In January 2013, President Obama signed the SMART Act (H.R. 1845) into law. The overall intent of the SMART Act was to simplify the Medicare Secondary Payer process by providing clear (and in some cases, time-restricted) guidelines for Medicare beneficiaries to follow. The SMART Act has a number of ramifications that affect those involved in liability and Workers’ Compensation cases.
Among other provisions that will be implemented over the next 18 months, the SMART Act will shorten the length of time Medicare has to provide a Medicare reimbursement amount, establish a web portal for certain case-related information, and require a single minimum threshold to be established on an annual basis that exempts certain claims from MSP reporting requirements.
Statute of Limitations on Reimbursement
Under MSP laws, if an individual is injured and has certain types of insurance coverage, the insurance company is responsible for paying for injury- or illness-related services. If that payment does not cover the full cost of services, Medicare assumes responsibility as the “secondary payer.” If Medicare has paid for services that a primary payer should have been responsible for, Medicare has the right to seek reimbursement from the beneficiary.
On July 10, 2013, an important piece of the SMART Act went into effect. The government will now have a set period of three years to seek reimbursement for costs that another party has accepted responsibility for (per a settlement, judgment, award, or other payment). The three-year statute of limitations is to be measured beginning on the date of reporting the case to CMS (see Section 111 of the Medicare Medicaid SCHIP Extension Act of 2007 for Mandatory Insurer Reporting Rules). This change protects the Medicare beneficiary from being hit several years down the line for reimbursement.
For more information on reporting requirements, visit the Centers for Medicare and Medicaid Services: Liability, No-Fault and Workers’ Compensation Reporting page.
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).