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CMS Issues a Technical Alert on the PAID Act

  • Class Action & Mass Tort
  • 2 Mins

On December 11, 2020, the Provide Accurate Information Directly (PAID) Act was signed into law by then-President Trump, with the express intent to assist settling parties to identify whether settling claimants to personal injury lawsuits are also Medicare Advantage (Part C) or Prescription Drug Plans (Part D) beneficiaries, triggering the need for reimbursement under federal law.  The PAID Act:

  1. Requires CMS/Medicare provide insurers and self-insureds with a Medicare beneficiary’s information for the previous 3 years (from date of reporting under Section 111 of the MMSEA).

  2. Requires CMS to set up the data exchange process by December 11, 2021.

On June 8, 2021, CMS issued a technical advisory [CMS PAID ACT Alert] clarifying how it intended to meet these statutory requirements.  As we expected, CMS is going to use the existing Medicare Query platform that insurers and self-insureds currently use to determine whether an individual is enrolled in Medicare Parts A and B, to also provide information about Medicare Parts C and D.  As part of the Query Response file, the information will include:

  1. Contract Number,

  2. Contract Name,

  3. Plan Benefit Package Number,

  4. Plan address, and

  5. Effective dates for the prior 3 years (with up to 12 instances for each of Medicare Parts C and D).

Finally, CMS is providing a testing period starting on September 13, 2021, which is a clear indication it wants to hit the December 11, 2021 mark.

For settling parties, this means that the argument that Medicare Part C and D entities cannot be located largely will go away. Instead, in many instances it is likely that defense counsel will have information about plaintiffs that plaintiffs’ counsel may not. It will be critical then for settling parties, whether as part of a mass tort or individual case to build into their settlement design a process to care for verifying, resolving, and repaying Medicare Parts C and D, just as settling parties have done for Medicare Parts A and B over the past decade plus. In particular, the parties will need to pay extra attention to the settlement release or Master Settlement Agreement language concerning when and how Medicare Parts C and D obligations are to be resolved.  

Finally, it is important to note that the PAID Act does not appear to cover Medicare Supplement Plans, which if involved in a settlement, will need to be resolved in a more traditional manner.

Here at Epiq, we will continue to monitor developments to ensure that Medicare repayment does not become a problem after the fact (of settlement). Additionally, CMS plans to hold a PAID Act Webinar on June 23, 2021, which will provide further clarity. Details here.

To learn more contact Patti Scamardo,

The contents of this article are intended to convey general information only and not to provide legal advice or opinions.

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