A House panel today reported out legislation that wouldstreamline enforcement of the Medicare Secondary Paymentprogram.

The legislation, H.R. 1063, is the SMART Act, or TheStrengthening Medicare and Repaying Taxpayers Act.

The bill would clarify industry-reporting requirements underlegislation enacted in 2007, which requires reimbursement toMedicare for payments made to people who are also paid laterthrough workers' compensation or liability claims.

It also sets a three-year limitation period on the government'sability to bring a claim for repayment.

The bill was passed by voice vote by the House Energy andCommerce Committee. Its next stop is the House Ways and MeansCommittee for “sequential referral” to a committee with “concurrentjurisdiction.”

Given that both the House and Senate will recess Friday untilafter the November election, final action is unlikely before latefall.

However, prospects for the bill's passage by the end of the yearbrightened, since the bill has gained the support of the insuranceindustry, employers, and plaintiff lawyers. It was also rewrittenprior to last week's markup before a subcommittee to satisfy bothDemocrats and Republicans.

The bill is designed to fix problems in the originallegislation, the Medicare Secondary Payment Act, enacted in2007.

As expressed by Rep. Fred Upton, R-Mich., chairman of thecommittee, the legislation deals with the fact that many injuryclaims cannot be settled in a timely or conclusive manner becausethe Centers for Medicare and Medicaid Services must be reimbursedfor payments it has made for medical services to auto-accidentvictims or those covered by workers' compensation insurance.

Upton explains that, under current law, CMS is not requiredto—and therefore does not—provide the amounts either due or thatmust be set aside to cover future payments so that parties canresolve their Medicare obligations during settlement.

“As a result, party settlements are often delayed or settlementamounts placed in escrow until CMS can deliver a final amount—aprocess that can take years,” he said.

Melissa Shelk, vice president for federal affairs for theAmerican Insurance Association, says the bill will help improve andspeed up claims settlements for Medicare beneficiaries whilecontinuing to appropriately reimburse the Medicare trustfund.

“We remain hopeful that this legislation will be given furthercongressional consideration that will ultimately lead to itsadoption this year,” Shelk adds.

David Farber, a lawyer for the Medicare Advocacy RecoveryCoalition (MARC), notes that the bill won unanimous support, andthat Upton has “framed the bill as a sensible solution toperplexing MSP problems.”

Improvements in the handling of MSP claims imposed by thelegislation include:

Declaring that the claimant (or applicable plan) may request atany time, but only once beginning 120 days before the reasonablyexpected date of a settlement or award, a statement from theSecretary of Health and Human Services (HHS) for the conditionalreimbursement amount due the Medicare program.

Requiring HHS to set up a process whereby parties to asettlement can secure a final conditional payment amount to berepaid to the Medicare Trust Fund within 95 days of suchnotice.

Directing HHS to promulgate regulations for a right-of-appealfor final payment amounts.

Barring HHS from seeking payment of claims below the cost ofrecouping such payment (threshold to be determined by theSecretary).

Making discretionary the current civil monetary penalty for anapplicable plan's noncompliance.

Establishing safe harbors from the MSP reportingrequirements.