Bradley J. Frigon on the Applicability of Medicare Secondary Payment Subrogation Rights to Medicare Part C and Part D Private Carriers

By Bradley J. Frigon

Following several cases that challenged federal regulations, CMS published a memorandum to all Medicare Advantage Organizations and Prescription Drug Plan Sponsors regarding Medicare Secondary Payment Subrogation Rights for Part C and Part D private carriers seeking reimbursement for payments made for services in which Medicare is a secondary payer. In this commentary, Bradley J. Frigon, a member of the National Academy of Elder Law Attorneys, writes:

“It appears that Medicare Advantage Organizations (MAOs) and Prescription Drug Plans (PDPs), Medicare Part C and Part D private carriers, also come into the fold as entities that parties will have to deal with regarding Medicare secondary payment subrogation rights as these private carriers begin seeking reimbursement for payments made for services in which Medicare is a secondary payer.

“On December 5, 2011, CMS published a memorandum to all Medicare Advantage Organizations and Prescription Drug Plan Sponsors regarding Medicare Secondary Payment Subrogation Rights for Part C and Part D private carriers seeking reimbursement for payments made for services in which Medicare is a secondary payer.

“The memorandum summarizes CMS's regulations giving MAOs and PDPs the right, under existing federal law, to collect for services for which Medicare is not the primary payer. The memorandum mentions recent decisions where several courts have challenged federal regulations governing these collections. Specifically, the memo mentions that several MAOs have not been able to take private action to collect for Medicare Secondary Payer services under federal law because they have been limited to seeking remedy in state court. CMS's memorandum also indicates that these same regulations established in 42 C.F.R. § 411 supersede any state laws. Additionally, the MSP regulations at 42 C.F.R. § 422.108 are extended to Prescription Drug Plan (PDP) sponsors at 42 C.F.R. § 423.462. Accordingly, PDP sponsors have the same MSP rights and responsibilities as MAOs.

“The memorandum makes it clear that CMS's regulations at 42 C.F.R. § 422.108 describe MSP procedures for MAOs to follow when billing for covered Medicare services for which Medicare is not the primary payer. According to the memo, these regulations also assign the right (and responsibility) to collect for these services to MAOs. Specifically, § 422.108(f) indicates that MAOs will exercise the same rights of recovery that the Secretary of Health and Human Services (HHS) exercises under the original Medicare MSP regulations in subparts B through D of 42 C.F.R. § 411.”
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