Medicare Payments

The Strengthening Medicare and Repaying Taxpayers Act (SMART), which addresses administrative delays by the Centers for Medicare and Medicaid Services that prevented injured people from receiving secondary payer compensation until Medicare was reimbursed for its costs, is now law.

Through the streamlined process created in the act, the Medicare Secondary Payer system will be promptly reimbursed for medical costs that are the responsibility of a third party, usually an insurance company, during the course of civil litigation. The new procedures are expected to reduce recovery delays that in some cases had lasted for years.

The act addresses the delayed reimbursement issue with several key provisions. It requires that CMS maintain a secure portal for patients to access claims and reimbursement status, and it imposes deadlines for CMS to process the payments. For instance, Medicare beneficiaries must report a potential settlement no more than 120 days in advance and, once notified, CMS has 65 days to ensure that its Web portal is current.

This is great news for plaintiffs. Until now, reimbursing Medicare for payments made on accident cases would sometimes take months and dozens of phone calls and letters. And when you call, it often takes more than thirty minutes before you speak to anyone. An online portal will make the whole process much easier.

I had a case drag on for nearly a year after a settlement was reached because of issues related to Medicare reimbursement. CMS was claiming that they were owed money for treatment caused by a separate car accident my client was involved in (for which she was at fault) six months after the one I represented her for. Even after showing a police report for the second wreck, they still claimed that they were owed money from the first settlement. I was finally able to get the unrelated charges off after speaking getting sworn affidavits from my client’s medical providers to prove that the charges were related to the second wreck.

The act also provides an expedited mechanism for Medicare beneficiaries to report discrepancies in CMS data, adjusts penalty provisions against insurance companies for reporting errors, and imposes stricter privacy safeguards by eliminating the use of medical claim and Social Security numbers. Another mandate is that CMS establish a break-even point for Medicare recoveries when the recovery cost and value of the claim are equal–the point at which the cost to recover a Medicare claim equals the value of the Medicare claim. It also applies a three-year limit for CMS to seek repayments from beneficiaries, a provision plaintiff attorneys see as providing more certainty and finality in the reimbursement process.

The Medicare Secondary Payer Act guarantees that Medicare does not pay medical bills that are the primary responsibility of a third party. The SMART Act amends the Medicare Secondary Payer Act to streamline and improve the reimbursement process.

Section 201 (Calculating a Final Conditional Payment Amount & Appeals)

CMS is required to maintain a secure web portal with access to claims and reimbursement information. The web portal must meet the following requirements:

• Payments for care made by CMS must be loaded into the portal within 15 days of the payment being made.
• The portal must provide supplier or provider names, diagnosis codes, dates of service and conditional payment amounts.
• The portal must accurately identify that a claim or payment is related to a potential settlement, judgment or award.
• The portal must provide a method for receipt of secure electronic communications from the beneficiary, counsel or the applicable plan.
• Information transmitted from the portal must include an official time and date of transmission.
• The portal must allow parties to download a statement of reimbursement amounts.

The SMART Act requires parties to notify CMS of when they reasonably anticipate settling a claim (any time beginning 120 days before the settlement date). CMS then has 65 days to ensure the portal is up to date with all of the appropriate claims data. CMS can have an additional 30 days on top of the 65 days to update the portal if necessary. At the expiration of the 65 and potentially the 30 day periods, the parties may download a final conditional payment amount from the website. The final conditional payment amount is reliable as long as the claim settles within 3 days of the download.
CMS is required to provide a timely process to resolve any discrepancies regarding the amount to be reimbursed. An individual can provide the Agency documentation to establish that the web portal is not reflecting an accurate reimbursement amount. CMS is required to respond to this documentation within 11 business days. If CMS does not make a determination within 11 days, the reimbursement amount as calculated by the beneficiary becomes the final conditional payment amount.

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