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President Obama Signs the SMART Act into Law

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The SMART Act was signed by President Obama today, on January 10, 2013 after having passed in both branches of Congress. The SMART Act was passed as part of H.R. 1845 and attached onto a Medicare IVIG Access Bill; it reforms several aspects of the conditional payment and MMSEA Section 111 processes. The items within H.R. 1845 which relate to MSP reform are discussed below; items relating to the Medicare IVIG Access Bill have been omitted.

Below is a breakdown of the MSP reforms within H.R. 1845 by section. As noted within each section, certain reforms have timelines as to when they will take place.

For a full copy of H.R. 1845, please click here.

Section 201 (Conditional Payment Final Demand and use of Website):

This section seeks to improve efficiency in the conditional payment system.

1.      A claimant or “applicable plan” may at any time 120 days prior to the settlement, judgment or award notify the Secretary of the expected date and amount.

2.      The Secretary must provide conditional payment information through a website and update the information no later than 15 days after a payment is made.

3.      If certain conditions are met, the last statement downloaded from the website can be considered the final demand (see information on protected period in section V within HR 1845; essentially it is 65 days from the time CMS receives notice although the Secretary may extend for an additional 30 days).

4.      If there is a dispute over the conditional payment amount, the Secretary must respond/resolve the dispute within 11 days or the proposed resolution by the claimant/applicable plan will be deemed accepted.

5.      This process will go into effect 9 months after H.R. 1845 goes into effect (effective date of H.R. 1845 is January 10, 2013). This section also provides that the Secretary create an appeals process for conditional payments.

Section 202 (Thresholds for Reporting and Conditional Payment Reimbursement):

By November 15th each year, the Secretary will have to publish a threshold wherein reporting and conditional payment reimbursement will not apply. This will begin in the year 2014.

Section 203 (Discretionary Fines for noncompliance with MIR):

Fines for noncompliance with MIR will now be discretionary rather than mandatory; however, the guidelines surrounding discretion are not yet created.  Within 60 days of the passage of H.R. 1845 (effective date of H.R. 1845 is January 10, 2013), CMS will seek proposed comments on which actions/practices should be sanctionable and which should be non-sanctionable in the Federal Register.

Section 204 (SSNs/HICNs in MIR):

An RRE will no longer be required to report SSNs and/or health identification claim numbers going forward. However, the timelines for implementing this are very loose. CMS has 18 months after the date of the enactment of 1845 to publish rules surrounding this, and CMS may seek one or more periods of up to 1 year in extensions if certain criteria are met (see section 204 for more information).

Section 205 (Statute of Limitations for conditional payment recovery):

The statute of limitations for conditional payment recovery is 3 years after the receipt of notice of a settlement, judgment, award or other payment made.

The passage of the SMART Act is great news. I will continue to keep everyone apprised of any updates surrounding H.R. 1845.

About the Author

Heather Schwartz, Esq., MSCC, CHPE, CLMP, CMSP

Heather Schwartz, Esq., MSCC, CHPE, CLMP, CMSP

Heather is Corporate Counsel for PMSI Settlement Solutions, an industry leading provider of Medicare-Set Aside Allocations. Heather’s primary responsibility is the education and assistance of compliance with the Medicare Secondary Payer Act. She has lectured on this topic to the workers’ compensation and liability insurance and legal communities at conferences, associations, and individual offices nationwide. 

Heather is a major contributor to PMSI’s MedicareInsights blog, and also has published numerous publications on court decisions and legislative reforms involving Medicare Set-Asides, conditional payments, and Mandatory Insurer Reporting issues. Understanding that compliance with the Medicare Secondary Payer Act can be at times complex and frustrating for those that handle claims with Medicare beneficiaries, Heather’s goal is to speak and write with the primary goal being simple and understandable solutions to compliance.

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