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While there is no apparent legislative fix to the Medicare Set Aside conundrum, there are legislative efforts underway with regard to conditional payments with the SMART Act (H.R. 1063).  As I blogged about previously, the CFO for CMS was called before the House Energy and Commerce Committee for discussions regarding CMS’s handling of collection efforts under the MSP.  Ms. Taylor was grilled and asked questions she had now answers for.  As a follow up, the Committee Chairman, Fred Upton from Michigan, sent a letter to Kathleen Sebelius, Secretary of Health and Human Services and Dr. Donald Berwick, CMS’s administrator requesting CMS’s insight regarding several key issues. 

In the letter, Chairman Upton stated that the “American people deserve an efficient and effective government, and they may be shocked to learn that the Centers for Medicare and Medicaid Services (CMS) would expend thousands of dollars in administrative costs to pursue claims as low as $1.59, $2.81 and $4.82 in the non-group health plan (NGHP) setting … We cannot accept collection procedures that come at an unreasonable cost to the tax payer”   The letter asked the Secretary and Administrator Berwick to respond in writing to three questions.  The first question asked about CMS’s position on pursuit of low dollar claims in the NGHP setting and whether there had been any analysis completed to see if the cost of pursuing a claim was larger than the amount recovered.  The second question inquired whether CMS has have considered establishing a low dollar threshold below which a claim would not be pursued in the NGHP setting and if so, what would the dollar figure likely be.  The third question related to any investigations by CMS as to whether a low dollar threshold could ultimately save CMS money or lose them money.  The letter concluded with a requested response by 8/5/11.

It seems clear that the committee is interested in looking at whether a low dollar threshold might make sense for eliminating wasteful recovery processes within CMS.  If the threshold was set high enough, it might relieve some of the pressures in smaller settlements when trying to deal with resolution of Medicare conditional payments.  The SMART Act, if passed, would require CMS to determine a low dollar threshold below which conditional payment obligations would not be pursued.  The SMART Act currently has bi-partisan support in the House with 30 sponsors and 5 additional sponsors about to be added.

The AAJ this week urged its members via e-mail to send in client stories which demonstrate the problems that need fixing with regards to conditional payments.  It also sought members to contact their member of Congress and urge them to co-sponsor the SMART Act.  The e-mail stated that the AAJ is “looking at both regulatory and legislative fixes to create certainty, finality and proportionality in the reimbursement process.”  The AAJ indicated that during the June 22^nd committee meeting there was agreement, between the stakeholders on both sides of the table “that providing the amount of conditional payment prior to settlement is a much needed reform.” 

The Medicare Advocacy Recovery Coalition, the force behind the SMART Act, recently released a statement regarding the hearing held on 6/22.  It praised the efforts of those members of the House on their efforts to improve the Medicare Secondary Payer system.