House Passes Industry-Supported Medicare Secondary Payment Bill

The House Wednesday passed legislation sought by the insurance industry in three Congresses that would streamline enforcement of the Medicare Secondary Payment program.

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

It was passed as Title II of H.R. 1845, legislation to provide for a study on issues relating to access to intravenous immune globulin (IVIG) for Medicare beneficiaries.  The House passed H.R. 1845 by a vote of 401-3.

Rep. Tim Murphy, R-Pa., and Rep. Ron Kind, D-Wis., introduced the bill in the House this year.

Similar bills have been introduced in prior congresses, and hearings have been held in the House where officials of both the Centers for Medicare and Medicaid Services and the industry discussed the issues raised by hurried passage of a bill in 2007 that required reimbursement to Medicare for payments made to people who are also paid later through workers’ compensation or liability claims.

This latest bill seeks to ease the compliance requirements for the 2007 legislation, making it easier for insurers to repay Medicare, officials say.

According to officials of the Property Casualty Insurers Association of America, the SMART Act finally passed the House because it has been scored by the Congressional Budget Office as saving the government $45 million over 10 years.

Tom Litjen, PCI vice president of federal government relations, says the next step is persuading the Senate to pass H.R. 1845 under unanimous consent rules in the waning days of the current Congress.

At the same time, Litjen said PCI had not given up hope that Congress could also deal this year with similar legislation, H.R. 5284, the Medicare Secondary Payer and Workers’ Compensation Settlement Agreements Act of 2012.

That bill, introduced earlier this year in the House by Rep. Dave Reichert, R-Wash., and Rep. Mike Thompson, D-Calif., deals only with workers’ compensation claims. It seeks to improve the handling of workers’ comp claims for those with Medicare by establishing clear and consistent rules for workers’ compensation set-asides.

Currently, workers’ compensation claims that overlap with Medicare coverage are subject to a lengthy, cumbersome review by CMS to establish the proper “set-side” coverage amounts for future medical expenses, according to PCI officials.

All three property and casualty insurance trade groups lauded the House for passage of the SMART Act, as did officials of the Medicare Advocacy Recovery Coalition (MARC), a coalition of employers and other third-party payers.

Plaintiff lawyers industry also supported the bill.

“It will lead to more efficient and faster settlement of claims involving Medicare beneficiaries,” says Melissa Shelk, American Insurance Association vice president for federal affairs. “The bill will benefit beneficiaries, employers, insurers and CMS.  We urge the Senate to pass this legislation before it adjourns.”

Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies, says, “Today’s vote will help create a clear set of rules to help ensure swift settlements of claims and reduce waste and fraud costs for the Medicare Trust.”

PCI’s Litjen adds, “The SMART Act will help Medicare beneficiaries, taxpayers, and insurers by cutting costs and settling claims sooner. We strongly urge the Senate to schedule and pass this bipartisan legislation and applaud the leadership of the MARC coalition on this critical issue.”

Dean Pappas, Co-Chair of MARC and vice president & assistant general counsel for federal affairs with Allstate Insurance Company, says, “The House action today represents a major step forward in MSP reform, which has been long overdue.  Representatives Murphy's and Kind's effort to pass the SMART Act through the House demonstrates the bi-partisan cooperation needed to streamline the current system and bring good government to the MSP repayment process.”


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