The last half-dozen years have seen Medicare Secondary Payer (MSP) compliance evolve, with the most recent example being its change in focus from mandatory insurer reporting to rolling recovery. But one of the most impactful changes involves Medicare Advantage Organizations (MAOs). Ten years ago, most practitioners didn’t even worry about them, but now insurers in some regions are more concerned about Medicare Advantage enrollees than Medicare beneficiaries without these plans.
How did we get here?
Medicare Advantage has been important in MSP compliance since the seminal case In re Avandia was decided in 2012. That decision basically placed MAOs on the same footing as the federal government, allowing them to sue insurers in federal court to recover payments that the MAO made related to the underlying workers' compensation, no-fault, or liability claim. Whether they truly are conditional payments is a matter of academic debate. But over the last four years, MAOs have effectively consolidated the Avandia decision—with the latest decision coming out of the 11th Circuit in Humana v. Western Heritage in August 2016. For a strong summary of the case law in this area, go here, here, and here.
So what do we do about it?
With all the debate about Medicare Advantage, we thought it was important to provide a clear, action-oriented approach to nail down this issue and avoid roadblocks to settlement.
Here are some concrete steps to consider when dealing with a claimant who is also a Medicare Advantage enrollee:
- Knowledge is power. Seems simple enough: You need to know whether the injured party is enrolled in an MAO. According to the Kaiser Family Foundation, approximately 17.6 million people are enrolled in MAOs. Since 2008, the number of Medicare Advantage enrollees has nearly doubled, and it now stands that 31 percent of all Medicare beneficiaries are enrolled in a Medicare Advantage Plan. Did you also know that state-by-state the percentage of Medicare beneficiaries can vary widely? In some states, such as Florida, Hawaii, Minnesota, and Oregon, enrollment in Medicare Advantage hovers at nearly 50 percent of all beneficiaries. In other states, such as New Hampshire, Vermont, Delaware, and Wyoming, enrollment is less than 10 percent of all Medicare beneficiaries. Regardless of state or jurisdiction, the best plan of attack is to ensure that claims handlers, attorneys, and anyone involved in the management of the claim understands the importance of identifying the Medicare Advantage enrollees in your claims book. The key point: Nationwide, roughly one in three Medicare beneficiaries is a Medicare Advantage enrollee, and depending on the state, there’s an even higher incidence of Medicare Advantage enrollment.
- You have a Medicare Advantage enrollee, now what? When you identify a Medicare Advantage enrollee, the real work begins. First, unlike traditional Medicare, MAOs do not perform conditional payment recovery in a centralized and predictable way. The problem here is that you can’t simply call or write to Medicare’s conditional payment contractors, obtain the amount, and pay the demand. Instead, you need to identify the plan(s) that the individual has enrolled in since the injury; assess the likelihood that those plans have made payment that could be attributable to the accident; and develop a strategy to resolve the issue during the settlement process. The key point: Regardless of your state or venue, you need to be prepared to deal with an MAO if it stands between you and settlement.
- Executing your game plan. Forward-thinking insurers are incorporating Medicare Advantage into their claims-handling protocols. In certain respects, Medicare Advantage compliance looks a lot like standard conditional payment compliance: Spot the issue, identify any alleged payments, dispute, and coordinate resolution. The fundamentals are very similar, but there are some advantages and disadvantages to dealing with a MAP (as described in the next step).
- Putting it all together—what to watch for. Dealing with an MAO can run the gamut from easy and straightforward to complex and fraught with peril. Here are some things to consider: MAOs may not see themselves as bound by the same rules as Medicare. This can work in your favor when an MA Plan will accept your offer of ten cents on the dollar to resolve the outstanding balance. But it can work against you when the MA plan hassles you for something that the Medicare contractors won’t (or can’t) demand. More often than not, MA Plans like to have their cake and eat it too. What’s more, MAOs are not monolithic. There are multiple insurers offering a number of plans in every state, and often the most challenging prospect is simply identifying the appropriate party to contact.
- Where your case is litigated still matters. There are six states where U.S. courts of appeal have placed MAOs on the same plain as original Medicare: Pennsylvania, Delaware, New Jersey, Georgia, Alabama, and Florida. If you’re in those six states, you absolutely need to deal with the Medicare Advantage issue head-on. Even if you’re not in one of those states, you don’t want to wind up as the next test case, do you?
When the dust settles, Medicare Advantage issues can be challenging, but the fundamental approach to dealing with them shouldn’t vary greatly from traditional conditional payments. You need to identify the issue, aggressively move to mitigate your risk, communicate effectively with all parties, and promptly resolve the claim.
ISO Claims Partners has developed custom MSP compliance programs specifically to address dealing with MAOs and mitigating exposure in this critical area.