Recently, Congressmen Tim Murphy (R-PA) and Ronald Kind (D-WI) introduced HR 1063, a bill titled the “Strengthening Medicare And Repaying Taxpayers Act of 2011.” This piece of legislation, known as the SMART Act, purports to provide a more streamlined approach to reimbursing Medicare for conditional payments made for injury-related care under the Medicare Secondary Payer (“MSP”) Act (42 U.S.C. §1395y(b)). Additionally, this bill purports to allow for less onerous requirements for entities obligated to report to Medicare under the recently enacted Medicare, Medicaid and SCHIP Extension Act of 2007 (“MMSEA”).
If passed by Congress and signed into law, the SMART Act would provide for the following:
• Request for Conditional Payment Statement. Claimants and applicable plans would be able to notify Medicare, beginning 120 days before the reasonably expected date of settlement/judgment/award/other payment, that a payment is reasonably expected, and ask Medicare for a statement of the conditional payment reimbursement amount (the “Document”). A claimant or applicable plan would be able to make this request for the Document only once with respect to such settlement/judgment/award/other payment.
• Medicare’s Response. Medicare would provide the Document no later than sixty-five (65) days after date of receipt of the request for the Document. If Medicare fails to provide the Document, the claimant or applicable plan would provide an additional notice to Medicare. If Medicare then fails to provide the Document within thirty (30) days after receipt of the additional notice, the claimant, applicable plan and an entity that receives payment from an applicable plan would not be liable to make payment to Medicare for conditional payment reimbursement unless Medicare could prove the failure to provide the Document was justified due to exceptional circumstances (defined so that not more than one percent (1%) of the repayment obligations would qualify as exceptional circumstances).
• Notice to Medicare of Failure to Settle. If settlement/judgment/award/other payment did not occur within 120 days as anticipated by the parties, the claimant or applicable plan shall timely notify Medicare, thus exempting Medicare from any obligations imposed above.
• Right of Appeal. Medicare would establish a right of appeal and appeals process for the payment procedures set forth above, including review through an Administrative Law Judge and access to the US District Court.
• Threshold. There would be no conditional payment reimbursement obligation and no reporting obligation under MMSEA when the settlement/judgment/award/other payment fails to reach a certain threshold as determined by Medicare on an annual basis.
• Reporting Requirement Safe Harbors. The MMSEA would be amended to allow Medicare the discretion not to apply the statutory $1,000 penalty for each day of noncompliance with a responsible reporting entity’s reporting obligation. The severity of each penalty would be based on the knowing, willful and repeated nature of the violation. This section would also allow for the creation of safe harbors from penalties asserted under the MMSEA.
• Use of Social Security Numbers and Other Identifying Information in Reporting. The MMSEA would be amended so that responsible reporting entities would not be required to access or report social security numbers or health identification claim numbers (i.e., Medicare numbers) of claimants.
• Statute of Limitations. A three (3) year statute of limitation would be established within which time the Federal government must bring any action associated with compliance under the MSP.
Additionally, penalties asserted under the MMSEA would not be permitted unless service of notice was provided no later than three (3) years after the date by which the information was required to be submitted.
We will continue to follow the progress of this legislation, in addition to other pieces of legislation that may affect DRI members. A copy of HR 1063 may be found by clicking this link.
