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President Obama Signs Medicare Secondary Payer Reforms Into Law

Source: BestWire

Posted on 14 Jan 2013 by Neilson

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Medicare reformPresident Barack Obama handed the U.S. insurance industry a victory by signing legislation designed to make the Medicare Secondary Payer system more efficient. Industry trade groups came out in support of the Medicare IVIG Access and Strengthening Medicare and Repaying Taxpayers Act, saying it would help to eliminate delays in settling claims.

Under the existing Medicare Secondary Payer system, insurers, retailers and third parties must repay Medicare if their negligence leads to medical bills for a senior citizen. However, critics inside and outside the insurance industry have said the current system delays the Centers for Medicare and Medicaid Services' review process for workers' compensation Medicare set-asides.

A Medicare set-aside is an allocation for future workers' compensation medical expenses that is reserved for claimants at or close to reaching retirement age. The set-aside is typically created during the settlement process in workers' compensation cases. Critics have said the system already in place is complicated and riddled with bureaucratic problems, which prevents cases from being closed while also failing to bring in money owed to the Medicare Trust Fund.

Supporters say the SMART Act will fix those problems by requiring Medicare to provide parties to these kinds of cases with accurate information about the total cost of medical bills when the parties announce a settlement is near. Without coming to a settlement, Medicare cannot recoup the money and beneficiaries may be left footing the bill, they argue.

U.S. Rep. Tim Murphy, R-Pa., and Rep. Ron Kind, D-Wis., the chief sponsors of House version of the SMART Act, said the new law could collect between $1 billion and $4 billion annually, while saving the Medicare agency hours of staff work pursuing claims of little or no value.

The industry has been pushing congressional leaders to move on Medicare secondary-payer reform legislation, arguing that it will help consumers, insurers and the federal government save time and money.

"The implications of this important piece of legislation are widespread and will be instrumental in replenishing the Medicare Trust Fund and avoiding the potentially high fines associated with these settlement processes," Carolyn Snow, RIMS board liaison to the society's government affairs committee.

Tom Litjen, vice president of federal government relations for the Property Casualty Insurers Association of America, also praised Congress for passing and Obama for signing the SMART Act into law.

Today's bill signing is a major victory for beneficiaries and taxpayers, as well as for the property/casualty insurance industry," Litjen said. "This legislation will bring much needed clarification in the Medicare Secondary Payer system reporting requirements and will improve the efficiency of the system by eliminating the costly delays in settling claims and providing funds to the beneficiaries in a more timely manner."