Medicare Secondary Payer and Workers' Compensation Settlement Agreements Act of 2013 - Amends title XVIII (Medicare) of the Social Security Act to: (1) create an exception to Medicare secondary payer requirements for certain workers' compensation settlement agreements, and (2) provide for the satisfaction of such requirements through use of qualified Medicare set-asides under such agreements.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1982 Introduced in House (IH)]
113th CONGRESS
1st Session
H. R. 1982
To amend section 1862 of the Social Security Act with respect to the
application of Medicare secondary payer rules to workers' compensation
settlement agreements and Medicare set-asides under such agreements.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 15, 2013
Mr. Reichert (for himself and Mr. Thompson of California) introduced
the following bill; which was referred to the Committee on Ways and
Means, and in addition to the Committee on Energy and Commerce, for a
period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
To amend section 1862 of the Social Security Act with respect to the
application of Medicare secondary payer rules to workers' compensation
settlement agreements and Medicare set-asides under such agreements.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Medicare Secondary Payer and
Workers' Compensation Settlement Agreements Act of 2013''.
SEC. 2. APPLICATION OF MEDICARE SECONDARY PAYER RULES TO CERTAIN
WORKERS' COMPENSATION SETTLEMENT AGREEMENTS AND QUALIFIED
MEDICARE SET-ASIDE PROVISIONS.
(a) Threshold for Secondary Payer Provisions for Certain Workers'
Compensation Settlement Agreements.--Section 1862 of the Social
Security Act (42 U.S.C. 1395y) is amended--
(1) in subsection (b)(2)(A)(ii), by inserting ``subject to
subsection (p),'' after ``(ii)''; and
(2) by adding at the end the following new subsection:
``(p) Threshold for Secondary Payer Provisions for Certain Workers'
Compensation Settlement Agreements.--
``(1) In general.--A workers' compensation law or plan
shall not be treated as a primary plan for purposes of
subsection (b) with respect to a workers' compensation
settlement agreement if the agreement (or claimant under the
agreement) meets any of the following requirements:
``(A) Total settlement amount not exceeding
$25,000.--Such agreement has a total settlement amount
(as determined under paragraph (2)) that does not
exceed $25,000 or such greater amount as the Secretary
may specify in regulations.
``(B) Likely ineligibility of workers' compensation
claimant for medicare benefits.--The claimant subject
to such agreement--
``(i) is not eligible for benefits under
this title as of the effective date of the
agreement; and
``(ii) is unlikely to become so eligible,
as determined under paragraph (3), within 30
months after such effective date.
``(C) No future workers' compensation medical
expenses.--The claimant subject to such agreement is
not eligible for payment of medical expenses incurred
after the effective date of the agreement from the
workers' compensation law or plan of the jurisdiction
in which such agreement will be effective.
``(D) No limitation on future workers' compensation
medical expenses.--Such agreement does not limit or
extinguish the right of the claimant to payment of
medical expenses incurred after the effective date of
such agreement by the workers' compensation law or plan
of the jurisdiction in which the agreement will be
effective.
``(2) Determination of total settlement amount of workers'
compensation settlement agreement.--For purposes of paragraph
(1)(A) and subsection (q) and with respect to a work-related
injury or illness that is the subject of a workers'
compensation settlement agreement, the total settlement amount
of the agreement is the sum of monetary wage replacement
benefits, attorney fees, all future medical expenses, repayment
of Medicare conditional payments, payout totals for annuities
to fund the expenses listed above, and any previously settled
portion of the workers' compensation claim.
``(3) Determination of likely ineligibility of claimant for
medicare benefits.--For purposes of paragraph (1)(B)(ii), a
workers' compensation claimant shall be deemed unlikely to
become eligible for benefits under this title within 30 months
after the effective date of the agreement unless, as of the
effective date of the agreement, such claimant is insured for
disability insurance benefits under section 223(c)(1) and is
described in any of the following subparagraphs:
``(A) Awarded disability benefits.--The individual
has been awarded such disability insurance benefits.
