SMART ACT: A Ray of Hope on Medicare Lien Issues, 13 SCBJ, SC Lawyer, November 2013, #2

Author:Ken W. Harrell and Melissa A. Fried

SMART ACT: A Ray of Hope on Medicare Lien Issues

Vol. 25 Issue 3 Pg. 40

South Carolina Bar Journal

November, 2013

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0 Ken W. Harrell and Melissa A. Fried

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0Civil rights activist Fannie Lou Hamer’s tombstone is engraved with her most famous quote, “I’m sick and tired of being sick and tired.” Personal injury attorneys and clients who have wrestled with Medicare on lien issues over the past few decades have often felt the same way. Many attorneys have had to answer to clients who could not understand why it took several months, and sometimes years, to receive any net proceeds from their personal injury settlement. Attorneys have had to explain to their clients that they could not get a definitive answer from Medicare on a lien amount, especially in situations where a significant reduction was being sought on a hardship basis. Reportedly, some attorneys have grown so frustrated with Medicare that they have stopped accepting cases for clients who have Medicare coverage, just as some private medical practices refuse to accept patients covered by Medicare.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0The Medicare Secondary Payment Act has caused much confusion and many headaches for attorneys and beneficiaries over the years. When representing a Medicare beneficiary, attorneys have always had to consider whether Medicare has asserted a lien against their clients; however, unlike other health insurance liens, there was no reliable means of determining Medicare’s lien amount until after the client’s claim was resolved. Additionally, it took an interminably long time to receive a lien figure from Medicare. Calling Medicare directly and sitting on hold for an hour or more was commonplace.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0In an effort to alleviate much of the delay and confusion, President Obama signed into law the Strengthening Medicare and Repaying Taxpayers Act, more commonly referred to as the SMART Act on January 1, 2013.1 Mary Alice McLarty, president of the American Association for Justice (AAJ), described the SMART Act as “a practical solution that will streamline the Medicare Secondary Payer [(MSP)] system to ensure that seniors and persons with disabilities get timely assistance and taxpayers are repaid millions of dollars every year.”2 For attorneys representing Medicare beneficiaries, this summary probably sounds too good to be true. While time will tell whether that is the case, the SMART Act appears to be a step in the right direction. The SMART Act sets forth six improvements to the current Medicare system, all of which are outlined below.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA01. The SMART Act’s creation of the Medicare web portal

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0One of the highlights of the SMART Act is the creation of a website to process claim information, and, specifically, to help attorneys and claimants determine the final conditional payment amount prior to settlement.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0According to Sec. 201 of the SMART Act, the Secretary of Health and Human Services (HHS) must allow individuals to access information on claims that relate to a potential settlement, judgment, award or other payment. Attorneys must first obtain their client’s consent before accessing information on the web portal. Medicare is directed to update information on claims and payments on the Medicare portal no later than 15 days after a payment is made on behalf of a Medicare recipient. The SMART Act sets forth the type of information that is available to those who have access to the web portal such as provider or supplier names, diagnosis codes, dates of services, and conditional payment amounts. However, as of late September 2013, the only information being shown is the conditional lien amount and the final demand amount.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0The SMART Act also establishes procedures and timing for both claimants and Medicare to post information to the web portal. First, interested parties “may at any time beginning 120 days before the reasonably expected date of a settlement, judgment, award, or other payment, notify the Secretary that a payment is reasonably expected and the expected date of such payment.”3 Once notice is sent by interested parties, this begins what the SMART Act refers to as the “protected period.”4 The protected period gives Medicare 65 days to provide interested parties with a final conditional payment amount. However, Medicare may extend this protected period for an additional 30 days “if the Secretary determines that additional time is required to address claims for which payment has been made.”5


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