In health policy, the minutia is not trivial; it’s essential.
Small incentives created by policymakers can have a significant impact upon how Medicare beneficiaries, doctors, hospitals and insurers respond to health care claims. But sometimes policies — even the most well-intentioned — can have unintended consequences, leading to wasted resources, burdensome regulations and broken promises to the very people that the system is designed to serve.
This is particularly true of the Medicare Secondary Payer and Medicaid Third-Party Liability statutes, complex policies within existing law that are intended to ensure that the government does not waste taxpayer money by reimbursing health care expenses for which another party is legally responsible. For example, if a Medicare or Medicaid beneficiary is in an accident requiring medical attention — imagine a 65-year-old who experiences a “slip-and-fall” incident at the local grocery store — the responsible party on the hook for the medical costs should pay before Medicare or Medicaid so that the responsible party pays, and the government doesn’t.
MSP policy is well-intentioned, but the unintended consequences are problematic. In the example of the grocery store accident, the grocer and its customer might want to settle the matter amicably by agreeing to an amount that adequately covers the costs associated with the injury. But today, because the MSP program is ambiguous and traditional Medicare does not provide visibility into enrollment data for plans such as Medicare Advantage, Part D or Medicaid, it leaves the grocer potentially liable for future claims (and significant penalties) from these programs if it accidentally paid for some of the customer’s medical care. As a result, the grocer can’t settle with the customer without putting himself or herself in significant financial jeopardy. Ultimately, in many cases, the grocer won’t settle, and the beneficiary may be unable to settle his/her claim and also may be denied necessary medical benefits.
This example isn’t unusual. In fact, stakeholders from across the spectrum agree that the current process by which the Centers for Medicare and Medicaid Services recaptures payment for claims from Part D, Medicare Advantage and Medicaid plans is broken. The byproduct of this scenario is that parties that may want to settle have no way to find out whether the beneficiary is enrolled in MA, Part D or Medicaid. Therefore, settling parties cannot coordinate benefits or repay what is owed.
Fortunately, a bipartisan bill sponsored by Reps. Gus Bilirakis (R-Fla.) and Ron Kind (D-Wis.) — H.R. 5881, the Provide Accurate Information Directly Act — fixes this mess by streamlining communication between parties. Specifically, the PAID Act would mandate that CMS informs settling parties at the time of settlement whether the beneficiary is enrolled in MA, Part D or Medicaid. It may not make headlines, but this piece of legislation can improve a part of the federal secondary payer system that creates countless unnecessary headaches and squanders hundreds of millions of dollars every year.
Political leaders in Washington continue to learn how complicated health care really is. As lawmakers try to navigate substantial legislative changes, they should also consider how targeted improvements can make a big difference. And in this instance, an incremental legislative victory would mean a big win for the Medicare beneficiaries and American taxpayers who want to eliminate unnecessary red tape.
Passage of the PAID Act will allow settling parties to repay MSP and TPL amounts and allow for the coordination of benefits by requiring CMS to share the information needed to fix this broken dynamic. Congress must work to achieve a more efficient solution for beneficiaries, taxpayers and employers by acting now to pass the PAID Act, and we applaud Bilirakis and Kind for their leadership.
Re Knack is chair of the Medicare Advocacy Recovery Coalition, and Heather Sanderson is the chief legal officer at Franco Signor LLC.
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