OPINION:
The Medicare program was signed into law nearly 60 years ago to provide health coverage (and with it, increased financial security) to tens of millions of older Americans. But as the babies are born and then approach retirement age themselves, the program that served their parents and grandparents is itself in crisis.
The entire baby boomer generation — the largest generation of American workers in history — will be 65 years or older in 2030, two years after the Medicare board of trustees projected the fund will be depleted. Washington has known about this problem for what seems like forever, and each year that we creep closer to doomsday, a speech or think tank paper offers new ideas to fix it. This year, President Biden brought it up in his State of the Union address, pledging to extend the fund for at least two decades.
New ideas are great, but most proposed fixes ignore the fact that one way to manage (and maybe even solve) the problem already exists in the form of the Medicare Secondary Payer Act, or MSP Act. Protecting the MSP Act from the special interests that want to gut it will preserve a program that helps the government recover literally billions of dollars each year from Medicare fraud and abuse.
The MSP Act was a bipartisan solution passed in 1980 to ensure that Medicare is the secondary (backup) payer for medical expenses when another payer, such as an employer-sponsored health plan, workers’ compensation, or third party — such as auto insurance — is available. The MSP Act is critical to ensuring that Medicare dollars are used efficiently and effectively and to protecting the program. It saved the Medicare program almost $10 billion in fiscal 2021.
But the Centers for Medicare & Medicaid Services has limited resources to devote to enforcing the MSP Act. As a result, billions of Medicare dollars that have been paid out in situations where insurers should have been on the hook for medical expenses have not been recovered. Medicare has a hard time pursuing these payments because insurers have enormous financial incentives both to cover up their liability and to fight fiercely when they are exposed and avoid paying the bills they should have paid from the beginning.
A Medicare watchdog group — MSP Recovery Inc. — recently exposed what may be the largest fraud of this kind, uncovering a deliberate gaming of the system. The country’s largest auto insurers admitted that in some cases they do not pay Medicare what it should have been paid as much as 98% of the time.
The insurance industry can’t beat back all CMS recovery efforts, but it has made advances in some states, and it scored a victory earlier this year when a lower federal court handed down a decision that allowed state law to preempt the MSP Act in ways that are critical to enforcing the law. If the ruling stands, it will cripple an essential weapon in the war against Medicare fraud and abuse.
Sen. Chuck Grassley, Iowa Republican, has often said that if the government doesn’t pursue fraud and abuse cases, “taxpayers are ultimately the ones who pay the price.” We can’t allow the insurance industry to exploit state laws to drain a fund created by tax-paying baby boomers to protect their financial security in retirement.
We don’t need new laws or benefit cutbacks. All we need is the government to weigh in on looming court battles or to clarify the MSP Act to ensure that it is able to carry out its mission to protect and sustain the Medicare Trust Fund.
• Jennifer Nunez is a registered nurse in New Hampshire. She served as director of emergency services at LRGH Healthcare.
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