US House of Representatives Passes SMART Act of 2012

Russell S whittle, Esq VP MSP ComplianceThe United States House of Representatives today passed the Saving Medicare and Repaying Taxpayers (SMART) Act as part of a broader legislative effort. The SMART Bill was attached to House Bill 1845 Medicare IVIG Access Bill which provides for a study on issues relating to access to intravenous immune globulin (IVIG) for Medicare beneficiaries in all care settings and authorizes a demonstration project to examine the benefits of providing coverage and payment for items and services necessary to administer IVIG in the home.

The SMART Bill allows the claimant or applicable plan to notify the Secretary of HHS 120 days before the expected date of settlement, judgment, award, or other payment, and obtain a statement of the reimbursement amount from a website the Secretary will make available. If settlement, judgment, award or other payment is made during such period, then the last statement of reimbursement amount downloaded during such period shall constitute the final conditional amount subject to recovery related to such settlement, judgment, award, or other payment. No later than November 15 before each year, the Secretary is required to calculate and publish single threshold amount for settlements, judgments, awards or other payments for conditional payment obligations from liability insurance (including self-insurance), workers’ compensation laws or plans, and no fault insurance for that year. Each such annual single threshold amount for a year shall equal the expected average cost of collection incurred by the United States (including payments made to contractors) for a conditional payment from liability insurance (including self-insurance), workers’ compensation laws or plans, and no fault insurance.

As for the $1,000 mandatory insurer reporting penalty, the Bill states that insuring entities “may be subject” to a civil money penalty of up to $1,000 for each day of noncompliance. The Secretary must publish a notice in the Federal Register soliciting proposals for the specification of practices for which sanctions will not be imposed, including for good faith efforts to identify a beneficiary. After considering the proposals submitted, the Secretary, in consultation with the Attorney General, shall publish in the Federal Register proposed specified practices for which such sanctions will not be imposed. After considering any public comments, the Secretary shall issue final rules specifying such practices.

The Bill also modifies reporting requirements so that an applicable plan is permitted, but not required, to access or report to the Secretary beneficiary social security account numbers or health identification claim numbers.

In addition, the Bill establishes a statute of limitations by indicating that an action may not be brought by the United States with respect to payment owed unless the complaint is filed not later than 3 years after the date of the receipt of notice of a settlement, judgment, award, or other payment made.

The SMART Bill was described as a bipartisan effort targeted at improving the Medicare Secondary Payer system and to create efficiency and accountability in the MSP Recovery system.

The Bill will now move on to the United States Senate where it could be presented for vote or referred to a committee where it may be reviewed to determine whether it requires additions, deletions or other modifications or whether it can be approved in the form submitted.  Gould and Lamb is actively monitoring and is involved with many legislative bills and committees including the SMART Act  We will continue to follow the Bill’s progress as it moves over to the Senate and will keep our clients informed.  If anyone has any questions please feel free to contact your Gould & Lamb representative directly or the entire executive is available to answer any questions.

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About the Author: Russell S. Whittle, Esq., is the Vice President of MSP Compliance for Gould & Lamb, LLC. In his twenty plus years of practice prior to joining Gould & Lamb, LLC, Mr. Whittle practiced primarily in the area of insurance defense, representing the interests of large insurers and employers in both workers’ compensation and general automobile liability matters.

Gould & Lamb is a global leader of MSA/MSP Compliance Services in the country, serving domestic and international insurance companies, third-party administrators and self-insured entities.

H.R. 1063 – Saving Medicare and Repaying Taxpayers Act Update

Russell S whittle, Esq VP MSP ComplianceOn Wednesday, September 21, 2011, the Medicare Advocacy Recovery Coalition (MARC) convened a General Membership Meeting followed by visits with members of Congress in Support of the Saving Medicare and Repaying Taxpayers Act (SMART Act), or H.R. 1063.

H.R. 1063 Positive Support

H.R. 1063 has been positively received by the House of Representatives, gathering 44 co-sponsors as of this posting. More importantly, the bill has bipartisan support with nearly as many Republicans as Democrats working for its enactment into law. The MARC Coalition can now begin to turn its attention to the Senate where the Bill has also been favorably reviewed.

