Senator Ron Wyden and I led a bipartisan effort to make the Medicare Secondary Payer (MSP) Program more efficient and cost effective to taxpayers. The Strengthening Medicare and Repaying Taxpayers (SMART) Act speeds up the rate by which Medicare and its beneficiaries are reimbursed for costs that should be borne by another party. With Washington’s sky high debt and deficit, we need to do everything we can to ensure that entitlement programs such as Medicare are cost effective and working for the very people they were designed to help.   

Under the MSP program, if a Medicare beneficiary is injured by a third party and a settlement is pursued as a result of that injury, the third party is responsible for paying for the individual’s medical expenses.  If Medicare, now the “secondary payer,” pays any of the costs associated with the injury, it is entitled to reimbursement.

Several problems existed with the reimbursement process under this scenario before passage of the SMART Act. Prior to passage of the SMART Act, Medicare did not have a way to disclose the MSP amount before settlement, and this created unnecessary uncertainty that made it hard to settle cases. Second, there were times when Medicare spent more money pursuing an MSP payment than they actually ended up receiving in payment. MSP reporting requirements also required beneficiaries to submit sensitive personal information to the settlement company, which led to privacy concerns. Finally, there was no clear statute of limitations on all MSP claims.

The SMART Act addressed these issues by creating a process that allows CMS to disclose the MSP amount before settlement so it can be factored into the settlement; requiring Medicare to no longer pursue MSP claims that do not cover their own expenses; directing Medicare to establish an alternative method of identifying individuals so that they don’t have to provide sensitive personal information; and setting a three-year statute of limitations for most claims.