On February 27, 2015, CMS issued a final rule in the Federal Register that implements a required provision of the Strengthening Medicare and Repaying Taxpayers Act (the SMART Act). This provision establishes a formal right of appeals process for applicable plans regarding conditional payments.
This new appeals process applies to initial CMS determinations issued on or after April 28, 2015 where CMS is pursuing conditional payment recovery from applicable plans. Instead of adopting a new process, this new rule adopts the same multilevel appeals process for applicable plans that is currently allowed for conditional payment recovery claims from beneficiaries.
This multilevel appeals process for applicable plans includes these steps:
- A redetermination by the contractor issuing the recovery demand
- A reconsideration by a Qualified Independent Contractor (QIC)
- An Administrative Law Judge (ALJ) hearing.
- A review by the Departmental Appeals Board’s (DAB) Medical Appeals Council (MAC)
- An eventual judicial review
For further analysis see the notice in the February 27, 2015 Federal Register.
In accordance with Section 204 of the Strengthening Medicare and Repaying Taxpayers Act of 2012 (SMART Act), the Centers for Medicare and Medicaid Services (CMS) has issued an Alert that allows Responsible Reporting Entities (RREs) to report partial Social Security numbers to CMS.
Specifically, effective January 5, 2015, when a Non-Group Health Plan (NGHP) cannot obtain Medicare beneficiaries Health Insurance Claim number (HICN) or full Social Security number (SSN), they may instead report the following information instead to enable CMS to properly identify a Medicare Beneficiary:
- Last five digits of SSN
- First initial
- Date of Birth and
If NGHP RREs are unable to obtain or do not provide the HICN, full SSN, or any of the above listed data elements, they must document their attempts to obtain this information.
On September 20, 2013, the Centers for Medicare and Medicaid Services (CMS) published an “interim final rule with comment period” in the Federal Register to comply to Section 201 of the Strengthening Medicare and Repaying Taxpayers Act of 2012 (the SMART Act).
This interim rule adds new regulations at 42 CFR 411.39, which states that by January 1, 2016, the CMS will implement a fully functional web portal that will enable a beneficiary (or their attorney, other representative, or applicable plan) to obtain dates of services, provider names, diagnostic codes, dates of service and final conditional payment amounts. Also, it will add additional functionality to the web portal, permitting users to notify CMS that the specified case is approaching settlement, obtain time and date-stamped final conditional payment summary forms, and insure that relatedness disputes and other discrepancies are addressed within 11 business days of receipt of dispute documentation.
Interestingly, CMS waived its normal “notice and comment” rulemaking approach, stating that it was not in the public’s best interest and would delay public access to the web portal. This process would have provided “proposed” regulations, followed by a comment period, and then final regulations. Instead, CMS chose to use the “interim final rule with comment period” approach, which allows 90 days for public comments, but implements final regulations on November 19, 2013, regardless of comment.
To view the interim final rule with comment period as it appeared in the Federal Register, click here.
Michelle Taylor v. General Electric pits the plaintiff’s desire to protect their private information against the defendant’s requirement to report that private information to the government as part of an insurance settlement. The issue in this case was must the claimant provide the insurer her social security number (SSN) so the defendant can settle the claim and report the settlement under Section 111, the mandatory insurer reporting provisions of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA).
After an extensive legal analysis, the U.S. magistrate judge recommended to the U.S. District Court for the Eastern District of Pennsylvania that the plaintiff’s motion to enforce the settlement be denied. Basically, the magistrate judge concluded that the lack of a SSN disclosure provision in the settlement agreement constituted a material term of the settlement that was never agreed upon, and that the law does not allow him to enforce a contract where essential matters are left open.
Interestingly, the SMART bill, signed by President Obama on January 10, 2013, deals with this problem of plaintiffs not wanting to disclose SSNs in settlements when SSNs are required by the insurer to comply with Section 111 mandatory insurer reporting requirements of MMSEA. The SMART bill’s solution is to give the government 18 months, with a one-year extension, to modify the reporting requirements so that reporting the SSN is not required.
For me, I would give an insurance company my SSN in exchange for a check rather than pay my attorneys to go to court. Medicare has my SSN anyway. But that’s just me. Also, I always thought that the answer to the SSN issue is to do the same thing the IRS does with 1099s. If the plaintiff won’t give the insurer their social security number, check a box that says the claimant is refusing to disclose their SSN and that box will get reported to Medicare as part of Section 111 reporting.
To view Michelle Taylor v. General Electric click here
To view the SMART Bill, H.R. 1845 click here
To view previous Medivest blog about H.R. 1845 click here
Today, President Obama signed the Strengthening Medicare and Repaying Taxpayers (Smart) Act into law as part of H.R. 1845. This bill represents one of the most significant changes in the Medicare Secondary Payer (MSP) conditional payment recovery process since the MSP Statue was enacted in 1981.
The SMART bill is the result of over four years of effort from the Medicare Advocacy Recovery (MARC) Coalition, which represents virtually every group of stakeholders impacted by the Medicare Secondary Payer (MSP) statute. The Congressional Budget Office estimated that the SMART Act would save Medicare $45 million from 2013-2022 by making it easier for payers to reimburse Medicare.
