On January 10, 2013, President Obama signed the Strengthening Medicare and Repaying Taxpayers (“SMART Act”) into law. The law is intended to ease the burden of certain Medicare Secondary Payer requirements on the parties to litigation. The Act’s highlights include:
Permits parties to determine Medicare’s claim for conditional payment reimbursement prior to settlement. This eliminates the practice of only issuing the “final demand letter” after settlement was completed. Thus, parties will now be able to determine their conditional payment exposure before finalizing settlement.
Provides that rules shall be promulgated for a formal appeals process from Medicare’s determinations regarding its entitlement to conditional payment reimbursement.
Establishes an exemption from reimbursement claims for low dollar liability settlements.
Enacts a three-year statute of limitations for Medicare’s claims for conditional payment reimbursement, thereby providing more certainty to the parties to litigation. The SMART Act provides that CMS must bring suit to secure reimbursement of conditional payments within three years of the date that CMS receives notice of a settlement, judgment, award, or other payment.
Makes the $1,000 per day penalty for failure to properly report under Section 111 discretionary as opposed to mandatory. This provision is aimed at avoiding penalties in instances of good faith compliance.
We are pleased that Congress has finally taken steps to address the inefficiencies within the Medicare Secondary Payer Act. We will continue to monitor the SMART Act and keep you advised regarding its practical implications. The SMART Act does a great deal to streamline resolution of Medicare’s pre-settlement interest, i.e., conditional payments. We are hopeful that Congress will eventually take a similar approach to addressing Medicare’s future interests, i.e., Medicare Set-Asides.
Please always feel free to contact Wiedner & McAuliffe’s Medicare Set-Aside attorneys if you would like additional information regarding the SMART Act or other Medicare compliance issues.