• Paid Act Would Provide Clarity on Medicare Secondary Payer and Medicaid Reimbursement Obligations
  • June 29, 2018 | Author: Barrye Panepinto Miyagi
  • Law Firm: Taylor, Porter, Brooks & Phillips, L.L.P. - Baton Rouge Office
  • The Provide Accurate Information Directly Act (H.R. 5881), the PAID Act, was recently introduced into Congress. If passed, certain parties will be able to quickly determine if a plaintiff has Original Medicare, Medicare Part C, Medicare Part D and/or Medicaid. 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) 42 USC Sect 1395 (y) (b)(2)(A), Medicare has a direct right of action against the 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. (What’s Medicare and all its Parts?)

    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. These private insurers also have a right of reimbursement. In fact, the evolving case law and federal regulations provide that these insurers have the same reimbursement rights as Medicare. Accordingly, the parties must determine if a plaintiff has such a plan, and that plan must be reimbursed from any settlement or judgment.

    Currently, certain entities may query the Centers for Medicare & Medicaid Services (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 time-consuming endeavor. 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. (Fact Sheet for Attorneys on MSP Laws and Third Party Payers) 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, the Part C and Part D plans, Medicaid and any other insurers to properly coordinate benefits.

    If the PAID Act is passed, the CMS query result will indicate if a plaintiff has Medicare Part C, Medicare Part D and Medicaid, and the Part C and Part D providers will be identified. The PAID Act provides a simple solution to an existing gap in the ability of parties to obtain information that is necessary to comply with the MSP.

    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. (Track the progress of the PAID Act)