The Smart Act amends the Medicare Secondary Payer Statue by adding a new clause at the end of the existing statute that provides for the following:
- Section 201 – Expedited Repayment, Web Portal and Right of Appeal. This section requires CMS to maintain and make available a timely updated website so settling parties can determine how much is owed to CMS for conditional payments, during the settlement process. It also requires CMS to provide a timely appeals process and to promulgate related regulations, if the settling parties believe there is a discrepancy in the conditional payment statement.
- Section 202 – Threshold. Establishes that an actuarial single threshold amount be set for exemption from conditional payment reimbursement, where the expected recovery amount is less than the cost to recover.
- Section 203 – Section 111 Penalties. Makes the $1,000 per day Mandatory Insurer Reporting (MIR) non-reporting penalty prevision discretionary by changing the statutory language from “shall be subject” to “may be subject to”. Also, this section requires CMS to publish formal regulations specifying situations where the penalty will not be imposed due to good faith efforts to comply.
- Section 204 – Social Security Number. Directs CMS to modify the MIR reporting requirements so that reporting of social security numbers are not required.
- Section 205 – Statute of Limitations. Creates a three-year statute of limitations for conditional payment recovery actions brought by the government.
There are many details to follow as CMS promulgates regulations and establishes a Website portal. We will certainly keep you informed as news develops.
This evening, the U.S. Senate passed Smart Act by unanimous consent.
“We are delighted that the Senate has approved the legislation,” said Roy Franco , Co-Chair of MARC, and Chief Legal Officer of Franco Signor , representing the MSP efforts of Safeway. “We particularly appreciate the leadership of Senators Wyden and Portman on this legislation, which will streamline the Medicare process for tens of thousands of Medicare beneficiaries, and will restore millions to the Medicare Trust Fund faster,” he stated.
The U.S. House of Representatives passed the legislation on December 19th. The Smart Act now goes to the President Obama for signature.
To view the MARC Coalition press release click here.
On December 19th, by a vote of 401 to 3, the U.S. House of Representatives, on a motion to suspend the rules, passed the Strengthening Medicare and Repaying Taxpayers (SMART) Act. The SMART Act was introduced in March 2011 as H.R. 1063 by Dr. Tim Murphy (R-PA) and Ron Kind (D-WI). In a procedural effort to move the bill to the House floor for a vote, the SMART Act was included in H.R. 1845, dealing with Medicare coverage for in-home intravenous immune globulin (IVIG) treatment. A motion to suspend the rules is a procedure used by the House to quickly pass non-controversial bills.
The SMART Act has broad bi-partisan support in Congress and wide industry support. The Medicare Advocacy Recovery Coalition (MARC), which is the main driving force behind the SMART Act claims that the legislation will “significantly improve the efficiency of the current Medicare Secondary Payer (MSP) system and speed repayment of amounts owed from Medicare beneficiary claims directly to the Medicare Trust Fund.” Specifically, the MARC coalition says that the bill will:
- “Require CMS to issue a demand BEFORE a settlement, judgment or award in certain liability claims;
- Establish a 3-year statute of limitations
- Abolish the use of SSN for Section 111 Reporting
- Establish a right of appeal for insurance companies and self-insureds
- Soften Section 111 penalties giving HHS discretion when it issues such penalties
- Establish annual minimum thresholds for Section 111 reporting, where the cost to HHS is greater than the recovery.”
Medivest strongly supports the SMART Act and congratulates the MARC Coalition for their dedicated efforts to get this bill passed by the House. The bill will now move over to the Senate for consideration.
To view H.R. 1845 click here.
To view the MARC press release click here.
To view the Congressional Record discussions on H.R. 1845 click here.
Yesterday, the Strengthening Medicare and Repaying Taxpayers Act of 2011 (SMART Act, for short) passed the House Energy and Commerce Subcommittee on Health. The bill, as amended, passed by unanimous vote.
This is a big step forward, however the bill still has a long way to go before becoming law. The bill, with amendments, now heads to the Congressional Budget Office for scoring then back to the full Energy and Commerce Committee for a vote.
We will keep you informed and provide you with an analysis of the amendments as soon as that information is released.
To view Congressman Tim Murphy’s September 11, 2012 press release click here.
The Senate version of the Strengthening Medicare And Repaying Taxpayers (SMART) Act of 2011 was introduced in the U.S. Senate, as S. 1718, on October 17, 2011. Sponsored by Senators Ron Wyden (D-OR), Rob Portman (R-OH), Ben Nelson (D-NE) and Richard Burr (R-NC), the SMART Act now has bi-partisan support from both the Senate and the House. The House version of the SMART Act was introduced, as H.R. 1063 on March 11, 2011.
The Medicare Advocacy Recovery Coalition (MARC), the main driving force behind this legislation, states that the purpose of the bill is to “significantly improve the efficiency of the current Medicare Secondary Payer (MSP) system and speed repayment of amounts owed from Medicare beneficiary claims directly to the Medicare Trust Fund”.
