MARC Smart about New Medicare Secondary Payer Act Bill

Wednesday, March 30, 2011 | 0

By Roy Franco
Franco Signor

On March 14, Congressman Tim Murphy for Pennsylvania and Congressman Ron Kind for Wisconsin introduced H.R. 1063 to bring needed improvements to the Medicare Secondary Payer Act. Long overdue, the proposed legislation builds on the coalition’s previous effort last year when it launched H.R. 4796. That legislation died last year when the 111th Congressional Session ended on Dec. 31, 2010.

H.R. 1063 significantly improves on last year’s bill. It's intended design is to improve collection by the Medicare Trust Fund of conditional payments, without adding cost to the federal government. This is accomplished by setting forth a clear process to obtain a demand letter from Medicare within a reasonable time before a settlement, judgment or award is expected. During the relevant time period (120 days), the applicable plan or Medicare beneficiary may make a request of Medicare for a demand letter which is to be produced in 65 days. If the demand letter is not forthcoming, the parties will need to send a second request, and if it is not responded to within 30 days, Medicare is barred from collecting conditional payments related to the claim (workers’ compensation or liability).

Medicare’s contractors have already gone on record that it can produce a Conditional Payment Letter within 65 days, so the legislation simply codifies what is already being accomplished.  It however, does make one important change.  The conditional payment letter will now be a final demand, which the parties can rely on at the time of settlement. If this bill is passed, no longer will it be necessary to wait for Medicare to issue a Final Demand after settlement, the parties can simply send the check in and complete the conditional payment obligation owed related to the claim.

Another improvement to the Bill over last year is how a threshold is set for claims that the Medicare Secondary Payer Act will not apply to.  To ensure there is no cost associated with this Legislation, H.R. 1063 requires the Medicare Actuary to determine what it costs the Centers for Medicare and Medicaid Services and its contractors to recover a conditional payment. It then associates that conditional payment amount to the settlement amount which then becomes the threshold.  This is done each year, and it ensures that Medicare will not spend money recovering claims for which it would spend more in administrative costs to collect. It is an extremely SMART provision.

Outside of these improvements, the bill essentially remains the same and if implemented would do the following:

   1.  Allow primary plans a right of appeal
   2. Set a limitations period of three years
   3. Limit the use of social security numbers or Medicare Numbers; and
   4. Soften penalties on Section 111 compliance.

We are extremely proud of this Bill which is the product of the Medicare Advocacy Recovery Coalition's members. We would not be where we are today without MARC’s members. Although the legislation has been introduced, we still have a long way to making it become a reality.  To those of you that are a part of MARC, thank you, please send in your letters of support.  Even if you are not part of MARC and want to support H.R.1063, please send in a letter of support.

Together we can bring a reasonable approach to MSP that works for everyone.

Roy A. Franco is co-chairman of the Medicare Advocacy Recovery Coalition and one of the three founders of the Franco Signor consulting firm in Kenmore, N.Y. This column was reprinted with his permission from the firm's blog, at http://www.francosignor.com/blog/