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CMS Issues Final Rule: Conditional Payment Appeals Process

On February 26th, 2015, CMS issued a final rule implementing provisions of the Strengthening Medicare and Repaying Taxpayers Act (the SMART Act), establishing a right of appeal and formal Medicare Secondary Payer (MSP) appeals process for applicable plans. The appeals process is for situations when Medicare seeks to recover payments from applicable plans, including liability insurance (including self-insurance), no-fault insurance, and workers’ compensation laws or plans.

Some things to note regarding the final rule:

- The applicable plan cannot appeal unless and until an initial demand has been issued.

- Medicare has the right to recover conditional payments from the beneficiary, the primary payer, or any other entity that has the proceeds from payment by the primary plan; therefore, Medicare’s decision regarding the entity it is pursuing recovery from will not be subject to appeal.

- The right to appeal is limited to the identified debtor, not a potential identified debtor.

- The SMART Act provision amended only the MSP provisions for Medicare Part A and Part B (section 1862(b) of the Act) and does not apply to Part C or Part D plans pursuing an MSP based recovery.

These regulations will become effective on April 28, 2015. The posting on the Federal Register can be found here.

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