Whether the SMART Act will be passed or not is anybody’s guess. It does have considerable and broad support in Congress and industry. However, Congress does seem to have its hands full with a few other pressing matters. One thing is for certain: The MSP program needs improving. The SMART Act, recent congressional hearings, the GAO’s involvement, and recent CMS improvements are all moving us in the right direction.
We will keep you informed as new developments arise.
To view the U.S. Senate press release, click here.
To view the previous Medivest blog on H.R. 1063, click here.
On September 6, 2011, the Medicare Secondary Payer Recovery Contractor (MSPRC) announced that Medicare has implemented a $300 threshold for certain liability cases.
The announcement states that Medicare will not recover against a beneficiary’s lump sum settlement, judgment, award or other payment if the following conditions are met:
- The beneficiary’s settlement, judgment, award or other payment claims/releases a physical trauma-based incident/injury/accident/illness. (This does not include alleged ingestion, implantation or exposure-based incident/injury/accident/illness).
- The beneficiary obtains a liability insurance (including self- insurance) settlement, judgment, award, or other payment for a Total Payment Obligation to Claimant (TPOC) of $300 or less.
- There are no multiple settlements, judgments, awards or other payments for the same underlying claim, which total more than $300.
- A demand has not been issued.
The MSPRC protects the Medicare Trust fund, under the authority of the Medicare Secondary Payer (MSP) Act, by identifying and recovering Medicare conditional payments that Medicare made when another entity had primary responsibility.
This is an important development because this is the first time that Medicare has announced a threshold for conditional payment recovery. It seems that this threshold is in response to a similar position in the widely supported SMART bill that it is not cost-effective for Medicare to pursue very low dollar conditional payment recoveries. The need for a threshold was also mentioned in recent congressional hearings.
To view the MSPRC announcement click here
To view the previous Medivest blog regarding the SMART Bill click here
To view the previous Medivest blog regarding congressional hearings click here
On March 15, 2011, H.R. 1063, the Strengthening Medicare and Repaying Taxpayers Act of 2011 (SMART ACT) was introduced in the 112th Congress by Congressman Tim Murphy (R-PA) and Congressman Ron Kind (D-WI). This bill is supported by the Medicare Advisory Recovery Coalition (MARC) and is very similar to H.R. 4797 introduced on March 9, 2010.
MARC states that this legislation will, “significantly improve the efficiency of the current Medicare Secondary Payer (MSP) system and speed repayment of amounts owed from Medicare beneficiary claims directly to the Medicare Trust Fund”.
In summary, this bill proposes the following amendments to the Conditional Payments section (42 U.S.C 1395y(b)(2)(B)), the Mandatory Insurer Reporting section (42 U.S.C 1395y(b)(8)), and adds a new section (42 U.S.C 1395y(b)(9)) to the Medicare Secondary Payer Statue:
Section 2 – Expediting Secretarial Determination Of Reimbursement Amount To Improve Program Efficiency
- First request within 120 days – A claimant or applicable plan can make a request for conditional payment statement within 120 days of a reasonably expected settlement.
- Response within 65 days – The Secretary* must respond to the request within 65 days of first request.
- 2nd Request – If the Secretary fails to respond to the first request a second request for conditional payment can be made.
- Failure to respond within 30 days – If the Secretary doesn’t respond to the second request within 30 days, the responsible parties are not liable to reimburse the Secretary for the conditional payment (with some exceptions to be determined later by regulation)
- If settlement doesn’t occur – within 120 days, the Secretary is exempt from the time requirements above.
- Appeal process – The Secretary shall issue regulations establishing a right of an appeals process for the Secretary’s determination of a Conditional Payment amount.
Section 3 – Fiscal Efficiency And Revenue Neutrality
- Minimum dollar threshold – The Secretary will establish a minimum threshold dollar amount, below which, conditional payment reimbursement and Mandatory Insurer reporting will not be required.
- Ongoing responsibility for medicals (ORM) – For purposes of computing the minimum dollar threshold and conditional payment reimbursement the payment is defined as only the cumulative value medical payments made and the purchase price of any structured annuity.
Section 4 – Reporting Requirement Safe Harbors
- $1,000 per day penalty – Changes the terminology used to define MIR violation fines from “shall be subject” to “may be subject”.
- Good faith exceptions – after enactment of this bill the Secretary must publish “good faith” exceptions to the $1,000 non-reporting penalty after soliciting proposals and public comment.
Section 5 – Use Of Social Security Numbers And Other Identifying Information In Reporting.
- SSNs not required – Within one year the Secretary shall modify the MIR reporting requirements so that an applicable plan is not required to report a claimant’s social security number.
Section 6 – Statute Of Limitations
- A 3 year statute of limitations – will apply for conditional payment and MIR actions
*The term “Secretary” in this bill and the current statute refers to the Secretary of the US Department of Health and Human Services (HHS), which oversees its Division of Medicare and Medicaid Services (CMS), which oversees the federal Medicare health insurance program
To view the bill text for H. R. 1063, click here.