Secondary Payer Advancement, Rationalization, and Clarification (SPARC) Act – H.R. 1122
Fixing the Part D Program’s Secondary Payer Policy
Bipartisan, Non-Controversial, Common Sense Reform that Benefit’s Everyone
When a Medicare beneficiary is injured and another entity is required to pay for their healthcare expenses – such as in a tort case, workers compensation claim, or auto insurance payment – Congress has long recognized that Medicare’s responsibility to pay is “secondary.” This well-established Medicare Secondary Payer (MSP) policy is designed to ensure that the Medicare program and Part D prescription drug plans (PDPs) do not waste taxpayer dollars by reimbursing healthcare expenses for which another entity is legally responsible. Today, however, literally every stakeholder agrees that the process by which CMS and PDPs recapture payment for claims that were not its responsibility to pay is broken. Specifically, today’s unwieldy regulatory scheme leads to inappropriate coverage denials for beneficiaries, costly, but mandatory pursuit of miniscule recoveries, and a paralyzing uncertainty for parties to medical liability settlements.
To fix the MSP problem in Part D, Congress should craft a remedy that follows these four principles:
- 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 above all, 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.
THE SPARC ACT:
To achieve a more efficient solution for beneficiaries, taxpayers, and employers, Congress should pass the bipartisan Secondary Payer Advancement, Rationalization and Clarification Act (SPARC) Act, HR 1122, sponsored by Congressmen Tim Murphy (R-PA) and Ron Kind (D-WI), which achieves the four principles via the following key provisions:
- Limits Medicare Plans’ claims to only those where the potential recovery might exceed the cost of collection.
- Requires CMS to provide Plans with timely access to settlement data, so that they can speedily assert any claims for recovery at the time of settlement.
- Directs Medicare Plans to instruct pharmacies to bill liable third parties as a means of avoiding inappropriate billing of Medicare Plans in the first place.