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DTCI: New Medicare reimbursement and reporting law

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By Nicholas C. Pappas and Jeffrey J. Mortier
 

Pappas_Nicholas.jpg Pappas
Mortier_JeffreyBW Mortier

On January 10, 2013, President Barack Obama signed into law the Strengthening Medicare and Repaying Taxpayers Act of 2012 (“SMART Act”). When finally implemented, the SMART Act should streamline settlement negotiations and provide more certainty to settlements involving Medicare beneficiaries.

The SMART Act will significantly modify Medicare’s Secondary Payer requirements to be more efficient, workable and user-friendly. Using a secure website, claimants, insurers and self-insureds should be able to obtain information about payments for which Medicare claims it is entitled to reimbursement and will be entitled to rely on that information when claims are paid (so long as proper notice is given). In addition, entities required to report payments to Medicare beneficiaries will likely be given some reprieve from the harsh penalties for noncompliance with Section 111’s reporting requirements when good-faith efforts are made to report a potential third-party claim.

Key elements of the SMART Act include:

(1) Medicare must provide claimants, insurers and self-insureds with access to a secure website that contains information relating to payments made by Medicare that may be subject to reimbursement from any potential settlement, judgment, award or other payment.

(2) Claimants, insurers and self-insureds may give notice to Medicare of a potential settlement, judgment, award or other payment within 120 days of the potential settlement, judgment, award or other payment. Medicare then has 65 days to provide its reimbursement amount. If proper notice is provided, the claimants, insureds and self-insureds that have obtained consent of the claimant then may rely on the last statement of reimbursement amount downloaded from the Medicare website so long as the statement was downloaded within three business days before the date of the settlement, judgment, award or other payment. The amount downloaded is then considered the “final conditional amount” subject to recovery by Medicare.

(3) Claimants who believe there is a discrepancy in the final conditional payment amount may provide documentation to Medicare explaining the discrepancy. Medicare then must respond to the discrepancy within 11 days. However, this discrepancy process does not take the place of a formal appeals process and the Act requires Medicare to promulgate regulations establishing an appeals process.

(4) Medicare must establish thresholds for both conditional payments and Section 111 reporting. The thresholds are designed to prevent Medicare from expending more money in collection efforts than it stands to receive on a given claim. The thresholds are to be established on Nov. 15 of each year beginning in 2014.

(5) Section 111’s per diem failure to report penalty is now discretionary, as Medicare “may” subject a claim to “a civil penalty of up to $1,000 for each day of noncompliance.” In addition, Medicare must give notice of proposed regulations in which sanctions will not be imposed for non-reporting, including when good-faith efforts to report have been undertaken.

(6) Within 18 months of the enactment of the Act, Medicare must modify Section 111’s reporting requirements so that Social Security account numbers and health identification claim numbers are not required.

(7) A three-year statute of limitations for Medicare Secondary Payer actions is established.

In order to take full advantage of the law, it will be important to notify Medicare in advance of settlement conferences and mediations, to obtain consents from claimants to access information on the amounts claimed by Medicare, and to download the final conditional payment amount within three days of any settlement conference or mediation.•

Mr. Pappas and Mr. Mortier serve as National Medicare Reporting Coordinating Counsel at Frost Brown Todd LLC in Indianapolis. Both are members of DTCI. The opinions expressed in this article are those of the authors.

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  1. So that none are misinformed by my posting wihtout a non de plume here, please allow me to state that I am NOT an Indiana licensed attorney, although I am an Indiana resident approved to practice law and represent clients in Indiana's fed court of Nth Dist and before the 7th circuit. I remain licensed in KS, since 1996, no discipline. This must be clarified since the IN court records will reveal that I did sit for and pass the Indiana bar last February. Yet be not confused by the fact that I was so allowed to be tested .... I am not, to be clear in the service of my duty to be absolutely candid about this, I AM NOT a member of the Indiana bar, and might never be so licensed given my unrepented from errors of thought documented in this opinion, at fn2, which likely supports Mr Smith's initial post in this thread: http://caselaw.findlaw.com/us-7th-circuit/1592921.html

  2. When I served the State of Kansas as Deputy AG over Consumer Protection & Antitrust for four years, supervising 20 special agents and assistant attorneys general (back before the IBLE denied me the right to practice law in Indiana for not having the right stuff and pretty much crushed my legal career) we had a saying around the office: Resist the lure of the ring!!! It was a take off on Tolkiem, the idea that absolute power (I signed investigative subpoenas as a judge would in many other contexts, no need to show probable cause)could corrupt absolutely. We feared that we would overreach constitutional limits if not reminded, over and over, to be mindful to not do so. Our approach in so challenging one another was Madisonian, as the following quotes from the Father of our Constitution reveal: The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse. We are right to take alarm at the first experiment upon our liberties. I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations. Liberty may be endangered by the abuse of liberty, but also by the abuse of power. All men having power ought to be mistrusted. -- James Madison, Federalist Papers and other sources: http://www.constitution.org/jm/jm_quotes.htm RESIST THE LURE OF THE RING ALL YE WITH POLITICAL OR JUDICIAL POWER!

  3. My dear Mr Smith, I respect your opinions and much enjoy your posts here. We do differ on our view of the benefits and viability of the American Experiment in Ordered Liberty. While I do agree that it could be better, and that your points in criticism are well taken, Utopia does indeed mean nowhere. I think Madison, Jefferson, Adams and company got it about as good as it gets in a fallen post-Enlightenment social order. That said, a constitution only protects the citizens if it is followed. We currently have a bevy of public officials and judicial agents who believe that their subjectivism, their personal ideology, their elitist fears and concerns and cause celebs trump the constitutions of our forefathers. This is most troubling. More to follow in the next post on that subject.

  4. Yep I am not Bryan Brown. Bryan you appear to be a bigger believer in the Constitution than I am. Were I still a big believer then I might be using my real name like you. Personally, I am no longer a fan of secularism. I favor the confessional state. In religious mattes, it seems to me that social diversity is chaos and conflict, while uniformity is order and peace.... secularism has been imposed by America on other nations now by force and that has not exactly worked out very well.... I think the American historical experiment with disestablishmentarianism is withering on the vine before our eyes..... Since I do not know if that is OK for an officially licensed lawyer to say, I keep the nom de plume.

  5. I am compelled to announce that I am not posting under any Smith monikers here. That said, the post below does have a certain ring to it that sounds familiar to me: http://www.catholicnewworld.com/cnwonline/2014/0907/cardinal.aspx

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