SMART Act: Is Medicare Lien Resolution Smarter Now?

On January 10, 2013, President Obama signed H.R. 1845.  Included on the Medicare IVIG Access Bill is the SMART Act.  SMART was designed to reform the conditional payment, final demand, and MMSEA Section 111 reporting processes.  Click here to read the full text of H.R. 1845.  As you can see below, we aren’t as excited with SMART as we had been in the past.

The Problem Before SMART

The problems we have run into (say, prior to January 10, 2013) usually involve attorneys on both the plaintiff and defense side not realizing the Medicare lien is not final.  SMART was intended to address the question:

“How do I settle if I don’t know how much Medicare wants?”

Before SMART our answer was usually long, calculated, and not really an answer.

We would tell attorneys that we have a conditional payment amount of X and that it will reduce down to Y after you provide Medicare with your costs and fees.  But we would remind them that the conditional payment amount would get one more review at that time, and, if Medicare found any new payments it deemed related, it would add those payments to the Final Demand.  We could assume the lien may or may not change depending on the age of a conditional payment letter.  For example, if the conditional payment letter was more than a year old we would worry that it would increase.  Of course, as long as we were involved in the process, we wouldn’t allow the case to proceed without obtaining updated conditional payment letters every few months.

Now we ask two new questions: What does the final version of SMART look like? What changes?

The SMART Act: Sections 201-205 of Medicare IVIG Access

Section 201 – Determination of reimbursement amount through CMS website to improve program efficiency

Section 201 is the most important section to Medicare lien resolution.  The section seeks to improve efficiency in the conditional payment system, including providing a mechanism for pre-settlement final demands.  In a nutshell, here’s how it works:

1. At any time 120 days prior to the expected settlement, judgment, or award the claimant or applicable plan may notify the Secretary (of HHS, in reality they notify the MSPRC) of the expected date of settlement.  You need not notify the MSPRC of the expected amount.
2. CMS then has 65 days from receipt of said notification/request to provide the Medicare reimbursement amount (via the Website).  This 65 day period can be extended to 95 days in exceptional circumstances; however, exceptional circumstances are limited to 1 percent of repayment obligation files. The time period after the 65-95 day period and before the end of the 120 day limit is deemed by the new 1862(b)(2)(B)(vii)(V) as the “Protected Period.”
3. If the plaintiff or applicable plan downloads a Medicare claims statement from the Website during the Protected Period, and, does so within 3 business days before the date of settlement, judgment, award, or other payment, that downloaded amount shall constitute the “final conditional amount.”
4. There is also a mechanism for a non-appeal reduction of this final conditional amount.  Section IV states that the plaintiff can provide documentation describing and explaining the discrepancy between the amount and the amount he believes is fairly related to the case.  There is no time frame for sending this discrepancy dispute; however, we believe the MSPRC will create a limited time frame.  Then, the MSPRC is given just 11 business days (following receipt) to determine whether there is a reasonable basis for it to remove the claims.  If no determination is made within the 11-business days the discrepancy dispute is deemed accepted.  We also expect strict rules on that 11-day time frame (likely not based on your receipt of the MSPRC response).  It is important to remember that this discrepancy dispute process is not connected to and does not limit the regular appeals process that currently exists.

Sections 202-205

Sections 202-205 are not as important to the Medicare lien resolution process.  Section 202 creates a minimum threshold for both Mandatory Insurer reporting and conditional payment reimbursement.  The Secretary of HHS is required to publish that threshold by November 15 each year.  Application of this section begins in 2014.

Section 203 makes fines for noncompliance of Mandatory Insurer Reporting discretionary instead of mandatory.  Guidelines are not yet developed.

Section 204 states that a Responsible Reporting Entity in Mandatory Insurer Reporting need not report SSNs or Health Insurance Claim Numbers.  The time frame for implementing Section 204 is 18 to 30 months.

Section 205 creates a statute of limitations for conditional payment recovery of three years.

Will SMART help?

Yes. No. Maybe.

SMART has good intentions; however, it has very strict requirements.  It may be difficult to qualify for a final conditional reimbursement amount.  You have to be vigilant to get that amount and then you have to settle within 3 days of the download.  If you forget to download the amount then it is not final.

We worry that the strict time frames on discrepancy disputes responses (just 11 days) will result in the MSPRC simply denying all disputes.  You can still appeal.

SMART must be implemented within 9 months of January 10 (approximately October 10) – hopefully the MSPRC can keep up.  The government will not allow the Medicare lien process to simply disappear through its own inability to keep up with time limits.

If you need help with any type of lien resolution 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.

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