This week marks two months since the PAID Act became law. The act paves the way for Non-Group Health Plan (NGHP) Responsible Reporting Entities (RREs) to receive valuable Medicare Part C and Part D plan information for the injured parties they submit through the Centers for Medicare and Medicaid Services’ (CMS’) Section 111 query process. Now that we are only ten short months away from implementation, many are asking: what are the practical implications of this change, and what should we do to prepare for December 2021?

The Section 111 Query Process Today

As it exists today, the Section 111 query process is limited to identifying whether an injured party has been assigned a Medicare ID (either a Medicare Beneficiary Identifier (MBI), or previously, a Health Insurance Claim Number (HICN)), which is an indicator that they were, are, or soon will be, a Medicare beneficiary.

If the injured party is matched to a Medicare ID number, this triggers the RRE to report through Section 111. The RRE notifies CMS of their secondary payer status if the RRE has accepted ongoing responsibility for medicals (ORM) and/or if there has been a settlement, judgement, award or other payment (also known as a Total Payment Obligation to Claimant (TPOC)) where medicals have been claimed or released.

Data reported through the Section 111 process is then used by CMS contractors to coordinate benefit activities for traditional Medicare Part A and Part B. In other words, they use this information to initiate recovery of conditional payments, and/or deny payment for injury-related treatment billed to Medicare.

Noticeably absent from the process are Medicare Advantage (Part C) and Prescription Drug Plans (Part D). To date, an RRE’s only avenue for obtaining information related to Medicare Advantage or Prescription Drug Plans has been to ask the injured party directly. The process is important but arguably tedious, inherently fraught with errors, and for those reasons is potentially overlooked.

Impact on Section 111 Query Process

Beginning in December 2021,  as a result of the PAID Act provisions being enacted, RREs will be able to turn to CMS as a reliable source for Medicare Part C and Part D plan information through a familiar method – the Section 111 Query Response File. CMS will provide RREs with company names and addresses of Part C and Part D plans in which the queried individual has been enrolled within the past three years.

Providing this information is a step forward in promoting transparency and allows RREs to initiate contact with the applicable plans, notifying them of the RRE’s status as primary payer. Nevertheless, we do not expect this change to impact existing Mandatory Insurer Reporting requirements.

How Can Your Recovery Agent Help?

Recovery Agents can assist in negotiating with Medicare Advantage and Prescription Drug Plans. However, it is important to remember that a Recovery Agent assigned to an RRE via Section 111 will only receive copies of conditional payment correspondence related to traditional Medicare, Parts A and B. This is due to the fact that Part C and D recovery claims are made by private insurance companies that sponsor Medicare Advantage and Prescription Drug plans and do not operate through the government recovery contractors. Therefore, a Recovery Agent will not be automatically copied. Any Part C or D related recovery information or correspondence must be forwarded to the Recovery Agent by the RRE.  

Preparing for the PAID Act

  1. Review and assess your current workflow for evaluating conditional payments with Medicare Advantage and Part D plans.
  2. Remember that your Recovery Agent only receives copies of correspondence related to Medicare Part A and Part B. Establish a process for engaging your Recovery Agent to assist with Part C and Part D notifications and recovery claims.
  3. Evaluate your data management – does your claims system contain data fields to house multiple Part C and Part D plan names and addresses? This information will be returned for any plan in which the beneficiary was enrolled over the previous three years.  Keep in mind that plans can change annually.
  4. Stay informed – MEDVAL is monitoring the CMS website dedicated to Non-Group Health Plan (NGHP) Mandatory Insurer Reporting for important technical alerts, webinar announcements and NGHP User Guide updates, which provide official instruction surrounding any changes that need to be implemented as of December 2021. We will continue to keep you updated by reporting important changes on our blog.

If you have any questions about the PAID Act or the Section 111 reporting process, or if you would like a copy of our Medicare Advantage Organization Tip Sheet, please contact us.