NU Online News Service, Oct. 19, 2:10 p.m. EDT

The plaintiff's bar is joining employers and insurers in supporting legislation that would clarify industry-reporting requirements under the Medicare Secondary Payer Act.

Support of the SMART Act, or The Strengthening Medicare and Repaying Taxpayers Act, was voiced by the American Association for Justice as the bill was introduced Tuesday in the Senate.

Melissa Shelk, a vice president for federal affairs at the American Insurance Association, says support by the trial lawyers should add to the momentum for passage of the legislation.

"This is an issue we have in common with the trial lawyers," Shelk says. "Settlement of claims affects not only insurers and employers, but also affects the plaintiffs. We want a more efficient system for dealing with claims involving Medicare beneficiaries."

And, she says, having the same bills in both the House and Senate increases the possibility legislation will ultimately win passage.

She says the legislation is needed to help insurers deal more effectively with the problem of getting timely information from the Centers for Medicare and Medicaid Services regarding conditional payments made to people whose treatment has already been paid by Medicare and must be reimbursed to Medicare under the Medicare Secondary Payer Act.

Currently, reporting requirements only deal with payments under no-fault auto-insurance claims as well as workers' compensation claims.

But the problems in dealing with the law will be exacerbated as of Jan. 1 because the reporting provisions will be extended to include payments under liability insurance, such as auto accidents.

CMS is aware of the reporting problems, according to Shelk, and has started to respond. She cites a website launched Sept. 30 and a call-in customer service line for beneficiaries that gives up-to-date data on conditional payments.

But, Shelk says, "While such steps helpful to everyone, it is not the solution."

AAJ President Gary M. Paul, says, "Taxpayers, seniors, businesses, insurers are all hurt by the inefficiency of Medicare Secondary Payer, a system designed to repay taxpayers millions of dollars." 

He adds, "This bill is called the SMART Act for a reason: it is a practical solution to help streamline a system that is currently denying seniors benefits they are entitled to while costing taxpayers millions of dollars every year," Paul said.

Paul says the SMART Act requires Medicare repayment amounts to be fully disclosed to beneficiaries prior to insurers and attorneys entering into final settlements, allowing the full repayment amount to be factored into the final settlement. 

The legislation would also put a three-year time limit on claims and stop Medicare from pursuing amounts so small it costs the agency more to administer than is repaid.

"Unfortunately, it is the nation's most vulnerable seniors that are hurt by this bureaucratic nightmare Medicare has created," Paul says.

"This legislation is a commonsense, bipartisan response with support from the senior advocate and business community."

David Farber, a lawyer for the Medicare Advocacy Recovery Coalition (MARC), a group of large employers who earlier this year worked with members of the House to craft the original bill, says he is hopeful Congress will deal with the bill this year. He says he expects to be able to announce additional co-sponsors of the Senate bill very shortly, calling it, a "uniquely bipartisan" piece of legislation.