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The Politics of Health Care

SMART Act Puts Deadlines on Settlement Money

Published January 29, 2013 11:56 AM by Michael LaMagna
A little known law is about to have a pretty big impact on Medicare beneficiaries who find themselves victims of negligence and wait for their settlement money. Currently when a Medicare beneficiary has a lawsuit and receives a monetary judgment or settles out of court and Medicare has paid the related medical bills, that person is required to wait until Medicare is reimbursed before receiving the proceeds of that lawsuit. Currently, it can take months or even years just for Medicare to provide you with the amount they are due reimbursement.

The new law, the Strengthening Medicare and Repaying Taxpayers (SMART) Act, sets time frames for CMS and Medicare beneficiaries to provide information in cases where a settlement is expected. Under the SMART law, a beneficiary must notify CMS within 120 days of the lawsuit settlement. CMS then has 65 days to tell the parties how much is owed. The agency can request an additional 30 days if necessary. Moreover, if beneficiaries believe the amount posted is wrong, they can provide documentation to CMS, and the agency has 11 days to respond. The law also limits to 3 years the time CMS has to pursue reimbursement.

The previous system not only would cause delays in the settlement process, but affected whether or not a case would even go forward, as most attorney's want the information regarding the Medicare figure prior to taking a case. Moreover, if a case is expected to go to mediation and the mediator doesn't have accurate numbers, a decision cannot be reached.

In addition, the slow reporting process didn't allow for the famous ever-dwindling Medicare Trust Fund to get promptly repaid. In 2011, more than 480,000 new cases were recorded, and CMS realized more than $860 million in payments and savings related to such cases, many months or years longer than they could have. It is expected that the new law will allow for more timely reimbursement. However, with the new time frames, I could foresee a situation where Medicare foregoes its right to be paid back altogether, if they do not pursue reimbursement within 3 years.

This article is provided for informational purposes only. Nothing in this article shall be construed as legal advice or should be relied upon as such. Michael LaMagna is a partner at The Law Office of LaMagna & Associates, PC, practicing Health Care Regulatory, Elder/Probate/Disability/Trusts and Estates, Social Security and General Legal practice in both New York and Connecticut. Email him at Mlamagna@nyandctlaw.com, call him at 914-534-1048 or visit www.nyandctlaw.com for more information. You can also follow Attorney LaMagna on Twitter@michaellamagna1.

posted by Michael LaMagna


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