``(B) Applied for disability.--The individual has
applied for such disability insurance benefits.
``(C) Anticipates appeal.--The individual has been
denied such disability insurance benefits but
anticipates appealing that decision.
``(D) Appealing or refiling.--The individual is in
the process of appealing or refiling for such
disability insurance benefits.
``(E) Minimum age.--The individual is at least 62
years and 6 months of age.
``(F) End-stage renal disease.--The individual is
medically determined to have end-stage renal disease
but does not yet qualify for health benefits under
section 226A based on such disease.
``(4) Definitions.--For purposes of this subsection and
subsection (q):
``(A) Compromise agreement.--The term `compromise
agreement' means a workers' compensation settlement
agreement that--
``(i) applies to a workers' compensation
claim that is denied or contested, in whole or
in part, by a workers' compensation payer
involved under the workers' compensation law or
plan applicable to the jurisdiction in which
the agreement has been settled; and
``(ii) does not provide for a payment of
the full amount of benefits sought or that may
be payable under the workers' compensation
claim.
``(B) Commutation agreement.--The term `commutation
agreement' means a workers' compensation settlement
agreement to settle all or a portion of a workers'
compensation claim, in which--
``(i) liability for past and future
benefits is not disputed; and
``(ii) the parties to the agreement agree
to include payment for future workers'
compensation benefits payable after the date on
which the agreement becomes effective.
``(C) Workers' compensation claimant.--The term
`workers' compensation claimant' means a worker who--
``(i) is or may be covered under a workers'
compensation law or plan; and
``(ii) submits a claim or accepts benefits
under such law or plan for a work-related
injury or illness.
``(D) Workers' compensation law or plan.--
``(i) In general.--The term `workers'
compensation law or plan' means a law or
program administered by a State or the United
States to provide compensation to workers for a
work-related injury or illness (or for
disability or death caused by such an injury or
illness), including the Longshore and Harbor
Workers' Compensation Act (33 U.S.C. 901-944,
948-950), chapter 81 of title 5, United States
Code (known as the Federal Employees
Compensation Act), the Black Lung Benefits Act
(30 U.S.C. 931 et seq.), and part C of title 4
of the Federal Coal Mine and Safety Act (30
U.S.C. 901 et seq.), but not including the Act
of April 22, 1908 (45 U.S.C. 51 et seq.)
(popularly referred to as the Federal
Employer's Liability Act).
``(ii) Inclusion of similar compensation
plan.--Such term includes a similar
compensation plan established by an employer
that is funded by such employer or the
insurance carrier of such employer to provide
compensation to a worker of such employer for a
work-related injury or illness.
``(E) Workers' compensation payer.--The term
`workers' compensation payer' means, with respect to a
workers' compensation law or plan, a workers'
compensation insurer, self-insurer, employer,
individual, or any other entity that is or may be
liable for the payment of benefits to a workers'
compensation claimant pursuant to the workers'
compensation law or plan.
``(F) Workers' compensation settlement agreement.--
The term `workers' compensation settlement agreement'
means an agreement, which includes a commutation
agreement or compromise agreement, or any combination
of both, between a claimant and one or more workers'
compensation payers which--
``(i) forecloses the possibility of future
payment of some or all workers' compensation
benefits involved; and
``(ii)(I) compensates the claimant for a
work-related injury or illness as provided for
by a workers' compensation law or plan; or
``(II) eliminates cause for litigation
involving issues in dispute between the
claimant and payer.''.
