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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. Applause, applause, applause ..... but, is this duty to serve the constitutional order not much more incumbent upon the State, whose only aim is to be pure and unadulterated justice, than defense counsel, who is also charged with gaining a result for a client? I agree both are responsible, but it seems to me that the government attorneys bear a burden much heavier than defense counsel .... "“I note, much as we did in Mechling v. State, 16 N.E.3d 1015 (Ind. Ct. App. 2014), trans. denied, that the attorneys representing the State and the defendant are both officers of the court and have a responsibility to correct any obvious errors at the time they are committed."

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  4. Our nation produces very few jurists of the caliber of Justice DOUGLAS and his peers these days. Here is that great civil libertarian, who recognized government as both a blessing and, when corrupted by ideological interests, a curse: "Once the investigator has only the conscience of government as a guide, the conscience can become ‘ravenous,’ as Cromwell, bent on destroying Thomas More, said in Bolt, A Man For All Seasons (1960), p. 120. The First Amendment mirrors many episodes where men, harried and harassed by government, sought refuge in their conscience, as these lines of Thomas More show: ‘MORE: And when we stand before God, and you are sent to Paradise for doing according to your conscience, *575 and I am damned for not doing according to mine, will you come with me, for fellowship? ‘CRANMER: So those of us whose names are there are damned, Sir Thomas? ‘MORE: I don't know, Your Grace. I have no window to look into another man's conscience. I condemn no one. ‘CRANMER: Then the matter is capable of question? ‘MORE: Certainly. ‘CRANMER: But that you owe obedience to your King is not capable of question. So weigh a doubt against a certainty—and sign. ‘MORE: Some men think the Earth is round, others think it flat; it is a matter capable of question. But if it is flat, will the King's command make it round? And if it is round, will the King's command flatten it? No, I will not sign.’ Id., pp. 132—133. DOUGLAS THEN WROTE: Where government is the Big Brother,11 privacy gives way to surveillance. **909 But our commitment is otherwise. *576 By the First Amendment we have staked our security on freedom to promote a multiplicity of ideas, to associate at will with kindred spirits, and to defy governmental intrusion into these precincts" Gibson v. Florida Legislative Investigation Comm., 372 U.S. 539, 574-76, 83 S. Ct. 889, 908-09, 9 L. Ed. 2d 929 (1963) Mr. Justice DOUGLAS, concurring. I write: Happy Memorial Day to all -- God please bless our fallen who lived and died to preserve constitutional governance in our wonderful series of Republics. And God open the eyes of those government officials who denounce the constitutions of these Republics by arbitrary actions arising out capricious motives.

  5. From back in the day before secularism got a stranglehold on Hoosier jurists comes this great excerpt via Indiana federal court judge Allan Sharp, dedicated to those many Indiana government attorneys (with whom I have dealt) who count the law as a mere tool, an optional tool that is not to be used when political correctness compels a more acceptable result than merely following the path that the law directs: ALLEN SHARP, District Judge. I. In a scene following a visit by Henry VIII to the home of Sir Thomas More, playwriter Robert Bolt puts the following words into the mouths of his characters: Margaret: Father, that man's bad. MORE: There is no law against that. ROPER: There is! God's law! MORE: Then God can arrest him. ROPER: Sophistication upon sophistication! MORE: No, sheer simplicity. The law, Roper, the law. I know what's legal not what's right. And I'll stick to what's legal. ROPER: Then you set man's law above God's! MORE: No, far below; but let me draw your attention to a fact I'm not God. The currents and eddies of right and wrong, which you find such plain sailing, I can't navigate. I'm no voyager. But in the thickets of law, oh, there I'm a forester. I doubt if there's a man alive who could follow me there, thank God... ALICE: (Exasperated, pointing after Rich) While you talk, he's gone! MORE: And go he should, if he was the Devil himself, until he broke the law! ROPER: So now you'd give the Devil benefit of law! MORE: Yes. What would you do? Cut a great road through the law to get after the Devil? ROPER: I'd cut down every law in England to do that! MORE: (Roused and excited) Oh? (Advances on Roper) And when the last law was down, and the Devil turned round on you where would you hide, Roper, the laws being flat? (He leaves *1257 him) This country's planted thick with laws from coast to coast man's laws, not God's and if you cut them down and you're just the man to do it d'you really think you would stand upright in the winds that would blow then? (Quietly) Yes, I'd give the Devil benefit of law, for my own safety's sake. ROPER: I have long suspected this; this is the golden calf; the law's your god. MORE: (Wearily) Oh, Roper, you're a fool, God's my god... (Rather bitterly) But I find him rather too (Very bitterly) subtle... I don't know where he is nor what he wants. ROPER: My God wants service, to the end and unremitting; nothing else! MORE: (Dryly) Are you sure that's God! He sounds like Moloch. But indeed it may be God And whoever hunts for me, Roper, God or Devil, will find me hiding in the thickets of the law! And I'll hide my daughter with me! Not hoist her up the mainmast of your seagoing principles! They put about too nimbly! (Exit More. They all look after him). Pgs. 65-67, A MAN FOR ALL SEASONS A Play in Two Acts, Robert Bolt, Random House, New York, 1960. Linley E. Pearson, Atty. Gen. of Indiana, Indianapolis, for defendants. Childs v. Duckworth, 509 F. Supp. 1254, 1256 (N.D. Ind. 1981) aff'd, 705 F.2d 915 (7th Cir. 1983)

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