Congress did something SMART… no really: St. Louis Trial Lawyer Breaks Down The SMART Act of 2013.

How to Handle Medicare Liens on Personal Injury Cases

While we were all worrying about falling off the fiscal cliff, Congress and the President did something SMART… literally.   The SMART Act was signed by President Obama on January 10, 2013. It makes numerous complicated administrative changes to Medicare that effect personal injury cases where the employee or plaintiff is on Medicare and has had treatment paid by Medicare.  While most of this may be over the average person’s head, if you stop reading now, just know that something “good” happened to reduce bureaucracy and to speed up settlements that need the federal government’s approval.

For example, when a senior citizen covered by Medicare is treated after an accident or an injury, it’s generally paid for by Medicare. Those medical expenses must then be reimbursed through insurance or a legal settlement. But, the process by which that was to happen has not been running smoothly. The Strengthening Medicare and Repaying Taxpayers, or SMART, Act aims to remedy that.

Many claims involving Medicare beneficiaries could not settle because the parties  could not determine their respective obligations to reimburse the federal government in the Medicare Trust Fund.  The result was a lose-lose-lose for the beneficiary, the defendant, and the Medicare Trust Fund – all because under the former law, Medicare had no pathway to provide the amount due the Trust Fund for “conditional payments” – those payments previously made by Medicare for the injury that will be covered by the settlement.

The SMART Act  fixes this problem by creating a process for Medicare to advise parties in the process of settling, before settlement, of how much is owed, so that the parties can appropriately allocate and resolve their Medicare obligations during settlement. By requiring Medicare to provide the amount due within 65 days of a request, the settling parties will know how much money has to be set aside for Medicare, and factor that amount into their final settlement.

There were numerous other changes. I have summarized some of them for you below.  These amendments will require changes to settlement procedure, lien resolution and reporting, and release language.  If you are on Medicare and have a personal injury case, make sure you have a lawyer that knows and understands the SMART ACT.

SUMMARY OF SOME OF THE CHANGES

Access to Information About How Much Medicare Paid

Old Law:   Did not require Medicare to give immediate access to the conditional payments that were made on behalf of a claimant.

New Law:  Up-to-date Conditional Payment Information Available Online

Claimants and responsible reporting entities (RREs, as defined by 42 U.S.C. § 1395y(b)(8)) will now have access to up-to-date information on the claims for which conditional payments have been made by CMS. Again,  conditional payments are those payments previously made by Medicare for the injury that will be covered by the settlement. The SMART Act requires CMS to make claims information—including payment amounts and information regarding claims related to a potential settlement, judgment, or other payment—available to claimants or their authorized representatives and RREs (that have obtained the claimant’s consent) through a secure website. This information must be updated no later than fifteen (15) days after the date that payment is made.

Additionally, claimants or RREs now may provide notice to CMS that a settlement, judgment, award, or other payment is reasonably expected and the date of the expected payment up to 120 days before the reasonably expected date of the payment.

CMS already has a web-based portal for claims information, the Medicare Secondary payer Recovery Portal [https://www.cob.cms.hhs.gov/MSPRP/], which appears to satisfy the requirements of the SMART Act. Final regulations must be promulgated by  October 10, 2013, nine (9) months after date of enactment, the effective date of this provision.

Pre-Settlement Lien Demands

Old Law:  Medicare could not provide a final lien demand until after settlement.  The inability to finalize Medicare’s reimbursement interest prior to settlement complicated settlement and lien resolution.

New Law: Establishing Conditional Payment Exposure Prior to Settlement

The SMART Act provides a mechanism by which a claimant or RRE (responsible reporting entities as defined by 42 U.S.C. § 1395y(b)(8)) determines liability for conditional payments prior to a settlement, judgment, award, or other payment for conditional payments. To do so:

  • the claimant or RRE (with the claimant’s consent) must obtain a statement of reimbursement amount from the website during the “protected period”—defined as the time, if any, after the expiration of the federal government’s response period following notice of a settlement, judgment, award, or other payment
    • the federal government’s response period is 65 days following notice
    • it may be extended by an additional 30 days if additional time is required to address claims for which payment has been made
    • it does not include any days where there was a failure in the claims payment and posting system due to exceptional circumstances as defined by regulation
  • the related settlement, judgment, award, or other payment must be made during that period, and
  • the last statement of reimbursement downloaded during that period and within three (3) business days of the date of the settlement, judgment, award, or other payment shall constitute the final conditional amount subject to recovery by the federal government related to that settlement, judgment, award, or other payment.

Final regulations must be promulgated by October 10, 2013, nine (9) months after date of enactment, the effective date of this provision.

Minimum Values Established

Old Law: The Medicare Lien reimbursement process currently applies even to settlements of minimal value.

