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The PAID Act and Its Impact on Medicare Secondary Payer Reporting

December 22, 2020
December 22, 2020
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The Provide Accurate Information Directly ("PAID") Act was signed into law on December 11, 2020, as part of H.R. 8900, which extended the government's fiscal deadlines. Title III of the PAID Act requires the Centers for Medicare & Medicaid Services (CMS) to increase its process in identifying whether a claimant is currently entitled to, or during the preceding 3-year period has been entitled to, Medicare Part C and/or Medicare Part D.

Under 42 U.S.C. §1395y(b)(8)(G), providers for liability insurance, no-fault insurance, and workers' compensation are required to report settlements, judgments, awards, or other payment from liability insurers received by, or on behalf of, Medicare beneficiaries. The Section 111 Query Process[1] has been expanded by the Act and CMS is required to provide the names and addresses of any Medicare plans that a claimant is entitled to, within the Act’s newly established time frame.

Previously, when a Section 111 Query was made, CMS would only confirm if the claimant was enrolled in Medicare. It did not provide any information regarding the type of Medicare program. Under the PAID Act, insurers can identify if the claimant is currently entitled to, or in the previous three years have been entitled to, Medicare and if the program is a Medicare Advantage Plan or Part D prescription program. This will allow insurers to properly identify applicable plans and issue primary payment or reimbursement of qualifying payments.

The Act was created as a result of lawsuits filed by Medicare Advantage Plans asserting recovery rights against insurers for double recovery, for failure to provide primary payment or reimbursement for qualifying charges.[2] The PAID Act will allow insurers to better identify the claimant’s Medicare plans and avoid unnecessary litigation.

CMS must implement the PAID Act by December 11, 2021. We will monitor CMS’s actions to determine how it will implement the Act, as there is currently no centralized system for insurers to conduct a Section 111 Query. We expect that over the next year CMS will implement a mechanism to comply with the PAID Act.

[1] Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) added mandatory reporting requirements with respect to Medicare beneficiaries who have coverage under group health plan (GHP) arrangements as well as for Medicare beneficiaries who receive settlements, judgments, awards, or other payment from liability insurance (including self-insurance), no-fault insurance, or workers’ compensation.

[2] See 42 U.S.C. 1395y(b)(3)(A).