By Barrye Miyagi
Partner, Taylor Porter
Practice Group Leader, Medicare Secondary Payer and MMSEA (Section 111) Compliance
The Provide Accurate Information Directly Act (H.R. 5881), the PAID Act, was recently introduced into Congress. If passed, certain parties will have the ability to determine if a plaintiff has Original Medicare, Medicare Part C, Medicare Part D, and/or Medicaid through a routine query with the Centers for Medicare & Medicaid Services (CMS). While the PAID Act is intended to benefit several interests, the Act also offers a solution to a problem faced by many litigators in personal injury cases.
Pursuant to the Medicare Secondary Payer Act (the MSP), Medicare has a direct right of action against a defendant who settles a case or is cast in judgment. Medicare also has a direct right of action against anyone who receives payment from that defendant such as the plaintiff and/or plaintiff’s counsel. The MSP requires that the parties determine if Medicare has a reimbursement right and, if so, Medicare must be reimbursed.
Medicare enrollees may elect to receive their Medicare benefits from private insurers, rather than the government. These private insurers are often referred to as Medicare Advantage Plans (MA Plans), Medicare Part C plans and/or Medicare Part D plans (Options for Medicare Coverage). These private insurers also have a right of reimbursement. Federal regulations provide that these insurers have the same reimbursement rights as Medicare as does the evolving case law in various jurisdictions.
Currently, certain entities may query the CMS to determine if a plaintiff is eligible for Medicare. However the query result only provides the plaintiff’s eligibility or lack thereof. Identifying Medicare Part C and Part D plans is often a challenge. Further, when parties are unable to determine if a plaintiff had such a plan there may be significant consequences. Most notably, the plan is not reimbursed. Assuming the plan paid plaintiff’s medical expenses related to the case, the parties are at risk of a claim by the plan. If the plan files suit to obtain reimbursement, the parties may face double damages and interest. Finally, when all of the plaintiff’s insurers are not identified, it is impossible for Medicare, Part C and Part D plans, Medicaid and any other insurers to properly coordinate benefits. (Fact Sheet for Attorneys on MSP Laws and Third Party Payers)
If the PAID Act is passed, the CMS query result will identify a plaintiff's Part C and Part D providers, as well as the state Medicaid program in which plaintiff may be enrolled. The PAID Act streamlines the process of obtaining information that is essential for MSP compliance.
The PAID Act is sponsored by U.S. Rep. Gus Bilirakis R-Fla. and U.S. Rep. Ron Kind D-Wisc. The bill is in the first stage of the legislative process. It must be passed by both the House and Senate and then be signed by the President to become law. “This legislation will ensure that beneficiaries, Medicare, and Medicaid have a clear and quick way to identify whether or not a participant has an MSP obligation, and provide information about how that obligation can be resolved. The PAID Act represents a ‘win-win-win’ for beneficiaries, plans, and the federal taxpayer,” said Congressman Bilirakis. (See the current version of the PAID Act, and track the progress of the Bill)
For advice on best practices for compliance with the MSP or how the PAID Act could affect your business, please contact Taylor Porter Partner Barrye Miyagi.
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