New Law:  The SMART Act establishes a threshold below which the lien reimbursement and Section 111 reporting obligations do not apply.  The threshold will be established each year beginning in 2014.  The minimum threshold exception does not apply to settlements concerning alleged ingestion, implantation or exposure (including asbestos).

UPDATED July 31, 2013:

To further explain the minimum values… the SMART Act requires HHS to set a “single monetary compliance threshold” for certain claims, starting on November 15, 2014.  The purpose underlying that amendment is to avoid expending resources in seeking to recover conditional payments the value of which is less than the expense necessary to recover them. This is sort of a common sense provision as you will.  The “monetary compliance threshold” that the Act contemplates would be a dollar figure that defines the minimum value of a conditional payment for which Medicare could pursue reimbursement without wasting more resources in seeking to recover the payment than the claim itself is worth.  The SMART Act requires the Secretary of HHS to set and adjust that minimum threshold figure no later than November 15 each year, starting in 2014.  Attorneys should calander this date to learn the threshold for that year.

The monetary compliance threshold does not apply to all conditional payments.  More specifically, the monetary compliance threshold applies only to (1) liability TPOC reporting (total payment obligation to the claimant); and (2) conditional payments pertaining to “alleged physical trauma-based incidents,” but not incidents based on alleged ingestion, implantation, or exposure.

§111 Penalty Modification

Old Law: Companies that reported settlements involving Medicare beneficiaries to CMS either late or erroneously were subject to automatic fines of $1,000 per-day, per-claim.

New Law: Such penalties are now discretionary, not automatic.  HHS is directed to create “safe harbors” for companies that report in good faith, despite being late or in error. §203, SMART Act.

No SSN or HICN

Old Law: Claims professionals and settlement parties use claimants’ Social Security numbers (SSNs) or Health Insurance Claim Numbers (“Medicare numbers”) to access claimant health records. This situation has obvious and troubling privacy implications.

New Law: Within 18 months, the Secretary of HHS is to change §111 of Mandatory Insurance Reporting to make use of SSNs and Medicare numbers optional rather than required. Medicare beneficiaries are understandably reluctant to provide this information – given the high incidence of identity theft.  The SMART Act protects beneficiaries’ sensitive personal information while also reducing professionals’ liability exposure in the event of subsequent beneficiary identity theft. §204, SMART Act.

UPDATE:  July 31, 2013

I received a call from a lawyer today asking if SSN’s are still required as his client does not want to give out his SSN. As of this date, SSN’s are still required.   The Act provides that CMS must implement this requirement within 18 months of the SMART Act’s enactment, or by the middle of 2014.  That deadline is not a firm one, however.  The Act permits the Secretary of the Department of Health and Human Services (HHS) (the agency in which CMS operates) to request an extension of that 18-month deadline by “one or more periods up to one year each” if the Secretary believes that eliminating the use of social security numbers and health insurance claim numbers by the operative deadline “threatens patient privacy or the integrity of the secondary payer program[.]”  I will keep monitoring for changes but I suggest if you are an attorney and uncertain that you contact the HHS Department.

Three-Year Statute of Limitations

Old Law:   The MSP statute permits the government to pursue settling defendants for unsatisfied Medicare Liens in certain circumstances, even after the defendant has paid settlement funds to the plaintiff. Unclear law and inconsistent court rulings left settlement parties without a clear answer on the scope of the statute of limitations for the government to bring an action seeking conditional payment.

New Law: The SMART Act codifies a 2010 U.S. District Court decision – U.S. v. Stricker – which held that the government must file a complaint within three years of receiving notice that a judgment or settlement has been reached. §205, SMART Act.

Full Text of H.R. 1845: http://www.gpo.gov/fdsys/pkg/BILLS-112hr1845rds/pdf/BILLS-112hr1845rds.pdf

 

A Lawyer’s Timeline Under SMART for Finding Out How Much to Pay Back Medicare

For those lawyer fans of this blog, starting in October 2013, you should follow these rules to obtain a Final Conditional Amount.

  1. T-120 days to settlement – Send an Expected Settlement Notice to the MSPRC;
  2. T-115 days to settlement – Check to see if the MSPRC received the Expected Settlement Notice.  Everyone knows the MSPRC response, “we don’t have that in the file” or “I don’t see that here.”  If you don’t check you might waste the entire process.
  3. T-55 days to settlement – You should receive notice that the Final Conditional Amount is available for download on the MSPRC website, or more likely, the Medicare Secondary Payer Recovery Portal (MSPRP).  If you have not, contact the MSPRC to check the status.  Keep in mind the rule states they have 65 days from receipt of your notice – so we will have to keep track of how they define the word receipt.  If your case qualifies for “exceptional circumstances” the MSPRC will tell you it needs another 30 days to process the Final Conditional Amount.
  4. T-25 days to settlement – You should receive notice that your exceptional circumstances request is completed and the Final Conditional Amount is available for download.
  5. T-3 days to settlement – You must download the Final Conditional Amount from the designated website.  If you do so at 4 days to settlement it is apparently invalid and does not constitute a Final amount.  If you do so more than 3 days after settlement (we believe after is still okay – the rule uses the word “within”) it is also invalid.

