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House & Senate Pass Medicare’s SMART Act

Both the House and Senate passed the SMART act prior to the Christmas holiday last week.  In the House just 3 “no” votes were cast against 401 “yes” votes.  The Senate passed the act without a single “no” vote.  There is little doubt that President Obama will sign the bill into law.

What is the SMART Act?

The SMART, or, Strengthening Medicare and Repaying Taxpayers Act is designed to cause major changes to the Medicare Secondary Payer (MSP) process for nongroup health plans.  This means it is aimed squarely at Medicare Parts A & B “liens.”  The Act effectuates changes to both plaintiff-beneficiaries and primary payers (a/k/a/ defendant insurance companies).  Plaintiffs and their attorneys should benefit from a provision locking in the Conditional Payment amount for three months.  Primary payers will benefit from safe harbor provisions for RRE reporting.

Primary Payer Benefits

The SMART Act will help primary payers primarily by creating a safe harbor where the primary payer is unable to obtain the plaintiffs’ Social Security Numbers after a good faith effort.  This change was necessitated by plaintiffs’ refusal to provide their Medicare numbers or SSNs due to privacy concerns.  Medicare numbers are often just as “private” as SSNs because they are generally the SSN followed by a letter.

The Centers for Medicare and Medicaid Services (CMS) had created a Query System to determine whether individuals are Medicare eligible; however, that system has been reliant on Medicare numbers and SSNs.  It will be interesting to see if CMS can develop a workable system that avoids such personal information.

In addition to eliminating the use of SSNs and Medicare numbers, SMART creates a three-year statute of limitation for all MSP claims.  The statute of limitations issue had been hotly contested prior to this change.

Finally, the $1,000/day penalty for non-reporting will be modified.

Plaintiff-Beneficiary Benefits

The key benefit for Plaintiffs and their attorneys will be the ability to “lock in” conditional payment amounts prior to settlement.  If you provide the MSPRC with enough time to calculate the conditional payments prior to settlement, and, if you notify the MSPRC of settlement less than three months after its determination of conditional payments, it cannot increase that amount.  We do question whether the MSPRC can comply with such a system.  This rule could lead to an even longer waiting period for the initial conditional payment letter.

Nonetheless, this 3-Month Lock-In should be very exciting to plaintiff attorneys as it should take some of the guessing game out of MSP compliance.  It is important to remember the SMART Act does not effect or create MSA rules.

At Lien Resolution Services we can assist you with Medicare lien resolution, Medicaid lien resolution, ERISA liens, private insurance liens, and more.  We’ll take care of getting you the “lien” and reducing it too.

Ryan J. Weiner
Lien Resolution Services
This Blog/Web Site is made available by the publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

About Ryan J. Weiner

Co-Founder of Lien Resolution Services, LLC, a national healthcare lien resolution firm. Our goal is to assist in the fair administration and resolution of healthcare liens on personal injury cases. Please visit our website for more information: www.lienresolutionusa.com.

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