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How the New PAID Act Will Dramatically Improve Medicare Secondary Payer Act Compliance Melisa C. Zwilling Carr Allison
On December 11, 2020, President Trump signed the Provide Accurate Information Directly Act (PAID Act) into law. The PAID Act will significantly impact how companies are able to handle and resolve Medicare Advantage Plan (MAP) and Prescription Drug Plan (PDP) claims in accordance with the Medicare Secondary Payer Act (MSPA). After years of frustrated attempts at compliance amidst the looming threat of class action lawsuits, the PAID Act is a very welcome and much-needed development. THE MOVING PARTS OF MEDICARE SECONDARY PAYER COMPLIANCE The MSPA provides that Medicare may not be called upon to pay medical expenses
for a Medicare beneficiary if another entity, known as a primary payer, exists and should pay for the same. Primary plans include workers’ compensation, no-fault and liability insurers as well as self-insureds. Medicare Secondary Payer (MSP) compliance for such entities essentially fits into four categories: future medical expenses, Section 111 Reporting, Medicare conditional payment claims, and MAP and PDP claims. Each category should be considered and addressed in cases involving Medicare beneficiaries. When settling a case with a Medicare beneficiary, arrangements for the payment for future medical expenses likely to be incurred should be discussed in settlement negotiations and explained clearly in doc-
uments. Whether through a more formal set-aside or simple designation of settlement funds for future medical payments, adequate consideration should be given to how such expenses will be paid to ensure that the burden of payment will not be shifted to Medicare. In addition, Section 111 Mandatory Medicare Reporting rules require certain primary payers, known as Responsible Reporting Entities (RREs), to electronically report information to Medicare when a settlement, judgment, award or other payment is made to a beneficiary. This helps Medicare more easily identify entities from whom it may recover conditional payments and deny additional payment of medical expenses for which another entity is responsible.