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ARC:HOW EMPLOYERS CAN AVOID POTENTIAL PITFALLS DEALING WITH MEDICARE LIENS AND SET-ASIDES

SMART Act interim rules spark criticism

Settlement of comp, liability claims slowed

SMART Act

As the Centers for Medicare and Medicaid Services prepares rules on Medicare Secondary Payer compliance, sources say CMS isn't working quickly enough to implement changes to ease workers compensation and liability claim settlements.

Observers say they're still hopeful that CMS will take the needs of insurers and self-insured employers into account during a 60-day comment period that ends Nov. 19 for the Strengthening Medicare and Repaying Taxpayers Act.

“We're concerned because it doesn't seem that what's been published is actually what was in the spirit of the SMART Act, and we certainly feel that we're going to have some input that we're going to want to provide,” said Michele Adams, chairwoman of the Medicare Advocacy Recovery Coalition in Washington. She also is director of claims management and business strategies for risk management services at Walt Disney World Resort in Orlando, Fla.

CMS published its interim final rule in late September to implement the SMART Act, which President Barack Obama signed into law in January. CMS requires insurers and self-insured employers to reimburse it for medical treatment it paid on behalf of workers comp and liability claimants, and the law is intended to simplify the process.

The law includes establishing a website to allow insurers and self-insureds to find out the final amount due to CMS before settling a claim.

Currently, settlement parties must request an interim demand letter from CMS, which estimates how much a claimant is expected to reimburse to Medicare. However, CMS does not provide a final demand for reimbursement until a settlement is official, and final demands sometimes are greater than the claimant and insurer expected initially.

Under the interim rule, Medicare beneficiaries will be able to access full claim and reimbursement information this year through mymedicare.gov. However, attorneys, insurers and employers will have limited access to such information until CMS develops a “multifactor authentication process” for the website to confirm their identities and protect the beneficiary's privacy.

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That authentication process would be implemented “no later than” Jan. 1, 2016, according to the interim rule.

Compliance experts hoped to have full access sooner, and say they're disappointed they will have only limited CMS information for now.

“It's been frustrating to think that the piece of it that is really going to help us has now been pushed out another ... two and a half years,” said Rita Wilson, CEO of Delray Beach, Fla.-based Medicare Secondary Payer compliance firm Tower MSA Partners L.L.C.

Payers could, however, request that claimants provide full information to help speed the claim resolution process, Ms. Wilson said.

Still, that process could be troublesome in cases where claimants are unwilling to provide Medicare information to payers, said Aaron Frederickson, director of Medicare Secondary Payer compliance at Allsup Inc. in Belleville, Ill.

The MARC Coalition's Ms. Adams agreed that the interim rule may put too much responsibility on claimants for Medicare Secondary Payer compliance.

“All of this work process is put (onto) the beneficiary, rather than having the plan (that's) ultimately going to end up being the payer being able to obtain information and hopefully resolve claims,” Ms. Adams said.

Experts also worry that CMS' interim rule extends how long the agency has to respond to requests for reimbursement information, delaying settlement times.

The SMART Act says claimants or payers can notify CMS of a settlement 120 days before the payment is expected to be finalized, which is intended to allow payers to get a final reimbursement demand from CMS and close the claim within 120 days.

However, the interim rule says a current requirement that CMS be notified of a settlement 185 days prior to finalization “encompasses” the 120 days. It also says the law allows CMS to extend its response by 30 days if needed.

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The interim rule says Medicare beneficiaries must submit their settlement information to CMS within 30 days of receiving the payment, at which point CMS will calculate a final demand for payment.

“We understand that providing settlement information within 30 days of the date of settlement may be challenging at times, but we would like to encourage beneficiaries and their attorneys or other representatives to assist us in providing swift resolutions to these matters and promote timely recoveries for Medicare,” the interim rule says.

Attorney David Farber, counsel for the Medicare recovery coalition, said the timing in the interim rule could extend CMS' resolution time in the SMART Act up to 245 days.

“We look forward to engaging with the agency to learn why their process does not seem to meet the statutory requirements for expedited resolution,” said Mr. Farber, a Washington-based partner with law firm King & Spalding L.L.P.

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