On December 21, 2012, the United States House of Representatives passed 401 to 3 the SMART (Strengthening Medicare Repaying Taxpayers) Act. Thereafter, the SMART Act was unanimously passed by the United States Senate. It is anticipated that President Obama will sign the SMART Act into law.
The SMART Act essentially brings clarity to and streamlines the process of repaying medical expenses to Medicare. By law, a recipient of Medicare is required to repay medical expenses which were paid by Medicare as a result of the negligence of a third party. For example, if a Medicare recipient is injured as a result of another party and Medicare paid the medical expenses for the injury, the Medicare recipient is required to repay Medicare for those medical expenses from any settlement or jury verdict. If Medicare is not repaid, Medicare can bring a lawsuit against the Medicare recipient and his or her attorneys to recover those medical expenses. Additionally, fines and penalties can be assessed.
Prior to the SMART Act, the process for obtaining the payment information and actually repaying Medicare was time consuming and cumbersome, filled with complicated forms and very little guidance from Medicare. Most times, cases are settled without knowing the exact amount to be repaid to Medicare. Under the current law, Medicare would not provide a final repayment amount until 90 days after notification of the settlement. Additionally, it was particularly scary for attorneys because an innocent mistake could lead to stiff fines and penalties.
While all the ramifications of the SMART Act are not yet known, it is believed that the Act will streamline the process and allow early action on this matter. Most importantly, it provides some certainty to the process.