On January 10, 2013, President Obama signed into law H.R. 1845, which includes the Strengthening Medicare and Repaying Taxpayers Act of 2011 (SMART Act). The SMART Act amends several portions of the Medicare Secondary Payer (MSP) Act that apply to non-group health plans, including liability insurance (including self-insurance), no-fault insurance and workers’ compensation plans (together, NGHPs). Although the SMART Act makes significant substantive and procedural amendments to the MSP Act, many practical issues will continue to bedevil parties trying to settle a personal injury claim.
THE MSP ACT -
Under the MSP Act, Medicare does not pay for health care items and services to the extent that payment has been made or can reasonably be expected to be made by certain types of other insurance, including group health plans or NGHPs (together, primary payers). However, Medicare can make “conditional payments” for those items and services if a primary payer does not pay promptly. When the Medicare beneficiary receives a settlement or other payment with respect to the injury for which Medicare paid conditional benefits, the MSP Act requires the settling parties to repay Medicare before any funds are given to the Medicare beneficiary.
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