Synergy Blog

Senators Concerned Over Delay In SMART Act Implementation

Senators Concerned Over Delay In SMART Act Implementation

By: David L. Place, J.D. Vice President, Director of Lien Resolution Services

On July 14, 2014 Senator Rob Portman and a group of seven other Senators sent a letter to the Centers for Medicare and Medicaid Services (CMS) expressing concern that implementation of The Strengthening Medicare and Repaying Taxpayers (SMART) Act has been delayed.  As the Senators point out, the delay in implementing the SMART Act will continue to cause the settlement of personal injury actions to be delayed by months.

Though the Senators’ letter speaks to the loss of tens of millions of dollars per month to Medicare due to the delay in implementing the SMART Act, the plaintiff’s bar and their injured clients experience these losses in a more personal and direct manner. The SMART Act was designed to allow plaintiff attorneys to know the exact amount that must be repaid to satisfy Medicare’s lien for Conditional Payment before they settle the underlying personal injury case. The delay in implementing the SMART Act leaves plaintiff’s counsel in the dangerous position of attempting to resolve the personal injury claim without having an accurate number for what portion of the settlement must be repaid to Medicare.

As the Senators note in September 2013, CMS chose to issue an interim final rule saying that due to “data security concerns,” the SMART Act website would not be operational until 2016. The Senators also noted that despite this concern over date security, nothing has been done since the issuing of that interim rule to improve the website’s security and they:

“[U]rge [CMS] to complete the development of a full and robust portal, to not only enhance Medicare recoveries, but to ease compliance for regulated entities and beneficiaries.”

In addition to the request for a “robust” website, the Senators requested that the new $1,000 reporting threshold for liability cases be expanded to include workers compensation and no fault claims.  This would mean that no case that settles for less than $1,000 will need to be reported to CMS by either the plaintiff or defense.

The Senators also complained that CMS was in non-compliance with the SMART Act’s requirement that by July 2014 they stop using beneficiaries’ full social security numbers in the reporting process. 

“[A]lthough the Agency was given until July 10, 2014 to eliminate the use of full SSNs, CMS has made no announcements related to that change which is due to occur in the next several weeks.”

Given the poor compliance by CMS, these Senators also asked that safe-harbors be created to protect those who attempt in good faith to comply with “Medicare’s complex MSP reporting process.” 

The SMART Act will give the plaintiff’s attorney a way of knowing exactly how much must be repaid to Medicare prior to trial or mediation.  As most plaintiff attorneys know, that has been a very large problem in the past.  If CMS would move with a purpose, as the Senators request, the plaintiff’s bar should experience a much faster resolution process for both their issues with Medicare, as well as in the underlying personal injury action.

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