Coalition Visits The Hill

Coalition members met with the office of Senator Ron Wyden (D-OR) and expressed their frustrations with Medicare Secondary Payer Act compliance and the urgency for reform as Mandatory Insurer Reporting fully takes effect in the coming year. Also in attendance was a representative from the office of Senator Rob Portman (R-OH). Certainly, Senate endorsement and support is critical to the effort to bring needed reform to the mechanism of Medicare’s subrogation recovery in personal injury cases.

I was privileged to meet with staffers from the offices of Representative Mike Rogers (R-AL) and Representative Frank Pallone (D-NJ). The Congressmen are aware of the current untenable position that beneficiaries and litigants are facing and were very interested in both the position and performance of the Centers for Medicare and Medicaid Services (CMS) in lien recovery efforts. I was advised several times during the day that the Oversight Committee Hearing of June 22, 2011 was instrumental in bringing Medicare compliance issues to the attention of lawmakers.

Moving Forward

The MARC Coalition is optimistic that there will be some major movement towards a vote on the Bill by year’s end. Certainly, with Congress debating healthcare and the Medicare system itself, the time seems right to bring the certainty and clarity to litigants and to the Medicare Trust Fund that the Bill promises.


About the Author: Russell S. Whittle, Esq., is the Vice President of MSP Compliance for Gould & Lamb, LLC. In his twenty plus years of practice prior to joining Gould & Lamb, LLC, Mr. Whittle practiced primarily in the area of insurance defense, representing the interests of large insurers and employers in both workers’ compensation and general automobile liability matters.

Medicare Bill: H. R. 1063

Medicare H.R. 1063: The Strengthening Medicare and Repaying Taxpayers Act

Russell S whittle, Esq VP MSP ComplianceThe Medicare Advocacy Recovery Coalition MARC has drafted The Strengthening Medicare and Repaying Taxpayers (SMART) Act which was introduced to Congress on March 14, 2011. H.R. 1063 is a streamlined and, we hope, more palatable version of last year’s H.R. 4796, The Medicare Secondary Payer Enhancement Act of 2010. I was  honored to be present in Washington, D.C. on March 16, 2011 for a membership meeting and to discuss the SMART ACT with the offices of Representative Kathy Castor (D-FL) and Representative Michael H. Michaud (D-ME-2).

MARC has drafted and backed the legislation that proposes significant changes to the Medicare Secondary Payer Act, 42 USC 1395(y) et seq. Specifically, H.R. 1063, sponsored by Congressman Tim Murphy (R-PA), supports Medicare’s need to be reimbursed for conditional payments while simplifying the payment process and providing all parties to a claim much needed certainty and finality.

The Strengthening Medicare and Repaying Taxpayers Act - SMARTKey provisions of H.R. 1063 include a revision of the information flow so that a conditional payment demand occurs before settlement, a requirement that Medicare  provide the conditional payment amount to the requesting party within sixty five (65) days of a request, and a mechanism to establish a threshold below which Medicare recovery efforts would not ensue. Additionally, the bill provides that the current Medicare and Medicaid SCHIP Extension Act Section 111 Mandatory Insurer Reporting penalties of $1000.00 per claim per day be discretionary and based upon the Responsible Reporting Entity’s – RRE’s willful failure to report pursuant to that section. It further protects against beneficiaries’ having to disclose their Social Security Numbers – SSN or Health Insurance Claim Number – HICN. Like H.R. 4796, an internal appellate process is available to contest the amount sought to be recovered.

H.R. 1063 brings certainty to the conditional payment process by imposing rigid time  constraints on Medicare to act within a fixed time frame which provides settling parties needed information required to resolve their claims. As with H.R. 4796, the certainty imposed by the bill does not come without cost, however. In seeking to bring concrete time frames to Medicare subrogation interests, the bill adds a layer of litigation. In order to successfully appeal Medicare’s reimbursement amount, a beneficiary must resort to the legal process, ending in district court. Despite the statutory certainty of the demand process, litigants would be forced to decide whether the amounts requested by Medicare are sufficiently large and unsupported enough to consider litigating the conditional payment amounts themselves. This extends the time for receipt of settlement dollars, the underlying litigation and prolongs the claim itself.