-Published January 31, 2013.  Authored by Michelle M. Funkenbusch, St. Louis Trial lawyer

If you know someone in need of a personal injury lawyer, please contact St. Louis Personal Injury Lawyer Michelle Funkenbusch at 314-338-3500 .

 

 © 2013 The Law Offices of Michelle M. Funkenbusch, LLC.  All Rights Reserved. These materials may not be reproduced in any way without the written permission of The Law Offices of Michelle M. Funkenbusch, LLC. This blog is designed to provide general information on the topic provided and is posted with the understanding that the publisher is not engaged in rendering any legal or professional services. Although this post and the blog is prepared by a lawyer, it should not be used as a substitute for legal advice. If legal advice is required, the services of The Law Offices of Michelle M. Funkenbusch should be sought privately.

 

How To Find Out What is On Your Missouri Driver’s Record For Free! Answers from a St. Louis Traffic Ticket Lawyer

The Missouri Traffic Ticket Point System and Free Driver’s Record Over the Phone: Advice from a Traffic Ticket Lawyer

Do you fear you are accumulating points on your license? Here is how to find out what you have on your record and what you risk with new tickets.

The First Step: What is Already on Your Missouri Driver’s Record? Call (573) 526-2407!

You can find out what is on your Missouri driver’s record for FREE by calling the Missouri State interactive voice response system at (573) 526-2407 – available 24 hours a day, 7days a week. You don’t need a traffic ticket lawyer to do this!  Make sure to have your driver’s license number available. If you have questions about what Missouri traffic tickets are listed on your driver’s record or if you want to know about a suspension, or revocation on your Missouri driver record, call this number. It will tell you when you had a prior alcohol suspension of your license and whether you have officially been reinstated.

The Second Step: Finding Out What Points You Might Receive for New Violations

If you just received a ticket, but don’t have a traffic ticket lawyer, and want to know what points you might get on your record if you don’t get the ticket reduced to a nonmoving violation, you can refer to this chart: http://dor.mo.gov/forms/899.pdf .

The Third Step: What Happens When You Accumulate Points

Too many points means you lose your privilege to drive in Missouri!!! For example, a speeding ticket and no proof of insurance may mean 8 points on your license and you will be suspended from driving by the Department of Revenue!

It is not easy to figure out the point system. Here are the details:

If you accumulate a total of 4 points in 12 months, the Department of Revenue will send you a point accumulation advisory letter.

If you accumulate a total of 8 or more points in 18 months, the Department of Revenue will SUSPEND your driving privilege.

1st suspension – 30 days
2nd suspension – 60 days
3rd or more suspensions – 90 days

The Department of Revenue will REVOKE your driving privilege for one year if you accumulate:
12 or more points in 12 months
18 or more points in 24 months
24 or more points in 36 months
When your driving privilege is reinstated following a Point Suspension or Revocation, the Department of Revenue reduces your total points to 4.
Every year you drive without getting new points on your record, the points will be reduced.

1 year — total remaining points reduced by one-third
2 years — remaining points reduced by one-half
3 years — points reduced to zero

Although your points may be reduced to zero, certain types of convictions must remain listed permanently on your Missouri driver record.

It is never a good idea to accumulate points as you can quickly get to a suspension by receiving just a few traffic tickets.  Further, your insurance rates can skyrocket when they do annual driver’s record checks to determine premiums. If you need advice about your traffic related matters, Funkenbusch has handled hundreds of tickets for her clientele.  She has been able to get Driving While Suspended charges dismissed, speeding tickets reduced to littering, and can help you clean up your record with the DOR if you are looking to purge your old tickets from your record.   Call a trial expert and traffic ticket lawyer at the Law Office of Michelle M. Funkenbusch, 314-338-3500, to have your traffic tickets resolved.  Free consultation.

Traffic Ticket- SEND US YOUR INFO VIA EMAIL!!!

We would love to hear from you so contact us as soon as you get the ticket. Unless other arrangements have been made, you MUST appear on your court date until you have paid us to hire us. If your court date is in the next week, fill out the form but make sure to call us to confirm we can enter our appearance before your court date. Again, Please fill out this form and we will get in touch with you shortly.
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Do you need a Will? Mention this Article for $50.00 off a Basic Will Package.

