Preparing for the PAID Act: Implementation & Implications

Starting December 11 of this year, payers will be able determine if Medicare beneficiaries are enrolled in Medicare Part C (Medicare Advantage) plans and Part D (prescription drug plans) through the Section 111 query response file. Thanks to the Provide Accurate Information Directly (PAID) Act, three years of enrollment information will be provided. 

This is a big deal because currently payers must ask injured workers to voluntarily provide Part C and D plan information.  Sometimes it is never provided, or the information is incomplete or inaccurate, and Medicare beneficiaries can change plans every year if they choose.

Also, close to 40 percent of Medicare beneficiaries are enrolled in Medicare Advantage programs (Part C) and over 70% have prescription drug, Part D, programs. 

The inability to track down enrollment has caused payers all kinds of headaches and unexpected demands for payments.  While the payers could not determine which plans the injured workers were in and research and resolve conditional payments, Medicare shared Section 111 reporting data with the Part C and D plans. That gave C and D plans the ability to seek reimbursement against a payer who had no idea that an injured worker was even enrolled in the plan.  Plus, reimbursement demands could and often did arise after settlements.

The PAID Act makes it much easier to access Parts C and D plan information.  However, payers need to prepare for changes.

Now What? 

The Section 111 query response data received from the Benefits Coordination & Recovery Center (BCRC) is changing in a big way.  There are 244 new data fields. Parts A, B, C, and D will have the most recent effective dates and termination dates. Part C and D will have most recent and previous plan(s) data, up to three years of data. This will include not only the plan name, but also contract number, enrollment date, termination date, benefit package number and plan address.

Payers can receive and store this data themselves or refuse to accept it.  In other words, it is the payer’s choice whether to receive this information.

Handling Recovery

Based on the Medicare Secondary Payer statute, regulations, and court decisions the Part C and D plans have a right of recovery against the primary plan and all those who receive payment from that primary plan, such as the claimant and the claimant’s attorney.  In some cases, a claim for reimbursement will be issued by the Part C or D plan without initiating an inquiry. Payers should use the contact information from the Section 111 data to contact the plan(s) and determine whether there is a reimbursement claim.

There are several differences among CMS recovery through Part A and B (Original Medicare) and Parts C and D recovery.

• Part C and D plans cannot access the Medicare Secondary Payer Recovery Portal (MSPRP)
• Debt collection is not split into two recovery contractors (Commercial Repayment Center (CRC) and BCRC), however, these plans might contract out their recovery efforts. 
• The C and D plans also cannot refer debts to the U.S. Treasury Department; they must file suit instead.
• Part Cand D plans have less unrelated charges on their claims for reimbursement compared to CRC and BCRC. 
• Appeal rights are only held by the claimant unlike with Original Medicare conditional payment demands where an appeal right is also held by the payer.

Considering the above, on balance, while identifying the plan and obtaining the reimbursement claim may be a bit more difficult, Part C and D claims for reimbursement tend to be easier to resolve compared to demands from CMS’s recovery contractors.

Guidance for Addressing Part C and D Reimbursement

The following is recommended to properly resolve Part C and D reimbursement claims at time of settlement:

• Identify if the claimant is a Medicare beneficiary and enrolled in a Part C or D plan
• Identify If the claimant was ever enrolled in traditional Medicare; if so, investigate conditional payments with CRC and BCRC
• Investigate with Part C or D plan whether it is seeking reimbursement and obtain a letter itemizing reimbursement claims
• Negotiate with Part C or D plan to remove charges unrelated to work injury or where there are other reasonable bases to dispute.  These plans largely use the same dispute and appeal criteria as CRC/BCRC
• Contact plan at time of settlement to confirm final amount owed
• Resolve case with clear understanding of how plan will be reimbursed

Keep in mind that the PAID Act does not change Part C and D reimbursement rights or put any obligations on these plans that did not exist prior to its passage.  Nonetheless, access to plan information by payers will undoubtedly lead to a greater emphasis on contact with the plan prior to settlement.  Payers should make use of this data to query the plan and identify and resolve reimbursement claims at the time of settlement.

By Daniel M. Anders, Esq

Daniel M. Anders, Esq., MSCC, CMSP, is an attorney, certified Medicare Set-Aside Consultant, and expert in Medicare Secondary Payer (MSP) compliance. As Chief Compliance Officer for Tower MSA Partners, Anders oversees all aspects of regulatory compliance associated with the MSP status and local, state, and federal laws. He is president of the National Medicare Secondary Payer Network (MSPN) and a member of the Illinois State Bar Association. He presents at webinars and industry conferences, including WCI and the National Workers’ Compensation Conference. A respected subject matter expert, Anders writes articles, is frequently interviewed for insurance and workers’ compensation publications, and regularly contributes to Tower’s MSP Compliance Blog. 

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