When a beneficiary is injured and another party is supposed to cover healthcare expenses — such as in a workers compensation claim — Medicare’s legal responsibility to pay becomes secondary.

Due to a lack of oversight to identify exactly what secondary party is responsible for payment under the Medicare Secondary Payer policy in Medicare Part D, a bipartisan bill by Rep. Tim Murphy (R-Pa.) and Ron Kind (D-Wi.) has been introduced to ensure that the Medicare program and prescription drug plans do not reimburse healthcare expenses that another entity is legally responsible to pay.

Titled the Secondary Payer Advancement, Rationalization, and Clarification Act — or SPARC Act — this measure is expected to provide a clear framework for communication among all stakeholders involved. This is one reason why the Medicare Advocacy Recovery Coalition (MARC), representing virtually every sector of the MSP regulated community including attorneys, brokers, insureds, insurers, trade associations, self-insureds and third-party administrators, has chosen to put its full support behind the bill.

Bloomberg/file photo

“The SPARC Act will create a clear and functional MSP system for Part D drugs, benefitting Medicare beneficiaries and Part D Drug Plans alike,” says Greg McKenna, chair of the MARC Coalition and senior vice president for external affairs of Gallagher Bassett Services Inc, a claims service provider. “Today’s complicated regulatory atmosphere leads to inappropriate coverage denials for beneficiaries. [They also lead to] costly but mandatory pursuit of miniscule recoveries, and a paralyzing uncertainty for parties to medical liability settlements.”

Also see: Brokers must embrace reinvention

To assist in shaping the SPARC Act, MARC has also offered parameters for fixing the MSP problem in Part D with four principles for reform:

  • Access to care: Beneficiary access to timely and appropriate care must be protected.
  • Fairness: The process by which PDPs reclaim what it is owed must be fair and transparent to everyone affected by medical liability settlements — employers, insurers, healthcare providers and beneficiaries.
  • Certainty and simplicity: PDP claims for reimbursement from third parties must be finalized within a reasonable time.
  • Fiscal responsibility: Taxpayers deserve a CMS process for adjudicating these claims that is efficient and eliminates unnecessary waste in the Medicare system.

“MARC applauds Congressman Murphy and Kind for introducing the SPARC Act,” says Margie O’Connor-Fitzpatrick, vice-chair of MARC and senior technical administrator of MetLife Auto and Home. “Following their leadership in 2012 when they sponsored the SMART Act and guided it through to enactment, we are delighted that these two members of Congress are leading the effort again.”

The Strengthening Medicare and Repaying Taxpayers, or SMART Act, of 2011 mandated a conditional payment process, a low dollar threshold, MMSEA penalties, eliminated use of Social Security Numbers and Medicare Numbers in the MSP process; and a statute of limitations implemented over three years, from the date of reporting under the MMSEA, for Medicare to file suit for recovery under the MSP.

To ensure MARC’s principles can be followed through with, the coalition included four provisions to solidify their goals, with the final provision utilizing the mandates implemented in the SMART Act.

Permitting PDPs to secure a clear recovery right from settling parties to recover past payments for prescription drugs covered by a later settlement, saving PDPs and the government significant funds by allowing greater recoveries faster.

Restoring sense to the program by allowing plans to waive secondary payer provisions if costs of recovery exceed the amount to be recovered.

Require CMS within 15 days of receipt to pass settlement information to PDPs to timely coordinate benefits, and require drug plans to instruct pharmacies to bill entities that have accepted an ongoing responsibility to pay for medical benefits, thus avoiding plans paying for drugs when others are responsible.

Finally, leveraging the SMART Act expedited repayment procedures, involves plans in the expedited repayment process, bringing finality to all involved in settling claims with beneficiaries.

At presstime, the measure is awaiting discussion and a vote in the House Subcommittee on Health.

Register or login for access to this item and much more

All Employee Benefit Adviser content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access