(b) Satisfaction of Secondary Payer Requirements Through Use of
Qualified Medicare Set-Asides Under Workers' Compensation Settlement
Agreements.--Section 1862 of the Social Security Act (42 U.S.C. 1395y),
as amended by subsection (a), is further amended by adding at the end
the following new subsection:
``(q) Treatment of Qualified Medicare Set-Asides Under Workers'
Compensation Settlement Agreements.--
``(1) Satisfaction of secondary payer requirements through
use of qualified medicare set-asides.--
``(A) Full satisfaction of claim obligations.--
``(i) In general.--If a workers'
compensation settlement agreement, related to a
claim of a workers' compensation claimant,
includes a qualified Medicare set-aside (as
defined in paragraph (2)), such set-aside shall
satisfy any obligation with respect to the
present or future payment reimbursement under
subsection (b)(2) with respect to such claim.
The Secretary shall have no further recourse,
directly or indirectly, under this title with
respect to such agreement.
``(ii) Rule of construction.--Nothing in
this section shall be construed as requiring
the submission of a Medicare set-aside to the
Secretary.
``(B) Medicare set-aside and medicare set-aside
amount defined.--For purposes of this subsection:
``(i) Medicare set-aside.--The term
`Medicare set-aside' means, with respect to a
workers' compensation settlement agreement, a
provision in the agreement that provides for a
payment of a lump sum, annuity, a combination
of a lump sum and an annuity, or other amount
that is in full satisfaction of the obligation
described in subparagraph (A) for items and
services that the workers' compensation
claimant under the agreement received or is
likely to receive under the applicable workers'
compensation law and for which payment would be
made under this title, but for subsection
(b)(2)(A).
``(ii) Medicare set-aside amount.--The term
`Medicare set-aside amount' means, with respect
to a Medicare set-aside, the actual dollar
amount provided for in clause (i).
``(2) Qualified medicare set-aside.--
``(A) Requirements of qualified medicare set-
aside.--For purposes of this subsection, the term
`qualified Medicare set-aside' is a Medicare set-aside
in which the Medicare set-aside amount reasonably takes
into account the full payment obligation described in
paragraph (1)(A), while meeting the requirements of
subparagraphs (B) and (C) and giving due consideration
to the following:
``(i) The illness or injury giving rise to
the workers' compensation claim involved.
``(ii) The age and life expectancy of the
claimant involved.
``(iii) The reasonableness of and necessity
for future medical expenses for treatment of
the illness or injury involved.
``(iv) The duration of and limitation on
benefits payable under the workers'
compensation law or plan involved.
``(v) The regulations and case law relevant
to the State workers' compensation law or plan
involved.
``(B) Items and services included.--A qualified
Medicare set-aside--
``(i) shall include payment for items and
services that are covered and otherwise payable
under this title as of the effective date of
the workers' compensation settlement agreement
and that are covered by the workers'
compensation law or plan; and
``(ii) is not required to provide for
payment for items and services that are not
described in clause (i).
``(C) Payment requirements.--
``(i) Required use of workers' compensation
fee schedule.--
``(I) In general.--Except in the
case of an optional direct payment of a
Medicare set-aside made under paragraph
(5)(A), the set-aside amount shall be
based upon the payment amount for items
and services under the workers'
compensation fee schedule (effective as
of the date of the agreement)
applicable to the workers' compensation
law or plan involved.
``(II) Workers' compensation fee
schedule defined.--For purposes of this
subsection, the term `workers'
compensation fee schedule' means, with
respect to a workers' compensation law
or plan of a State or a similar plan
applicable in a State, the schedule of
payment amounts the State has
established to pay providers for items
and services furnished to workers who
incur a work-related injury or illness
as defined under such law or plan (or
in the absence of such a schedule, the
applicable medical reimbursement rate
under such law or plan).
``(ii) Optional proportional adjustment for
compromise settlement agreements.--
``(I) In general.--In the case of a
compromise settlement agreement, a
claimant or workers' compensation payer
who is party to the agreement may elect
to calculate the Medicare set-aside
amount of the agreement 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 or contested
portion of the claim not been subject
to a compromise agreement. The
percentage reduction shall be equal to
the denied or contested percentage of
such total settlement. Such election
may be made by a party to the agreement
only with the written consent of the
other party to the agreement.
