Medicare has increased the threshold for when a physical trauma-based liability settlement is large enough that the beneficiary must report it and repay conditional payments. On February 18, 2014, the Centers for Medicare & Medicaid Services (CMS) issued an alert which increases the current reporting threshold from $300 to $1,000. The threshold increase is a result of the mandatory review required by Section 202 of the Strengthening Medicare and Repaying Tax Payers Act of 2012 (SMART Act) to determine at what level the costs related to collecting data and determining the amount of Medicare’s recovery claim outweigh the benefits of recovering the conditional payments.
The new threshold is effective as of February 18, 2014 for cases where a recovery demand has not yet been issued. It is important to note this threshold does not apply to settlements for alleged ingestion, implantation or exposure cases. This means that physical trauma-based liability settlements of $1,000 or less do not need to be reported, nor will the beneficiary need to repay Medicare’s conditional payments.
The SMART Act was designed to save Medicare money and part of that savings is to come from an annual review meant to ensure that the federal government does not spend more money pursuing a reimbursement amount than the cost of that recovery effort. The wise personal injury attorney can co-op this purpose and save his clients who receive de minimis recoveries from the hassle of dealing with the Medicare conditional payment issue.
The alert is available on the CMS website. Please click here.