SMART Act Signed into Law by President Obama

1/16/2013

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Following our December 24th update concerning the SMART Act’s fast-tracking through Congress, and as part of our ongoing commitment to keep our clients informed of the latest developments concerning Medicare’s recovery rights under Secondary Payer rules, the Garretson Resolution Group (“GRG”) issues this follow‐up Client Advisory.

On January 10, 2013, President Obama signed HR 1845 into law, which included the Strengthening Medicare and Repaying Taxpayers (“SMART”) Act. As explained in our previous advisories, the SMART Act impacts two of the three Medicare Secondary Payer (“MSP”) components: repayment and reporting. The SMART Act is intended to improve the efficiencies of Medicare’s current recovery process for conditional payments made under the MSP statutes and regulations. Specifically, the SMART Act rewards those settling parties who take a proactive approach to addressing Medicare’s recovery interests in the beginning stages of settlement. By planning ahead, those settling parties will receive three key benefits: (1) the ability to make more informed pre-settlement decisions, (2) the option of a fast-tracked process in identifying and resolving Medicare’s recovery interests, and (3) the assurance that there will not be any post-settlement complications relating to MSP conditional payment reimbursement obligations.

The SMART Act’s key components align with GRG’s existing systems and processes which are built on GRG’s long-standing position that starting the resolution process early will yield more favorable results for all parties involved in a settlement. Below is a summary of each of these components, with a special emphasis on the first provision regarding electronic pre-settlement reporting and reimbursement.

Section 201 – Requires the Centers for Medicare and Medicaid Services (“CMS”) to maintain a secure web portal for settling parties to use as an “early warning system”: The SMART Act’s web portal creates an option whereby settling parties can notify CMS of an anticipated settlement, judgment, or other payment prior to settlement and to then efficiently resolve any Medicare repayment claims using the website following a specific process and timeline. For GRG’s clients who already utilize our electronic systems for verification and resolution of Medicare reimbursement claims, the secure web portal required by Section 201 creates a platform that will complement and integrate easily with GRG’s existing systems and processes. The web portal will complement GRG’s billing and coding, subject matter expertise, existing client-facing systems and other unique resources to help GRG serve its clients with even greater efficiency.

Timeline: CMS will have 9 months (October 10, 2013) from the date of enactment to issue final regulations to carry out Section 201. Similar to CMS’s implementation of Mandatory Insurer Reporting (Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007)(“MMSEA”), this process is likely to be phased in over a set period of time to allow for implementation changes.

The specific process required by Section 201 is illustrated below; noting that to take advantage of the fast-tracked resolution process, notification to Medicare must occur within 120 days of settlement, and the entire process must be completed within that timeframe:

SMART Act TimelineClick to View Larger

The implementation timelines for the remaining provisions are as follows:

Section 202: Reimbursement and Reporting Thresholds
Settlements/judgments/awards below the annual threshold amount (as set by the Secretary by Nov. 15th of each year) will not trigger reimbursement or Mandatory Insurer Reporting (“MIR”) obligations. The threshold does not apply to ingestion, exposure or implantation cases. This provision applies to years beginning in 2014. Therefore, the Secretary has to issue a cap report on November 15, 2014.

This provision applies to years beginning in 2014. Therefore, the Secretary has to issue a cap
report on November 15, 2014.

Section 203: MMSEA Reporting Penalties
The mandatory $1,000 per day penalty is now a permissive one. Within 60 days of enactment, the Secretary is to solicit proposals to identify criteria to determine how to implement this discretionary penalty provision for MIR. Once final regulations are issued, this provision would be effective. The Secretary has until March 11, 2013 to solicit proposals.

Within 60 days of enactment, the Secretary is to solicit proposals to identify criteria to determine how to implement this discretionary penalty provision for MIR. Once final regulations are issued, this provision would be effective. The Secretary has until March 11, 2013 to solicit proposals.

Section 204: Use of SSNs, HICNs Optional
Responsible Reporting Entities (RREs), most commonly the defendants/carriers, are no longer required to gather or report SSNs or HICNs. Within 18 months of enactment (by July 10, 2014), the Secretary is to modify the Sec. 111 MMSEA rules to permit, but not require, use of SSNs and/or HICNs to access records of, and report to, CMS. The Secretary may extend the modification deadline for one or more one year periods so long as patient privacy and/or the integrity of the MSP program are not at risk.

Within 18 months of enactment (by July 10, 2014), the Secretary is to modify the Sec. 111 MMSEA rules to permit, but not require, use of SSNs and/or HICNs to access records of, and report to, CMS. The Secretary may extend the modification deadline for one or more one year periods so long as patient privacy and/or the integrity of the MSP program are not at risk.

Section 205: 3 Year Statute of Limitations
The United States must file a complaint within 3 years following notice of a settlement/judgment/award provided as a result of MMSEA reporting. This 3 year statute of limitations applies to all actions brought and penalties sought on or after 6 months from date of enactment, which would be July 10, 2013.

This 3 year statute of limitations applies to all actions brought and penalties sought on or after 6 months from date of enactment, which would be July 10, 2013.

 

Now that the SMART Act has been signed into law, implementing the SMART Act following each Section’s unique timeline will present its own challenges. Many operational details will need to be identified and addressed to ensure that the Act’s intent – improved efficiencies – carries through to all settling parties.

In the meantime, implementing firm-wide formalized procedures to verify, resolve, and satisfy Medicare’s MSP interests continues to be the best way to move your cases forward. GRG will continue to keep you informed as CMS operationalizes the SMART Act’s provisions.

As a reminder, GRG provides two ways for you to obtain status reports for cases – (1) Contact your Client Service Manager; and / or (2) Log into our secure web portal by visiting www.garretsongroup.com, and selecting “Client Login”.