CMS Enhances MA Plans’ Right To Collect When Medicare Is Secondary
Coordination Of Benefits January 2012 Vol. 20 No. 1
Medicare Advantage (MA) and Prescription Drug Plan (PDP) sponsors should have the same leverage as Medicare’s own carriers and fiscal intermediaries when collecting for Medicare Secondary Payer (MSP) overpayments, the Centers for Medicare & Medicaid Services (CMS) said in a recent memo. CMS’ clarification comes soon after two federal courts said MA plans weren’t allowed to recover proceeds under the MSP Act, which authorizes double damages (see the October 2011 newsletter). Without authority under the MSP Act, some private-payer entities that administer MA and PDP benefits would have to seek collections in state courts. CMS Enhances MA Plans’ Right To Collect When Medicare Is Secondary
In our October 2011 Newsletter, we reported on two decisions by U.S. District Courts holding that Medicare
Advantage Organizations (MAOs) from recovering the benefits provided to Medicare beneficiaries from tort settlement or judgment proceeds. Those cases are Avandia Marketing, Sales Practices and Product Liability Litigation, 2011 WL 2413499 (E.D. Pa., June 13, 2011) and Parra v. Pacificare of Arizona, Inc., 2011 WL 1119761 (D. Ariz., Feb. 4, 2011).
On Dec. 5, 2011, the Centers for Medicare & Medicaid Services (CMS) issued a memorandum to MAOs and Prescription Drug Plan (PDP) sponsors indicating support for CMS regulations giving them the right and responsibility to collect for services for Medicare Secondary Payer (MSP) services. The memorandum reads:
The purpose of this memorandum is to summarize and convey our support for our regulations giving Medicare Advantage Organizations (MAOs) and Prescription Drug Plan (PDP) sponsors the right, under existing Federal law, to collect for services for which Medicare is not the primary payer. In recent decisions, several courts have challenged Federal regulations governing these collections. Specifically, several MAOs have not been able to take private action to collect for Medicare Secondary Payment (MSP) services under Federal law because they have been limited to seeking remedy in State court.
CMS regulations at 42 C.F.R. §422.108 describe MSP procedures for MAOs to follow when billing for covered
Medicare services for which Medicare is not the primary payer. These regulations also assign the right (and responsibility) to collect for these services to MAOs. Specifically, §422.108(f) stipulates that MAOs will exercise the same rights of recovery that the Secretary exercises under the Original Medicare MSP regulations in subparts B through D of part 411 of 42 C.F.R. and the rules established in this section supersede any State laws. Additionally the MSP regulations at 42 C.F.R. §422.108 are extended to Prescription Drug Plan (PDP) sponsors at 42 C.F.R. §423.462. Accordingly, PDP sponsors have the same MSP rights and responsibilities as MAOs.
Notwithstanding these recent court decisions, CMS maintains that the existing MSP regulations are legally valid and an integral part of the Medicare Part C and D programs.
Implications
This memorandum does not address the issues raised by the courts in the Avandia and Parra cases. However, those cases have been appealed. Perhaps the CMS memorandum will help the appeals courts find their way through what the Contributing Editor has described as a “Modern Byzantine Labyrinth” of Medicare regulations.
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