If You’re One of the 70% of Americans Without a Will, Read On…

Do you have a will? Between half and two-thirds of American adults don’t. Do you need one? Only if you answer yes to any of the questions below:
1. Do you care who gets your property if you die?
2. Do you care who gets your money if you die?
3. Do you care who is appointed guardian of your minor children if you die?
Who Needs A Will?
Wills are not just for the rich. Regardless of how much or how little money you have, a will ensures that whatever personal belongings and assets you do have will go to family or beneficiaries you designate. Without a will, the court makes these decisions.If you have children, a will is a must, to ensure that you get to choose your children’s guardian. Few people plan to die in the near future, but if you die suddenly without a will, you’ll be subjecting your family and loved ones to confusion and anxiety at what is already a difficult time.

There are other benefits to having a will, including tax benefits.

You may amend your will at any time. In fact, it’s a good idea to review it periodically and especially when your marital status changes. At the same time, review your beneficiary designations for your 401(k), IRA, pension and life insurance policy since those accounts will be transferred automatically to your named beneficiaries when you die.

A will is also useful if you have a trust.  A trust is a legal mechanism that lets you put conditions on how your assets are distributed after you die and it often lets you minimize gift and estate taxes. But you still need a will since most trusts deal only with specific assets such as life insurance or a piece of property, but not the sum total of your holdings.

Even if you have what’s known as a revocable living trust in which you can put the bulk of your assets, you still need what’s known as a pour-over will. In addition to letting you name a guardian for your children, a pour-over will ensures that all the assets you intended to put into the trust are put there even if you fail to retitle some of them before your death.

Any assets that are not re-titled in the name of the trust are considered subject to probate. As a result, if you haven’t specified in a will who should get those assets, a court may decide to distribute them to heirs whom you may not have chosen.

In addition to the will or trust, we ask our clients to fill out Durable Powers of Attorney for Financial Decisions, Health Care Directives, and other documents that are free and part of life planning.

If you have questions about whether you need a will or trust, contact Michelle M. Funkenbusch. Working with Joan M. Swartz, for complex estate planning, and tax professionals conveniently located in our building, we can provide you with full-service estate planning.  Fees range from $300.00 to $3000.00 depending on the complexity of your estate and whether you want a will or trust.

 

Do You Have or Want a Home Office? A New Tax Law May Benefit You!

IRS Announces Simplified Option for Claiming Home Office Deduction Starting This Year; Eligible Home-Based Businesses May Deduct up to $1,500; Saves Taxpayers 1.6 Million Hours A Year

The Internal Revenue Service today announced a simplified option that many owners of home-based businesses and some home-based workers may use to figure their deductions for the business use of their homes.

In tax year 2010, the most recent year for which figures are available, nearly 3.4 million taxpayers claimed deductions for business use of a home (commonly referred to as the home office deduction).

The new optional deduction, capped at $1,500 per year based on $5 a square foot for up to 300 square feet, will reduce the paperwork and recordkeeping burden on small businesses by an estimated 1.6 million hours annually.

“This is a common-sense rule to provide taxpayers an easier way to calculate and claim the home office deduction,” said Acting IRS Commissioner Steven T. Miller. “The IRS continues to look for similar ways to combat complexity and encourages people to look at this option as they consider tax planning in 2013.”

The new option provides eligible taxpayers an easier path to claiming the home office deduction. Currently, they are generally required to fill out a 43-line form (Form 8829) often with complex calculations of allocated expenses, depreciation and carryovers of unused deductions. Taxpayers claiming the optional deduction will complete a significantly simplified form.

Though homeowners using the new option cannot depreciate the portion of their home used in a trade or business, they can claim allowable mortgage interest, real estate taxes and casualty losses on the home as itemized deductions on Schedule A. These deductions need not be allocated between personal and business use, as is required under the regular method.

Business expenses unrelated to the home, such as advertising, supplies and wages paid to employees are still fully deductible.

Current restrictions on the home office deduction, such as the requirement that a home office must be used regularly and exclusively for business and the limit tied to the income derived from the particular business, still apply under the new option.

The new simplified option is available starting with the 2013 return most taxpayers file early in 2014. Further details on the new option can be found in Revenue Procedure 2013-13, posted today on IRS.gov. Revenue Procedure 2013-13 is effective for taxable years beginning on or after Jan. 1, 2013.

If you want information on how to create your own home-based business, form a L.L.C., or have other business related questions, do not hesitate to contact the Law Offices of Michelle M. Funkenbusch. Working in conjunction with attorney Joan M. Swartz and reputable accountant advisors, we can answer any question you may have.  Call 314-338-3500 for more information.