For attorneys and their clients, determining how much the client owes Medicare proved to be an arduous process. The SMART Act was passed to make the lien resolution process more efficient. In part one of our article, we briefly discussed conditional payments and healthcare liens. This part will focus on the challenges of reporting and the benefits of the SMART Act.
The Challenges of Reporting
In 2007, companies were required by Congress to report every award or payment made to a beneficiary back to CMS. However, reporting claims and settlements became inefficient which led to delays and wasted resources. Under the new Act, CMS has 65 days from the receipt of a request to provide the Medicare reimbursement amount. This amount can be extended 30 additional days in some cases. After this, parties can rely on the reimbursement amount on the CMS website as long as the claim will settle within three business days.
What is the SMART Act?
The Strengthening Medicare and Repaying Taxpayers Act of 2012 (SMART Act), section 1862(b) of the Social Security Act, was established by President Obama to streamline and improve Medicare’s Secondary Payer (MSP) requirements and process. In 2015, CMS implemented provisions that establish a right of appeals for applicable plans. Improvements to the Act included expanding the MSP recovery portal, publishing an annual threshold for recovery on claims, eliminating the requirement of a social security number or health identification claim number when reporting, and establishing a three-year statute of limitations for MSP actions.
Benefits of the SMART Act
The SMART Act has proven beneficial to attorneys and their clients. The Act gives plaintiff’s and their attorneys the ability to determine the Medicare conditional payment before they settle. In the past, plaintiff’s were only able to get an estimated conditional payment amount. Final figures are often delayed which could ultimately lead to a delay in disbursing a plaintiff’s settlement funds. This is why providing the Medicare Secondary Payer Recovery Contractor (MSPRC) with enough time to calculate the conditional payments prior to settlement is critical.
As stated previously, the SMART Act also eliminates the previous requirement to provide a social security or health identification number in order for reporting entities to determine the plaintiff’s eligibility for Medicare. Providing a social security number to an entity in which they were pursuing a claim against proved to be inefficient. Additionally, the Act empowers attorneys with more clarity which will aid in their settlement negotiations, and it lessens the likelihood of a delayed release of settlement funds once the case has settled.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.