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Rep. Murphy’s SMART Act Helps Seniors, Cuts Red Tape in Medicare Repayment Process

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.

SMART Act sponsor, U.S. Representative Tim Murphy (R-PA-18) said the hurdles in the Medicare Secondary Payer program were becoming troublesome and costly for seniors and the system.

“Medicare was chasing down bills as little as $1.50 or so, and they were not telling the insurance companies how much was owed to them,” he said, “under Medicare’s rules, they didn’t want to tell anyone how much they were to be paid until there was a legal settlement.”

The problem, said Murphy, is the process could go on for years. During that time, a senior may not be aware that Medicare has to be reimbursed.

“Medicare would find out that a senior had been reimbursed something, maybe years past, and would come after them and garnish their Social Security payments and leaving people pretty destitute.”

Through the SMART Act, Murphy said Medicare will get reimbursement information to people right away; will work with insurance and legal representatives on reimbursement, rather than putting the burden on seniors; and, he added the Act will cut down on waste.

“Medicare is going to get reimbursed faster and they’re going to save a lot of money by not chasing down bills that are only a few dollars,” said Murhpy, “they would actually spend a lot more staff time, mail time, phone, fax, e-mails, to get back money than the money they were getting back.”

The bipartisan law was sponsored by Murphy and Democratic Representative Ron Kind of Wisconsin.  Murphy said the law was needed because Medicare itself was not changing procedures, so lawmakers had to force change. The SMART Act was signed into law by President Obama in early January.

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