Medicare Advantage Plans (MAPs), also known as Medicare Part C, are private insurance plans that provide for a Medicare beneficiary’s Part A and Part B benefits. Beneficiaries can choose to enroll in a MAP rather than traditional Medicare. There also are Medicare drug plans (Part D) that provide for a beneficiary’s prescription drugs. As of Jan. 17, 2023, more than 30 million Americans are enrolled in MAPs, according to data published by the Centers for Medicare and Medicaid Services (CMS). Moreover, there are nearly 4,000 MAPs available nationwide, which is nearly double the number of available plans in 2010.
MAPs and Part D plans have recovery rights for conditional payments under the Medicare Secondary Payer Act (MSP), 42 U.S.C. § 1395y(b)(3)(A). While case law across the country is scattered on what degree of recovery rights MAPs have for conditional payments, at the very least, MAPs surely have rights to recover the conditional payments they have made, like any other medical lien. Additionally, several jurisdictions across the country have determined that MAPs have the right to recover double damages for conditional payments under the MSP private cause of action if the primary insurance payer fails to reimburse the MAP.
Over the last decade—and even more so within the last five years—MAPs have increasingly litigated this issue by seeking to establish a firm right to double damages if the primary insurance plan fails to reimburse the MAP. Therefore, all parties settling with a Medicare beneficiary should take extra precautions during the settlement process with beneficiaries, especially if the beneficiary has been enrolled in a MAP during the lifetime of the claim. It is absolutely imperative to determine whether an injured party has received injury-related treatment paid for by a MAP when resolving a workers’ compensation, no-fault, or liability claim with a Medicare beneficiary.
As of Dec. 11, 2021, the Provide Accurate Information Directly (PAID) Act requires CMS to provide primary plans/responsible reporting entities (RREs) with the name, address, and plan number of all Medicare Part C and Medicare Part D plans that a Medicare beneficiary was enrolled in during the previous three years. The goal of the PAID Act is to provide increased transparency to primary plans, enhance/improve upon enrollment information provided to primary payers in the Medicare Section 111 reporting query process, and facilitate the ability for primary plans to resolve conditional payments with these private Medicare health plans pre-settlement.
One very important point to remember is that the PAID Act does not require primary insurance plans to utilize MAP data to resolve conditional payments. Additionally, CMS does not provide any requirements to the stakeholder community on the usage of PAID Act information, nor does it provide any documentation to the MAP community on how MAPs should handle recovery efforts. CMS maintains the position that MAP conditional payments and processes are outside of their purview, which is over traditional Medicare conditional payments.
It is critical for primary payers to have a process in place to address conditional payment notices (CPNs) received. Depending on the primary payer’s existing claims management program, processes for addressing CPNs can vary quite a bit. Primary payers should confirm that their claims administrator or insurer is equipped to address CPNs, as well as provide directions to the appropriate members of management when an employee receives a copy of a notification related to a claim. Ensuring that all Medicare-related notifications are addressed promptly and correctly is an important component of every primary workers’ compensation, general liability, and no-fault insurance claim.
Due to the increasing complexity of MSP compliance in all its facets—Section 111 reporting, MSAs, and conditional payment resolution—it is imperative to place great emphasis in this area of risk management and have best practices in place that are continually assessed and reevaluated. These best practices include, but are not limited to, having a well-defined, measurable program that addresses all aspects of Medicare compliance. When your organization has this, the interconnectivity of these components becomes readily apparent and allows for continual adjustment and refinement of benchmarks for your program.
Additionally, claims organizations should choose high-quality MSP vendor partners based on key performance indicators. Claims payers should request quarterly reports and measure and compare performance if there is more than one vendor. Regarding conditional payment services, consider a provider’s responsiveness, turnaround time, success at each level of appeal, and quality of documentation. It is critical that a vendor has legal staff to make appropriate arguments, especially at the administrative law judge level and beyond.
Lastly, data integrity in Medicare Section 111 reporting is critical to efficient and timely conditional payment resolution. Having clear and reinforced protocols for ICD-10 code determination and updating ongoing responsibility for medicals and total payment obligation to claimant sets the bar high for MSP compliance.
Further, claims payers should establish clear protocols internally based on jurisdiction for resolution of traditional Medicare, MAP plans, and Part D. Claims payers should be proactive, not reactive. Start the conditional payment resolution early in the settlement process and do not accept that “zero claims paid” letter regarding traditional Medicare means there are no other conditional payments. Claims payers and/or their MSP vendor should put MAP plans on notice early.
Working together with a plaintiff’s attorney, if necessary—especially in liability claims—is critical. This process should not be adversarial, as it benefits everyone but especially the beneficiary. Ensure that claims notes show a clear paper trail on conditional payment resolution efforts and by whom and ensure that you obtain copies of all correspondence from CMS. Don’t close your file until you have a copy of the final demand in it and documentation that the case is fully resolved.