The SMART ACT – It’s not just for Liability!
Katie Fox
January 10, 2013

Since December 21, 2012, there has been a constant stream of communication surrounding the SMART Act. As a founding co-chair, I am quite pleased by the industries attention to the bill. Now that the bill has been signed into law, we will begin to see more communications related to its impact. Regulation will be established over the coming months and ultimately 9-18 months from now the SMART ACT will be put into practice. It is important to point out that the ACT will positively impact all lines of business. The bill is broken down into the following sections:

  • Sec. 201 – Final CP before S/J/A & Appeal

WC Impact- Allows the parties to obtain the conditional payment number prior to settlement, if all time frames and conditions are met, the WC plan shall no longer be on the receiving end of Final Demands that are outside of the expected amount. The possible unreserved liabilities that the industry had experienced in the past will be just that – a thing of the past – if this new process is followed.

Appeal process – The WC plan will have a right of appeal with respect to conditional payments. Unfortunately, the CMS determinations will likely be left aside during the establishment of regulations, due to the fact that the WCMSA Review process is an optional process. However, the industry needs to look at the impact of the WCMSA, was it not established to prevent a shift, how does the industry respond to the need for WCMSA as compared to submission? Will the right of appeal be applicable post settlement should the agency not agree with an exhaustion of funds in cases where the WCMSA was not approved? 2013 will be a telling year for the WC community in this regard.

  • Sec. 202 – Set Reporting Threshold

WC Impact – The reporting threshold will only apply to matters without ORM, thus WC files will have no impact on this new reporting threshold, however, there is a current policy memo that outlines a reporting threshold of small claims, where all payments are made directly to the medical providers and the total amount paid is under $750.00.

  • Sec. 203 – § 111 Penalty Modifications

WC Impact- Discretion was given to the Secretary with respect to the $1,000 per day per claim penalty established under Section 111. WC Plans should be jumping for joy that they will have the opportunity to respond with their diligent attempts at compliant data transmission.

  • Sec. 204 – Use of SSN or HICN Prohibited

WC Impact- No need to verify SSN information with the beneficiary, this section does greatly benefit the liability community.

  • Sec. 205 – 3 Year Statute of Limitations

WC Impact – Many have experienced the delayed CP Demand, being issued well past the date of settlement. Some have experienced additional CP Demands on files that have been closed for years, following a prior CP Demand. This shall provide a clear limit of exposure to 3 years.

Franco Signor, as a full service Medicare Compliance partner,  continues to support the MARC Coalition and invites others to get involved – now is the time to have your voice heard during the formation of regulation that will surely impact the entire casualty community. Visit the MARC website for more information,

Katie A. Fox, MSCC