The PAID Act – New Law Requires CMS to Provide More Medicare Information

There is new law that may help insurers and self-insured employers comply with Medicare mandatory reporting requirements and complete settlement agreements. Congress passed the Provide Accurate Information Directly (PAID) Act on December 11, 2020, as part of the legislation that extended the government fiscal deadline. It becomes effective December 11, 2021.

The PAID Act requires the Centers for Medicare and Medicaid Service (CMS) to provide more information about Medicare beneficiaries in response to inquiries from Non-Group Health Plan (NGHP) Responsible Reporting Entities (RRE). This information may help identify whether a claimant to a worker’s compensation settlement is currently enrolled in Medicare, Medicare Advantage Plan (Part C), or the Medicare Prescriptions Drug Benefit plan (Part D), or if they received benefits under the various plans during the preceding three-year period. Having this expanded information should make it easier to identify Medicare’s potential conditional payment interests in worker’s compensation (and other liability and no-faulty insurance) settlements. Prior to the PAID Act, there is no reliable method to determine if a Medicare beneficiary was enrolled in Part C or Part D plans.

Here is a progression of recent Medicare Secondary Payer Act (MSP) amendments, which led to the recent legislation.
 

MMSEA

Congress amended the MSP by with the Medicare, Medicaid and SCHIP Extension Act (MMSEA) of 2007. Section 111 of MMSEA included mandatory insurer reporting requirements for insurers handling claims with Medicare beneficiaries. Under 42 U.S.C. § 1395y(b)(8)(G), providers for liability insurance, no-fault insurance and worker’s compensation are required to: 1) report settlements, judgments, and awards that resolve medical care issues with Medicare beneficiaries and 2) consider whether Medicare has an interest in the settlement. The intent of the 2007 legislation was to provide CMS with information about Medicare beneficiaries resolving certain insurance claims so that it could seek reimbursement for expenses it deemed were another entities’ responsibility (conditional payments). If there is an asserted conditional payment interest, CMS will pursue reimbursement from any of the parties.
 

SMART Act

In 2012, Congress passed the Strengthening Medicare and Repaying Taxpayers (SMART) Act to address the penalties provision of Section 111 MMSEA and the difficulties NGHP RRE’s encountered with the mandatory reporting requirements. The SMART Act required that Medicare supply final conditional payment reimbursement information and clarify penalty provisions. The SMART Act prompted CMS to hire two federal contractors to pursue recovery.
 

PAID Act

Currently, CMS only confirms whether an individual is enrolled in Medicare (the traditional plan) through the Section 111 query process. The Medicare Secondary Payer Recovery Portal (MSPRP) only contains conditional payments paid by traditional Medicare (not Medicare Advantage Part C or prescriptions Part D plans). Therefore, determining whether CMS asserts a conditional payment or whether the beneficiary is enrolled in other Medicare plans is a difficult task. Failing to identify all potential interests prior to finalizing a settlement with a Medicare beneficiary, can expose all of the parties to additional litigation and potential liability.

The PAID Act will require CMS to update the Section 111 query process so insurers can: 1) identify if the claimant is currently entitled to, or in the previous three years have been entitled to, Medicare and 2) which type of program or plan may assert an interest. Thus, there will be a central database for the parties to identify potential conditional payment assertions from various Medicare plans.
 

What Can You Do Now?

While CMS implements the IT specifications for Section 111 Reporting, there are a number of things insurers or self-insured employers can do now to prepare.
 

• Review Medicare compliance protocols.
  • In addition to determining whether the claimant is a Medicare beneficiary on the date of injury, you should ask what parts of Medicare the claimant is currently enrolled in and what parts of Medicare the claimant has been entitled to since the date of injury.
  • Ask about any other possible insurance the claimant may have had since the date of injury. 
  • Ask these questions at the start of the claim and during regular intervals.
• Verify an employee’s Medicare status prior to settlement negotiation. 
  • Inquire the questions above annually and as an employee approaches age 65 to determine any changes in the employee’s Medicare status during the course of the claim.   
  • Include questions about Medicare Advantage Parts C and D plans, not just traditional Medicare.
• If the employee is a Medicare beneficiary at the time of the settlement, the employee should determine whether there are any conditional payments asserted, from any of Medicare’s plans.
• The settlement agreement should be conditioned upon the parties resolving conditional payment requests. 
  • If there is a compensable worker’s compensation claim, with ongoing responsibility for medical care (ORM), the insurer may be able to conduct a query to identify conditional payments and resolve them. 
  • If the worker’s compensation claim is disputed, the burden is on the employee to identify and resolve conditional payment reimbursement interests.

For more information about the PAID Act or worker's compensation, contact Ann H. Stewart or another member of Ice Miller's Labor & Employment team.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.