New law clears air on Medicare reimbursements for comp insurers

Insurers settling workers compensation claims for older workers enrolled in certain Medicare plans will see fewer surprises as a new law will give them a clearer picture of expenses they may have to reimburse, experts say.

By law, comp insurers must reimburse Medicare any expenses the federal health program covered that should have been part of an injured worker’s claim. Prior to the Provide Accurate Information Directly Act, which President Donald Trump signed into law on Dec. 11, comp insurers had to rely on the claimants themselves to disclose whether they were enrolled in the federal plans.

As a result, health insurers providing Medicare Advantage or prescription Part D coverage were filing for reimbursements after the claims closed — and comp insurers had no way to know how much they would have to reimburse.

The problem led to lawsuits, according to experts who say the new law — dubbed the PAID Act — simplifies the process, as the Centers for Medicare and Medicaid Services must disclose enrollee information to comp and liability insurers.

“This is a big win for insurance companies,” said Shawn Deane, Burlington, Massachusetts-based general counsel for Ametros Financial Corp. “There were lawsuits out of nowhere against insurance carriers, and they had no real ability to even determine whether a claimant had these benefits. This allows them to work out these coverage issues prior to a lien or a lawsuit months or even years after the fact.”

Dan Anders, Chicago-based chief compliance officer for Tower MSA Partners LLC, which works with insurers on Medicare secondary payer compliance issues, said privacy laws previously prevented Medicare from sharing the information with insurers.

When preparing to settle a comp claim “everybody thinks we are hunky-dory, and they go and settle the case and a few months later (Medicare) Advantage comes in and sends in a reimbursement claim,” said Mr. Anders, who applauded the change. “This gives (insurers) better information that when the case is settled there won’t be any surprises. … They can investigate any claims for reimbursement and make sure that is resolved, so there are no issues months, years down the road.”

Deborah Watkins, CEO of Sarasota, Florida-based Care Bridge International Inc., an insurtech company that helps insurers calculate Medicare compliance costs, said, “In the current [Medicare] portals, to access eligibility information there hasn’t been a way to find out what monies are owed without involving the claimant or the attorney or getting people to request the information, and it takes months,” she said.

The PAID Act gives Medicare one year to update its information technology portals.

Whether the change will save insurers money is unclear — PAID Act supporters long argued that the change would save federal Medicare money.

Insurers will likely avoid litigation costs and costs associated with reopening claims, but that means companies may have to pay more upfront to close claims, Mr. Anders said.

“If anything, they may end up paying out more money because now they are going to have a better picture of Medicare plans that are out there,” he said.