President Signs Bipartisan Medicare Law

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For Immediate Release: January 10, 2013

Contact: Katie Gommel
American Association for Justice

President Signs Bipartisan Medicare Law

AAJ Response to the Passage of the SMART Act

Washington, DC—The following is a statement from the American Association for Justice (AAJ) President Mary Alice McLarty in response to the President signing the Strengthening Medicare and Repaying Taxpayers (SMART) Act, which was introduced by Reps. Tim Murphy (R-PA) and Ron Kind (D-WI) in the House and Sens. Ron Wyden (D-OR), Rob Portman (R-OH), Ben Nelson (D-NE) and Richard Burr (R-NC) in the Senate:

“This bipartisan legislation is a practical solution that will streamline the Medicare Secondary Payer system to ensure that seniors and persons with disabilities get timely assistance and taxpayers are repaid millions of dollars every year.”

“This legislation is a big step forward and is the result of senior advocates, the legal community and the business community coming together to work out a common sense solution.”

“There is still work to be done.  To ensure this legislation has the most impact, [the Centers for Medicare and Medicaid Services] CMS must eliminate confusion and uncertainty by providing clear, efficient and definitive information to seniors.”  

Medicare Secondary Payer (MSP):

  • The MSP process ensures Medicare is reimbursed for medical bills that are the responsibility of another party – such as an insurer or negligent party.
  • A senior or person with disabilities who has been injured, and later obtains recourse through the legal system, often cannot access their settlement until Medicare is reimbursed for all medical costs.
  • The current MSP system is inefficient and slow to return dollars to the Medicare Trust Fund, which is funded by tax payer money.
  • It can take years for the Centers for Medicare and Medicaid Services (CMS) to report reimbursement amounts to beneficiaries and CMS can seek multiple reimbursement amounts over time, providing further delay and uncertainty.

The SMART Act will:

  • Require CMS to maintain a secure web portal to access claims and reimbursement amounts in a timely fashion.
    • CMS must upload care payments they disperse within 15 days with the required information about the payment.
  • Streamline the process of obtaining reimbursement amounts.
    • Medicare beneficiaries must notify CMS they are anticipating a settlement no more than 120 days beforehand.
    • CMS then has 65 days to ensure the web portal is up-to-date, but may request an additional 30 days, if needed.
    • Reimbursement amounts are reliable if downloaded from the web portal within three days of settlement.
  • Provide a process and timeline for discrepancies and appeals.
    • Medicare beneficiaries can provide documentation for discrepancies on the web portal to CMS.
    • CMS has 11 days to respond to discrepancies.
    • If CMS does not respond in 11 days, the amount calculated by the beneficiary is the correct amount. 
    • An additional appeal process must be established by CMS for reimbursements it attempts to collect from insurance plans.
  • Create a threshold for collecting any payment amounts by CMS that are below the cost it incurs to collect an average claim.
  • Readjust the penalty for reporting errors by insurers based on the violation.
  • Ensure greater privacy for beneficiaries by no longer requiring use of full social security or health id claim numbers.
  • Create a three year limit for CMS to seek any repayments beginning from when they were informed of an anticipated settlement.
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