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The SMART Act: Cordially Referred to as the "Saving Me A lot of Ridiculous Time" Act

By Mike A. D'Amico1

On January 10, 2013, President Obama signed into law the "Strengthening Medicare and Repaying Taxpayers Act", otherwise known as the SMART Act. For tort and civil justice litigators, it more appropriately may be referred to as the "Saving Me A Lot of Ridiculous Time" Act.

We all have experienced the long and frustrating delays in getting any conditional payment amounts from CMS, let alone an accurate amount; and then of course added delay waiting for the almost never-to-be-received final demand letter. These delays have left injured claimants waiting months and at times more than a year for final disbursement of funds. In some cases insurance carriers have refused to issue the settlement check at all, or in large part, without a reasoned basis other than paranoia, until the final demand amount has been received. This left victims, their lawyers and the court dockets in limbo while CMS moved at a poisoned snail's pace.

The recent amendments to the SMART Act that AAJ worked tirelessly to consummate have changed the landscape of this colossal waste of time and hurtful delay. The extent to which the landscape will change will be left for all of us to see, but the hope is that the process of getting accurate conditional and final payment amounts will be time-limited and efficient.

Here is a summary of the most important changes in simple terms: (1) the claimant or representative may give notice to CMS of a reasonably expected date of resolution not more than 120 days prior.; (2) CMS has 65 days(or 95, if necessary, absent exceptional circumstances which exceptional circumstances are very limited) to respond to the notice and be sure the claims payment information posted on the website is current, known as the protected period; (3) after this protected period but not less than 3 days before the reasonably expected resolution date stated in the notice, a final demand amount may be downloaded. This may be obtained through the already existing, but improved, Medicare Secondary Payer Recovery Portal(https://www.cob.cms.hhs.gov/MSPRP/home) You must register to use this portal which takes several days to complete; (4) the claims payment information on the portal is to include the health care provider name, diagnosis code, treatments dates, the incident-related payments, conditional payment amounts and allow download of a statement of reimbursement amounts; (5) if there is a discrepancy in the portal information, the Act states that CMS provide a timely process to resolve the discrepancy under which the claimant must provide documentation to support the discrepancy, a proposed corrected amount and CMS has 11 days to respond. If CMS does not respond in 11 days then the proposed corrected amount shall be accepted by CMS. If CMS disagrees then an alternate proposal must be made(regulations relating to this process are due no later than September 10, 2013); (6) for small resolutions that do not exceed the CMS costs of collection there will be no mandatory reporting or reimbursement required which threshold amount will be published annually(effective January 1, 2014); (7) mandatory reporting can be done without social security numbers or health identification claim numbers(effective not later than June 10, 2014); and (8) and there is a 3 year statute of limitation from the date of notice of claim resolution for CMS to pursue reimbursement(effective June 10, 2013).

Admittedly, no legislative solution is ever perfect by virtue of its typical tortuous path of compromise. And there will be kinks to work out. I suspect one kink will be unanticipated settlement dates which don't fit neatly into the time frames set; or anticipated dates that have been set on short notice which likewise don't fit into these time frames. Nevertheless the improved portal should allow sufficient information for informed and reasonable proposals to protect the interests of Medicare, the liability carrier and the claimant so that settlements are not unnecessarily delayed. Reasonable minds in these circumstances must prevail.

In sum, the SMART Act has brought changes to the Medicare reimbursement process that have been long and sorely needed. Kudos to all those instrumental in its passage.

1Mike A. D'Amico is a partner in D'Amico & Pettinicchi, LLC in Watertown,CT. His practice is limited to plaintiff injury litigation. He participated in the SMART ACT draft commentary for AAJ.