SMART Act(H.R. 1845): New Three Year Statute of Limitations For Conditional Payment/Lien Recovery Goes Into Effect July 10, 2013

Prior to President Barack Obama signing the Strengthening Medicare and Repaying Taxpayers (SMART) Act of 2011 on January 10, 2013, unclear law and inconsistent court rulings left settling parties without a clear answer on the scope of the Statute of Limitations for CMS to bring an action seeking conditional payment recovery.

Finally, six months after the SMART Act was signed into law, one component of the Act goes into effect.  The Act states that “An action may not be brought by the United States under this clause with respect to payment owed unless the complaint is filed not later than 3 years after the date of the receipt of notice of a settlement, judgment, award or other payment made pursuant to paragraph (8) relating to such payment owed.”  Further, “The amendment made by subsection (a) shall apply with respect to actions brought and penalties sought on or after 6 months after the date of the enactment of this Act.”

Consequently, recovery of conditional payments owed CMS is limited to three(3) years so long as CMS is notified of any settlement, judgment, award or payment.  This applies to any case settled after July 10, 2013.

While we are still waiting for CMS to promulgate rules or memoranda regarding other components of the Act, the three(3) year Statute of Limitations goes into effect July 10, 2013.  Settling parties are encouraged to continue to take appropriate steps with regards to notifying CMS of any settlement, judgment, award or payment.


Full Text of H.R. 1845:

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