``(II) Application.--If the
claimant or workers' compensation payer
elects to calculate the Medicare set-
aside amount under this clause, the
Medicare set-aside shall be deemed a
qualified Medicare set-aside.
``(D) Certain medicare set-asides with safe harbor
amount deemed qualified medicare set-asides.--
``(i) In general.--For purposes of this
section and subject to clause (iv), a Medicare
set-aside of a workers' compensation settlement
agreement shall be deemed a qualified Medicare
set-aside if the Medicare set-aside amount
involved is the safe harbor amount for the
agreement and the agreement does not exceed
$250,000.
``(ii) Written consent.--A safe harbor
amount, with respect to a workers' compensation
agreement, shall be treated as the Medicare
set-aside amount for such agreement for
purposes of clause (i) only upon written
consent of all parties to the agreement.
``(iii) Safe harbor amount defined.--For
purposes of this subsection, the term `safe
harbor amount' means, with respect to a
workers' compensation settlement agreement, 15
percent of the total settlement amount of the
agreement (as determined under subsection
(p)(2)), excluding repayment of conditional
payments and previously settled portions of the
claim involved. In applying the previous
sentence for purposes of determining the safe
harbor amount, with respect to a workers'
compensation agreement, if the agreement
includes an annuity, the cost (but not the
payout of the annuity) shall be included in
determining the total settlement amount of the
agreement.
``(iv) Mandatory direct payment of safe
harbor amount.--A Medicare set-aside of a
worker's compensation settlement agreement
described in this paragraph may not be treated
as a qualified set-aside under clause (i)
unless an election is made under paragraph
(5)(A) to transfer to the Secretary a direct
payment of such set-aside.
``(E) Secretarial authority with respect to deemed
qualified medicare set-asides with safe harbor
amount.--
``(i) Determination.--If the Secretary
determines, based on the data described in
clause (ii), that the provisions of
subparagraph (D) have caused a significant
negative financial impact (as specified by the
Chief Actuary of the Centers for Medicare &
Medicaid Services) on the Federal Hospital
Insurance Trust Fund under section 1817 or the
Federal Supplementary Medical Insurance Trust
Fund under section 1841, then the Secretary
shall adopt rules to reduce such impact by
modifying the amount of the percent described
in subparagraph (D)(iii).
``(ii) Required data.--The determination
under clause (i) shall be based on data on--
``(I) the projected effect of the
provisions described in such paragraph
on the Federal Hospital Insurance Trust
Fund under section 1817 or the Federal
Supplementary Medical Insurance Trust
Fund under section 1841 during the
three-year period beginning on the date
of the enactment of this subsection; as
compared to
``(II) data on the effect on such
trust funds of the provisions of
subsection (b), as in effect during the
three-year period prior to such date of
enactment.
``(3) Process for approval of qualified medicare set-
asides.--
``(A) Optional prior approval by secretary.--A
party to a workers' compensation settlement agreement
that includes a Medicare set-aside may submit to the
Secretary the Medicare set-aside amount for approval of
the set-aside as a qualified Medicare set-aside. The
set-aside shall be submitted in accordance with a
procedure specified by the Secretary.
``(B) Notice of determination of approval or
disapproval.--Not later than 60 days after the date on
which the Secretary receives a submission under
subparagraph (A), the Secretary shall notify in writing
the parties to the workers' compensation settlement
agreement of the determination of approval or
disapproval. If the determination disapproves such
submission the Secretary shall include with such
notification the specific reasons for the disapproval.
A determination that disapproves a submission is not
valid if the determination does not include a specific
explanation of each deficiency of the submission.
``(4) Appeals.--
``(A) In general.--A party to a workers'
compensation settlement agreement that is dissatisfied
with a determination under paragraph (3)(B), upon
filing a request for reconsideration with the Secretary
not later than 60 days after the date of notice of such
determination, shall be entitled to--
``(i) reconsideration of the determination
by the Secretary (with respect to such
determination);
``(ii) a hearing before an administrative
judge thereon after such reconsideration; and
``(iii) judicial review of the Secretary's
final determination after such hearing.
