Verisk Analytics : SPARC Act Reintroduced in Congress

On February 16, Congressman Tim Murphy (R-PA) reintroduced H.R. 1122, the Secondary Payer Advancement, Rationalization, and Clarification Act, or SPARC Act. Originally filed last September, the bipartisan bill never moved out of committee. The SPARC Act, covered in an earlier post, seeks to ensure that Medicare Part D (which is available for prescription drug coverage) is adequately reimbursed when another entity is determined to be the primary payer. Most often, this occurs with workers' compensation claims, motor vehicle accidents, or liability claims.

The SPARC Act is being promoted by the Medicare Advocacy Recovery Coalition (MARC) and is based on four main principles.

1. Beneficiary access to medical care
2. Fairness and transparency for all parties involved in treating a Medicare beneficiary
3. Establishing a process that ensures certainty and simplicity for parties involved in settling a claim
4. Providing for fiscal responsibility to ensure taxpayer dollars are not wasted and the Medicare program is not spending funds unnecessarily

The SPARC Act mandates that the Centers for Medicare and Medicaid Services (CMS) provide Part D plans with possible primary payer information for Part D beneficiaries within 15 days of receiving this information. A Part D plan may then assert recovery efforts for a definitive time frame. The Act limits Part D plans' recovery rights to instances in which the recovery exceeds the collection costs. This provision preserves resources and establishes a three-year statute of limitations for recovery. The reintroduced Act mirrors language filed last session; the only noteworthy change is an increase in the time in which a Part D plan may seek reimbursement from 20 to 30 days.

The industry has been watching the recovery rights of Medicare Advantage Plans, or Part C Plans, play out in courts around the country. The legislative battles have left payers feeling uncertain about the risk exposure of Part C plans. If enacted, this bill would solve this issue for Part D plans and limit the present uncertainty around recovery rights for Medicare Part D drug programs.

H.R. 1122 is currently referred to the House Ways and Means Committee and the Committee on Energy and Commerce for a period to be determined by the Speaker. The bill will then need to go through a fiscal scoring process, which will likely indicate its ultimate passage. ISO Claims Partners will continue to actively monitor this legislation for movement and provide timely updates.