The Strengthening Medicare and Repaying Taxpayers (SMART) Act was signed into law in January 2013. The goal of the act is to make it easier for Medicare beneficiaries to comply with the Medicare Secondary Payer (MSP) process and to simplify some aspects of the MMSEA mandatory reporting. The SMART act allows beneficiaries easier and more timely access to Medicare lien amounts, limits CMS’s requirement for reporting fines, establishes annual nuisance thresholds for reporting, and caps CMS’s statue of limitations for recovery.

As a corporate entity that is subject to MMSEA reporting under the “self insured” requirements, the 5 main changes this act will provide are as follows.

1. Request for Conditional Payments (This process is supposed to be implemented within 9 months of the Act’s enactment (October 2013) however, may be delayed due to the recent government shutdown.
   • Within 120 days in advance of a potential settlement, the beneficiary can inquire from CMS of the total lien amount owed. CMS is required, in most instances, to respond within 65 days via a document that can be downloaded from a website.
   • This document will be date stamped and the amount listed can be considered the “final demand” from CMS for 3 business days. If a settlement isn’t reached within 3 business days of downloading the document, beneficiaries will need to re-request the letter and re-download.
2. New Statue of Limitations – 3 years
   • CMS will have only 3 years to seek recovery of funds to satisfy the final lien from beneficiaries/RREs after “notice” is given to CMS of the settlement. It isn’t quite clear what “notice” constitutes if that is the actual mandatory reporting to CMS or the request for the final demand letter.
   • This change is scheduled to take effect 6 months after enactment, around July 2013.
3. Threshold Changes
   • The reporting threshold for settlements starting October 1st is $2,000 (these settlements will be reported in the January/1st it inhibits some clients from trying to bulk settle many nuisance cases since the incentive to settle isn’t there for the plaintiffs; and reporting settlements to CMS can cost the self-insured corporation, the plaintiff and CMS more in equivalent time/fees than the settlement was actually worth.
   • The SMART Act aims to create a threshold each annual period beginning in November 2014 as established by the department of health and human services. This threshold is supposed to represent the cost of recovery that CMS will incur on collecting an average claim.
4. Fines for non-compliance
   • The SMART Act has modified the language in MMSEA allowing for fines to be subjective instead of “mandatory”. The goal is that CMS will not attempt to recover fines from an RRE that is making good-faith attempts to report accurately and correctly.
5. SSN’s no longer required
   • While CMS has yet to establish how it will handle identifying individuals without the SSN, beginning 18 months after the enactment date, CMS will no longer require this information. CMS has the ability to delay this implementation for up to an additional year so stay tuned for more updates over time.