s Medicare Advantage and Part D enrollment information at the time of Section 111 query, so that conditional payments can timely be addressed.  Take action by clicking here: http://www.marccoalition.com/take-action.html

4. Engage Franco Signor to reduce improper conditional payment exposure. Franco Signor reduces conditional payment amounts for clients by nearly the entire amount of the initial demand in the vast majority of claims. This high percentage reduction success rate illustrates the extent of unrelated/inaccurate conditional payments asserted by Medicare, Medicare Advantage and Part D plans. 

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