Alabama Workers' Comp Blawg

  • 18
  • Jan
  • 2013

SMART Act Improves Medicare Conditional Payment System

On January 10, 2013, President Obama signed the SMART Act (the Strengthening Medicare and Re-Paying Tax Payers Act) into law. The Act reforms certain aspects of Medicare’s requirements for conditional payments, which affect workers’ compensation claims. The various sections under the SMART Act will go into effect at different times throughout the next 18 months.

Section 201 deals with the approval of conditional payments. This section creates reform in the following areas: 1) The U.S. Secretary of Health and Human Services (the Secretary) can be notified within 120 days, prior to settlement, judgment and award of the expected date and amount of the settlement, judgment or award; 2) Upon the Secretary receiving notice, the conditional payment information can be provided through a website and the information will be updated no later than 15 days after a payment; 3) Subject to certain conditions, the last statement downloaded from the website will be considered the final demand for conditional payment; 4) If the conditional payment amount is disputed, the Secretary is required to respond to resolve any dispute within 11 days. If not, the proposed resolution by the claimant, plaintiff, or applicable plan will be deemed accepted. These procedures will go into effect on April 9, 2013.

Section 202 will not take effect until 2014 but will obligate the Secretary to publish a reporting threshold by November 15th of every year.

Section 203 has an enactment date of March 10, 2013 and applies to fines for noncompliance. The fines will now be discretionary.

Section 204 states that the Centers for Medicare and Medicaid Services (CMS) has 18 months from the date of enactment to publish rules that phase out the use of Social Security numbers and health ID claims numbers in the reporting process.

Section 205 sets forth a statute of limitations for conditional payment recovery of 3 years after the receipt of notice of settlement, judgment, award or other payment. As of January 1, 2014 certain liability claims will be exempt from reporting and reimbursement. The exemption will be based on whether or not the claim falls below the annual threshold, which is calculated by the Secretary. This section also states that the discretionary (see Section 203) civil noncompliance penalties can be up to $1,000.00 for each day of noncompliance, with respect to each plaintiff or claimant.


This article was written by Joshua G. Holden, Esq. of Fish Nelson, LLC, a law firm dedicated to representing employers, self-insured employers, and insurance carriers in workers’ compensation matters. Fish Nelson is a member of the National Workers’ Compensation Defense Network (NWCDN). If you have any questions about this article or Alabama Workers’ Compensation Issues in general, please feel free to contact the author at or any firm member at 205-332-3430.

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