Last week, CMS issued a final rule giving liability insurance, no-fault insurance, and workers’ compensation the right to appeal reimbursement demands from Medicare.

The final rule implements appeal rights created under the Strengthening Medicare and Repaying Taxpayers Act of 2012 (“SMART Act”).

Section 1862(b)(2) of the Social Security Act prohibits Medicare from paying for medical care when a beneficiary’s primary plan has already paid or is reasonably expected to pay for the care. Medicare is allowed, however, to serve as a secondary payer and cover medical expenses when a beneficiary’s primary plan is slow to pay for items and services covered by the plan. In that case, primary payers are expected to reimburse Medicare after there is a settlement, judgment, award, or other payment related to those expenses.

Previously, only Medicare beneficiaries had the right to appeal secondary payer reimbursement demands from Medicare. CMS’s most recent final rule extends this right of appeal to liability insurance (including self-insurance), no-fault insurance, and workers’ compensation plans and adopts the same multilevel appeal process formerly available only to Medicare beneficiaries.

Prior to the enactment of the final rule, insurance plans were limited to submitting defenses to CMS contractors, who were required only to consider these defenses.

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