``(B) Deadlines for decisions.--
``(i) Reconsiderations.--
``(I) In general.--The Secretary
shall conduct and conclude a
reconsideration of a determination
under subparagraph (A)(i) and mail the
notice of the decision of such
reconsideration to the party involved
by not later than the last day of the
30-day period beginning on the date
that a request for such reconsideration
has been timely filed.
``(II) Appeals of
reconsiderations.--If a party to the
workers' compensation settlement
involved is dissatisfied with the
Secretary's decision under subclause
(I) that party may file an appeal
within the 30-day period after the date
of receipt of the notice of the
decision under such subclause and
request a hearing before an
administrative law judge.
``(III) Failure by secretary to
provide notice.--In the case of a
failure by the Secretary to mail the
notice of the decision under subclause
(I) by the last day of the period
described in such subclause, the
Secretary shall be deemed to have
approved the submission as submitted
under paragraph (3)(A).
``(ii) Hearings.--
``(I) In general.--An
administrative law judge shall conduct
and conclude a hearing on a decision of
the Secretary under clause (i) and
render a decision on such hearing by
not later than the last day of the 90-
day period beginning on the date that a
request for such hearing has been
timely filed.
``(II) Judicial review.--A decision
under subclause (I) by an
administrative law judge constitutes a
final agency action and is subject to
judicial review.
``(III) Failure by administrative
law judge to render timely decision.--
In the case of a failure by an
administrative law judge to render a
decision under subclause (I) by the
last day of the period described in
such subclause, the party requesting
the hearing may seek judicial review of
the decision under clause (i),
notwithstanding any requirements for a
hearing for purposes of the party's
right to such judicial review.
``(5) Administration of medicare set-aside provisions;
protection from certain liability.--
``(A) Optional direct payment of medicare set-aside
amount.--
``(i) Election for direct payment of
medicare set-aside.--With respect to a claim
for which a workers' compensation settlement
agreement is established, a claimant or
workers' compensation payer who is party to the
agreement may elect, but is not required, to
transfer to the Secretary a direct payment of
the qualified Medicare set-aside. With respect
to a qualified Medicare set-aside paid directly
to the Secretary, the parties involved may
calculate the Medicare set-aside amount of such
set-aside using any of the following methods:
``(I) In the case of any Medicare
set-aside of a compromise settlement
agreement under paragraph (2)(C)(ii),
the amount calculated in accordance
with such paragraph.
``(II) In the case of any Medicare
set-aside, the amount based upon the
payment amount for items and services
under the workers' compensation fee
schedule (effective as of the date of
the agreement) applicable to the
workers' compensation law or plan
involved, in accordance with paragraph
(2)(C)(i)(I).
``(III) In the case of any Medicare
set-aside, the payment amount
applicable to the items and services
under this title as in effect on the
effective date of the agreement.
Such transfer shall be in accordance with a
procedure established by the Secretary and
shall be made only upon written consent of the
other party to the agreement.
``(ii) Election satisfying liability.--An
election made under clause (i), with respect to
a qualified Medicare set-aside shall satisfy
any payment, in relation to the underlying
claim of the related workers' compensation
settlement agreement, required under subsection
(b)(2) to be made by the claimant or payer to
the Secretary. The Secretary shall have no
further recourse, directly or indirectly, under
this title with respect to such agreement.
``(B) Protection from certain liability.--
``(i) Liability for medicare set-aside
payment greater than payment under workers'
compensation law.--No workers' compensation
claimant, workers' compensation payer,
employer, administrator of the Medicare set-
aside, legal representative of the claimant,
payer, employer, or administrator, or any other
party related to the claimant, payer, employer,
or administrator shall be liable for any
payment amount established under a Medicare
set-aside for an item or service provided to
the claimant that is greater than the payment
amount for the item or service established
under the workers' compensation fee schedule
(or in the absence of such schedule, the
medical reimbursement rate) under the
compensation law or plan of the jurisdiction
where the agreement will be effective.
