In recent years, amendments to the Medicare Secondary Payer Act made it risky and sometimes, impossible for litigants to settle personal injury cases involving plaintiffs whose medical bills had been paid by Medicare. The need to fundamentally change the manner in which Medicare seeks reimbursement from tort recoveries has been one of the few issues on which the plaintiffs bar and the liability insurance industry find common ground.
On January 10, President Obama signed the Strengthening Medicare and Repaying Taxpayers Act of 2011 dubbed the SMART Act to improve and clarify the federal governments otherwise unmanageable ability to seek reimbursement for health care expenses paid by Medicare and arising from a compensable tort. While the SMART Act does not cure all the ills in the Medicare Secondary Payer Act, the new law creates a procedure for litigants to learn how much Medicare believes its right of reimbursement is before the parties enter into a settlement or proceed through judgment. It also requires creation of a practical process by which to appeal Medicares demand for reimbursement.
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