The Medicare Secondary Payer ("MSP") program provides that in certain instances, Medicare is the primary payer for beneficiaries, but under other circumstances, the beneficiary's health insurance or coverage is the primary payer and Medicare is the secondary payer. Understanding Medicare guidelines can be trying, even for those accustomed to wading through government verbiage. For the typical American, it can feel almost impossible, which creates a huge problem for you as their attorney.
When it comes to Workers' Compensation and liability cases, the Centers for Medicare and Medicaid Services ("CMS") has not released regulations for the review of Medicare Set-asides ("MSAs"), although an informal agency memo has established a voluntary procedure for parties to seek review and approval of Workers' Compensation MSAs.
As those of you who have dealt with Medicare issues can attest, there have been many complaints about timeliness and efficiency on the part of CMS. In the words of House Energy and Commerce Committee Chairman Rep. Fred Upton,
"Although Congress has sought to improve Medicare Secondary Payer over the years, […], problems still persist. Today, many injury claims cannot be settled in a timely or conclusive manner because of the actions of CMS. […], party settlements are often delayed or settlement amounts placed in escrow until CMS can deliver a final amount–a process that can take years. This lack of a timely response has created a costly legal nightmare for large and small businesses, and created undue hardship on beneficiaries through no fault of their own."
On September 20, 2012, the House Energy and Commerce Committee passed H.R. 1063, the Strengthening Medicare and Repaying Taxpayers (SMART) Act. The bill is intended to amend title XVIII of the Social Security Act by addressing many of CMS's problems in regards to the Medicare Secondary Payer program.
With revisions made by the Committee, the bill includes the following major improvements:
- Response time: Within 120 days of a settlement, judgment, award, or other payment, the claimant or applicable plan may notify the U.S. Department of Health and Human Services that a payment is reasonably expected. The Secretary has 65 days from the receipt of a request to provide the Medicare reimbursement amount.
- Web portal: The establishment of a web portal on the CMS website which gives users (e.g. attorneys, insurers, beneficiaries, third party administrators) the ability to access and update certain case-related information online. Website information must be updated no later than 15 days after the receipt of the claims.
- Thresholds: The Secretary must establish a single minimum threshold by November 15th of each year exempting certain claims from MSP reporting requirements. This prevents the government from spending more than it collects on small claims.
- Penalties: Penalties for non-payment will be discretionary, not mandatory, and will be relative to an offender's record of non-payment (if applicable).
- Identifying information: Reporting requirements will be modified so that an applicable plan is permitted, but not required, to access or report beneficiary social security account or health identification claim numbers.
- Statute of limitations: The government will not be permitted to bring action against a beneficiary who owes payment if the complaint is filed more than 3 years after the date of the receipt of notice of a settlement, judgment, award or other payment.
This bill has been referred to the House Committee on Ways and Means. It is vital that as plaintiff advocates, we take a call to action and contact our legislators to ask for their support in simplifying the MSP program.
A West Point graduate where he served as captain and military aviator, John Bair continues his commitment to our country through his efforts within the settlement planning industry. He has represented families of victims lost in the Flight 3407 crash, offered pro bono services to the families of 9/11 victims and drafted the first consumer protection bill for plaintiffs (H.R. 3699).