``(ii) Liability for provider charges
greater than payment under workers'
compensation agreement.--With respect to a
workers' compensation settlement agreement, a
provider may not bill (or collect any amount
from) the workers' compensation claimant,
workers' compensation payer, employer,
administrator of the Medicare set-aside, legal
representative of the claimant, payer,
employer, or administrator, or any other party
related to the claimant, payer, employer, or
administrator an amount for items and services
provided to the claimant that is greater than
the payment rate for such items and services
established under the Medicare set-aside of the
agreement. No person is liable for payment of
any amounts billed for an item or service in
violation of the previous sentence. If a
provider willfully bills (or collects an
amount) for such an item or service in
violation of such sentence, the Secretary may
apply sanctions against the provider in
accordance with section 1842(j)(2) in the same
manner as such section applies with respect to
a physician. Paragraph (4) of section 1842(j)
shall apply under this clause in the same
manner as such paragraph applies under such
section.
``(6) Treatment of state workers' compensation law.--For
purposes of this subsection and subsection (p), if a workers'
compensation settlement agreement is accepted, reviewed,
approved, or otherwise finalized in accordance with the
workers' compensation law of the jurisdiction in which such
agreement will be effective, such acceptance, review, approval,
or other finalization shall be deemed conclusive as to any and
all matters within the jurisdiction of the workers'
compensation law, including the determination of reasonableness
of the settlement value; any allocations of settlement funds;
the projection of future indemnity or medical benefits that may
be payable under the State workers' compensation law; and, in
the case of a compromise agreement, the total amount that could
have been payable for a claim which is the subject of such
agreement in accordance with paragraph (2)(C)(ii). A
determination made by applicable authority for a jurisdiction
that a workers' compensation settlement agreement is in
accordance with the workers' compensation law of the
jurisdiction shall not be subject to review by the
Secretary.''.
(c) Conforming Amendments.--Subsection (b) of such section is
further amended--
(1) in paragraph (2)(B)(ii), by striking ``A primary plan''
and inserting ``Subject to subsections (p) and (q), a primary
plan'';
(2) in paragraph (2)(B)(iii)--
(A) in the first sentence, by striking ``In order
to recover payment'' and inserting ``Subject to
subsection (q), in order to recover payment''; and
(B) in the third sentence, by striking ``In
addition'' and inserting ``Subject to subsection (q),
in addition''; and
(3) in paragraph (3)(A), by striking ``There is established
a private cause of action'' and inserting ``Subject to
subsection (q), there is established a private cause of
action''.
(d) Modernizing Terminology for Purposes of Medicare Secondary
Payer Provisions.--Subsection (b)(2)(A) of such section is amended by
striking ``workmen's compensation law or plan'' and inserting
``workers' compensation law or plan'' each place it appears.
SEC. 3. LIMITATION ON LIABILITY.
The parties to a workers' compensation settlement agreement which
met the provisions of section 1862(b) of the Social Security Act (42
U.S.C. 1395y(b)) on the effective date of settlement shall be accepted
as meeting the requirements of such section notwithstanding changes in
law, regulations, or administrative interpretation of such provisions
after the effective date of such settlement. Nothing in section 1862(b)
of the Social Security Act (42 U.S.C. 1395y(b)) shall authorize the
Secretary of Health and Human Services to impose liability that is
additional to the liability in effect on the date of the enactment of
this Act with respect to a workers' compensation settlement agreement
the effective date of which is before such date of enactment, except in
the case of fraud.
SEC. 4. EFFECTIVE DATE.
The amendments made by this Act shall apply to a workers'
compensation settlement agreement with an effective date on or after
the date of the enactment of this Act.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Health.
Referred to the Subcommittee on Health.
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