Gould and Lamb believes that H.R. 1063 deserves the support of the Medicare compliance industry. Any measure designed to ensure timely responses by the MSPRC (Medicare Secondary Payer Recovery Contractor) is welcome and long overdue. The MARC Coalition has created a bill which will help litigants and the Medicare compliance  industry timely receive the critical information required for resolution of the claim. This will result in reducing the time a claim remains open, the benefits paid during the pendency of the claim and will return much need funds to a federal system in serious financial distress. Please visit the MARC website for more information.

Medicare-Secondary-Payer Enhancement-Act-2010-HR-4796

Meeting on Medicare Secondary Payer Enhancement Bill HR 4796 between Legislators and MARC Members

As a newly appointed member of the Steering Committee for the Medicare Advocacy Recovery Coalition (MARC), I was fortunate to be present in Washington, D.C. on September 21, 2010 for a membership meeting to then discuss HR 4796 legislation with the office of Congresswoman Kathy Castor, D-FL.

MARC has sponsored and backed legislation that proposes significant changes to the MSP Act. Specifically, MARC believes that HR 4796, the Medicare Secondary Payer Enhancement Act of 2010, introduced by Congressman Patrick Murphy (D-PA) and Congressman Tim Murphy (R-PA), supports the government’s need to be reimbursed for Medicare expenses while streamlining the payment process and providing all parties to a claim much needed certainty and finality.

Key Provisions in Medicare Secondary Payer Bill

Key provisions of the bill include a revision of the information flow so that an MSP conditional payment demand occurs before settlement, a “safe harbor” alternative if the Center for Medicare and Medicaid Services (CMS) is unable to provide a final demand before settlement, a right of appeal to a non-group health plan settling party, establishment of a $5,000 threshold on MSP recoveries, a three year statute of limitations and protection against beneficiaries’ having to disclose their Social Security Numbers (SSN) or Health Insurance Card Number (HICN).

Significantly, HR 4796 also provides that the current Section 111 Mandatory Insurer Reporting penalties of $1000.00 per day per claim be discretionary and based upon the Responsible Reporting Entity’s (RRE) willful failure to report pursuant to the section.

Gould and Lamb supports the HR 4796 bill and believes that attempts to bring clarity to MSP compliance and the obligation to deal with Medicare’s interests in an efficient manner is long overdue. The bill provides a more timely and efficient procedure for conditional payment resolution. Under it, litigants can negotiate directly with Medicare Secondary payer Recovery Contractor (MSPRC). Within ninety (90) days of expected settlement, the claimant and insurance plan may calculate and pay the amount it believes is due for conditional payments.

The Secretary then has seventy five (75) days after receipt of the payment to contest the amount of the reimbursement amount and provide proof of the remaining amount due. The claimant then may pursue an appeal of the amount requested by Medicare which includes an administrative law judge, administrative review board, or judicial review in the district court of the United States.

Additionally, a claimant can request a Final Demand within one hundred twenty (120) days of a settlement, judgment or award. Should the Secretary fail to provide the demand within sixty (60) days of the request, the amount previously paid would be deemed sufficient to satisfy the conditional payment obligation of the MSP statute.

Bill HR 4796 Brings Certainty to MSP Conditional Payment Process

Accordingly, the bill brings certainty to the conditional payment process by imposing rigid time frames on Medicare to act either by contesting the amount received or by providing a final demand within a fixed time frame. The certainty imposed by the bill does not come without cost, however. In seeking to bring concrete time frames to MSP Compliance, the bill adds a layer of litigation.

In order to successfully appeal Medicare’s reimbursement amount, a beneficiary must resort to the legal process, ending in district court. Despite the statutory certainty of the demand process, litigants would be forced to decide whether the amounts requested by Medicare are sufficiently large and unsupported enough to consider litigating the conditional payment amounts themselves. This extends the time for receipt of settlement dollars, the underlying litigation and prolongs the claim itself.

Gould and Lamb believes that HR 4796 deserves the support of the Medicare Compliance industry as it represents an attempt to address the primary problems that litigants and beneficiaries have had with MSPRC; unresponsiveness. When measuring the added cost of a Medicare appellate layer against the certainty that codification and regulation would bring to MSP Compliance, the scales clearly and overwhelmingly tip in favor of the latter.

Click Here to Download the MSP Compliance Protocols User Guide from Gould and Lamb
Download Gould and Lamb’s Medicare Secondary Payer Compliance and Protocols User Guide

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