Preparing for When the PAID Act Takes Effect in December 2021

The PAID Act recently became law. The act paves the way for Non-Group Health Plan (NGHP) Responsible Reporting Entities (RREs) to receive valuable Medicare Part C and Part D plan information for the injured parties they submit through the Centers for Medicare and Medicaid Services’ (CMS’) Section 111 query process. Now that we are only ten short months away from implementation, many are asking: what are the practical implications of this change, and what should we do to prepare for December 2021?

What does the PAID Act do?

Under the PAID Act, if the claimant is a Medicare Advantage and/or Part D beneficiary (or was one or during the preceding 3-year period), then CMS must provide the applicable plan with the names and addresses of any such Medicare plans through the Section 111 Query.

More specifically, the text of the PAID Act states that CMS must provide the following information to the applicable plan through the Section 111 Query Process:
(I) whether a claimant subject to the query is, or during the preceding 3-year period has been, entitled to benefits under the program under this title on any basis; and (II) to the extent applicable, the plan name and address of any Medicare Advantage plan under part C and any prescription drug plan under part D in which the claimant is enrolled or has been enrolled during such period.

To put this into perspective, currently, when an applicable plan submits the required Query Process data elements to CMS, if the queried individual is identified as a Medicare beneficiary, the Query response only confirms that he/she is enrolled in Medicare. It does not provide any information as to the “type” of Medicare program in which he/she is enrolled.

The PAID Act will change this. Under the PAID Act, if the individual is identified as a Medicare beneficiary and is currently entitled to, or during the preceding three-year (3) period has been entitled to, Medicare Advantage and/or Part D benefits, CMS will now have to provide the applicable plan with the names and addresses of any such Medicare plan. Accordingly, applicable plans will now better identify whether a claimant is a Medicare Advantage and/or Part D plan enrollee.

What is the objective of the PAID Act?
The PAID Act was prompted in response to a wave of recent lawsuits filed by Medicare Advantage Plans (or suits filed on their behalf by assignee entities) asserting recovery rights against insurers, including claims for “double damages” under Medicare’s private cause of action provision.

As such, a major objective of the PAID Act is to provide insurers with the ability, as referenced above, to identify whether a claimant is (or was) a Medicare Advantage and/or Medicare Part D (prescription drug) plan beneficiary and to obtain the names and addresses of any such Medicare plans. Proponents of the PAID Act assert, in part, that this legislation will now help insurers better identify and address potential Part C and/or Part D recovery claims by allowing them to obtain entitlement and plan information in a more programmatic manner using Section 111’s Query Process. Currently, there is no such centralized process or system for insurers to obtain this information. The PAID Act changes this.  

What happens next?
With the PAID Act now law, the focus has shifted to how and when CMS will implement its PAID Act’s provisions. The industry will need to see exactly how CMS plans to address the technical aspects necessary to expand its Query Process and whatever related instructions and guidance it may issue regarding this change. It is unknown at this point whether CMS will release an implementation proposal to include a comment period, issue written policy directives, and/or hold informational webinars.

Providing this information is a step forward in promoting transparency and allows RREs to initiate contact with the applicable plans, notifying them of the RRE’s status as primary payer. Nevertheless, we do not expect this change to impact existing Mandatory Insurer Reporting requirements.

Preparing for the PAID Act
Review and assess your current workflow for evaluating conditional payments with Medicare Advantage and Part D plans.

Evaluate your data management – does your claims system contain data fields to house multiple Part C and Part D plan names and addresses? This information will be returned for any plan in which the beneficiary was enrolled over the previous three years.  Keep in mind that plans can change annually.
 
Click HERE to get the basics on Medicare and learn more about the PAID Act.
 
Bob Michaels is extremely passionate about providing the best possible legal experience for his clients, and focuses his practice on elder law, estate planning, business, and real estate matters. Bob has been able to provide piece of mind and a solid foundation to many folks in the Puget Sound area over the years and wants to provide resources and relevant information whenever he can. Contact Bob for a consultation.