House Resolution 2649 and Senate Bill 1514

The Medicare Secondary Payer compliance reform movement remains strong in the legislature. On June 4, 2015, Representative Reichert introduced the House Resolution (HR 2649) bill to amend Title XVIII of the Social Security Act to provide for the application of Medicare secondary payer rules to certain workers’ compensation settlement agreements and qualified Medicare set-aside provisions. Senator Portman introduced the identical Senate Bill (SB 1514) the same day. The bills have been referred to the Committee on Ways and Means, the Committee on Energy and Commerce and to the Committee on Finance.

These bills are essentially reincarnations of the previously introduced Senate Bill 2731 and HR 1982. They provide for limited application of Medicare Secondary Payer rules to settlement agreements that are under $25,000.00 or any such greater amount as determined by the Secretary. In addition, workers’ compensation settlements involving claimants who are not Medicare eligible at the time of settlement and are unlikely to become eligible within thirty months of the settlement would also be excluded from the application of the Medicare Secondary Payer rules. These thresholds and the definition of “likely to become eligible” are similar to those set out in CMS’ workload review thresholds.

Qualified Medicare Set-Aside (QMSA) arrangements are also presented as a means of satisfying MSP obligations The QMSA must “reasonably take into account” the parties’ full payment obligations. A second type of QMSA outlined in the Bills allows parties to a compromise settlement agreement to proportionally adjust the MSA amount of the agreement. The QMSA amount may be calculated by “applying a percentage reduction to the Medicare set-aside amount for the total settlement amount that could have been payable under the applicable workers’ compensation law or similar plan involved had the denied, disputed, or contested portion of the claim not been subject to a compromise agreement”.

Although the submission of the QMSA to the Secretary for review is optional, the Bill sets out a 60 day turn around time for the Secretary to review the submission and notify the parties in writing of the adequacy of the QMSA. An appeal process is also provided in the event that the parties disagree with the Secretary. Parties would be able to request a reconsideration from the Secretary followed by a hearing before an administrative law judge and judicial review.

Under the proposed Bills, the parties may elect to make direct payment of the QMSA to the Secretary. Lastly, Court approved settlement agreements would be deemed “final and conclusive” as to any and all matters within the jurisdiction of the workers’ compensation law. Specific examples of matters included: “any allocation of settlement funds, the projection of future indemnity or medical benefits that may be reasonably expected to be paid under the State’s workers’ compensation laws”. This deference to the parties’ stipulations would clearly make the settlement process less burdensome as it concerns MSP compliance.

We will continue to monitor the progress of the current MSP reform bills and provide updates as they develop.

Leave a Reply