Sam Crepeau, Medicare Compliance Counsel, ISG
Katie A. Fox, EVP Medicare Compliance, ISG
In December 2020, the PAID Act was signed into law. As the most recent modification to the federal Medicare statute, the act requires CMS to provide Medicare Advantage (MA) Plan information when a claimant is queried for their Medicare beneficiary status. The purpose is to enable insurers to properly coordinate benefits with MA Plans. At the present, the query process only returns a result regarding a claimant’s Medicare Parts A & B status, which is of little help to primary insurers who want to meet their MSP obligations to reimburse MA plans and avoid unnecessary litigation.
Currently, Non Group Health Plans (NGHPs)s often do not know that an MA plan has made payments conditional on reimbursement, and often only find out when collection efforts are underway, including lawsuits alleging massive outstanding and unexpected conditional payments filed against them without notice. The last few years have seen an avalanche of MA plan conditional payments assigned to collection firms, weaponizing the private cause of action and double damages provisions of the Medicare Secondary Payer Act to entangle hundreds of insurers in collections litigation. The passage of the PAID Act raises several issues for insurers, self-insureds, as well as claims professionals.
First, the industry has just settled into the traditional Medicare conditional payment recovery process. Both claim organizations and vendors have identified best practices and spent considerable resources educating the front-line adjusters with respect to claim settlement and conditional payments. How will the PAID Act impact this process? Each Medicare Advantage plan has their own approach to recovering conditional payments. One of the most significant challenges is the sheer volume of entities to engage with – there are over 8,000 MA plans in operation. Traditional Medicare has focused on streamlining forms, electronic access as well as efficiency of dispute resolution. While MA plans have collected between various plans for years, the process for each plan is not uniform. Just when adjusters begin to feel comfortable with the two traditional Medicare recovery contractors, now they will have to engage with hundreds of additional plans, all with different approaches for conditional payment recovery. What will this varied engagement look like for your teams?
Claim System Modification
Next, we need to recognize the impact of receiving the identifying plan information in the Query Response File. Minimal changes have taken place over the years to this aspect of Medicare compliance. In the coming months we will see, as a result of the PAID Act, some modification to the Query Response File, and claim organizations will need to be prepared to process MA plan information. Remember, the NGHP world will now know about the MA plans before the MA plans are aware of the respective claims. Not only will claim professionals need to be prepared to coordinate benefits with the plans, their claim systems need to be able to digest the data received in the Query Response File. Organizations should be allocating resources to this enhancement now to respond to the coming changes.
No Required Notice
Finally, it is critical to understand that there is no requirement for an MA plan to notify a primary insurer before collection efforts takes place. As mentioned above, NGHPs/primary insurers are often learning for the first time they possibly owe a conditional payment to an MA plan when they’re served with the lawsuit. To be able to defend against these abusive collection tactics and possible judgments double the amount of the conditional payment, RREs need to identify a holistic approach to MA plan Conditional Payment management. While MA plans have possessed recovery rights for years, some MA plans have simply chose not to pursue recovery, and NGHPs/primary insurers have had a difficult time identifying these plans, resulting in much less collection activity compared to traditional Medicare recovery. Now that information obstacle has been removed, we should expect to see Conditional Payment Management efforts to double. With the implementation of the PAID Act, we can all agree that claim professional’s jobs resolving MA plan recoveries will be more manageable, and will not see their work tied up in litigation. Claim organizations need to be prepared to pivot their approach to MA conditional payments to achieve the benefits of early identification that the PAID Act provides.
ISG’s partnered approach allows for identification of risk tolerance while building solutions to respond to the changing landscape. Interested in how ISG can assist? MSP@ISGvalue.com.
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