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PROPOSED AMENDMENTS TO THE MEDICARE SECONDARY PAYER ACT

BACKGROUND:  Workers' compensation settlements with overlapping Medicare coverage are reviewed by CMS to insure that an appropriate amount of the settlement covering future medical expenses is "set-aside" to protect Medicare.

ISSUE:  CMS delays review of the set-aside amount by engaging in an unpredictable, inefficient and slow process that is costly to injured workers, employers, insurers and states which administer the workers’ compensation laws.

PROPOSAL TO AMEND THE MEDICARE SECONDARY PAYER ACT: Recognizing that a legislative solution is necessary to correct CMS' informal Medicare set-aside process, legislation was introduced in the 109^th Congress.    This legislation will be reintroduced in the 110^th Congress.  These proposed statutory amendments establish a predictable, efficient process while also providing reasonable protection for injured workers and Medicare.

The Proposal Would:

• establish clear criteria for when a Medicare set-aside should be reviewed;
• create certainty as to the rules for calculating the Medicare set-asides;
• provide optional direct payment of Medicare set-aside to Medicare;
• speed up the Medicare set-aside review process and provide certainty to state-approved settlements.

SUMMARY & SUPPORT:  The proposal will benefit injured workers, employers, insurers and CMS.

• It creates a system of certainty where presumptions of correctness allow the settlement process to move forward and eliminates millions of dollars in administrative costs that harm workers, employers (especially small business), insurers, and CMS.
• It has the consensus support of the trial bar, employers, and the insurance industry.  The American Bar Association approved a resolution, asking Congress to pass legislation reforming Medicare set-aside procedures related to the settlement of workers' comp claims.

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Last modified: 10/02/07