H.R. 5284 – Medicare Secondary Payer and Workers’ Compensation Settlement Agreements Act of 2012

Medicare Set-Aside Blog on April 30, 2012
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On Friday April 27, 2012, Congressmen David Reichert (R-WA) and Mike Thompson (D-CA) introduced new MSP legislation currently titled:

“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.”

We will soon come to know it under the same name as given in the 109th, 100th and 111th congresses: the Medicare Secondary Payer and Workers’ Compensation Settlement Agreements Act of 2012. While the text of the bill itself continues to remain a mystery (bills are not sent to the Library of Congress from the Government Printing Office for a day or two after they are introduced to the floor of the house so we should have access to it later this week), I don’t anticipate that it will deviate too far from its previous three permutations, all of which died in committee. For a quick review for those who haven’t been following over the years:

109th Congress – H.R. 5309 proposed 5/4/06 by Congressman Shaw (R-FL – not reelected that year), 12 cosponsors
110th Congress – H.R. 2549 proposed 5/24/07 by Congressman Tanner (D-TN – not reelected in 2010), 22 cosponsors
111th Congress – H.R. 2641 proposed 5/21/09 again by Congressman Tanner, 5 cosponsors

Besides the total lack of support, the bills’ fundamental flaw was that they repeatedly attempted to legislatively fix an activity not governed by any statute or regulation. In fact, a Medicare Set-Aside Arrangement (MSA) is not even defined in any statute or regulation therefore it would be impossible to amend its problems with legislation. Another issue was that the bills would have had an incredibly difficult time scoring given that they looked to exempt from any type of MSP enforcement settlements of $250,000 or less. Regardless, no action was ever taken on any of them until Congressman Pete Stark (Ways & Means – Subcommittee on Heath) requested a GAO study in August 2010 that referenced H.R. 2641 prior to the bill dying in committee which was finally completed last month. I assume that is the spur for the renewed interest in reproposing the bill at this time.

American Insurance Association (AIA), National Council of Self Insurers (NCSI), Property Casualty Insurers Association of America (PCI), UWC – Strategic Services on Unemployment & Workers’ Compensation (UWC), Washington Self-Insurers Association (WSIA), American Association for Justice (AAJ), American Bar Association (ABA), Workers Injury Law and Advocacy Group (WILG) have all already voiced support for the new bill, all expressing disgust over the delays, the lack of appropriate or consistent standards and lack of appeal rights in the CMS WCMSA approval process. But much like Congress overlooking the fact that MSAs are not legislative in nature and cannot be fixed with legislation, these organizations are all overlooking the fact that the CMS system they want fixed legislatively is voluntary and they can easily fix their situation by not availing themselves of these voluntary determinations by CMS. Given the size and membership consistency of these organizations, the community could easily come together to form protocols to serve as MSP compliance standards and redefine CMS’ erroneous or overreaching interpretations of the MSP through the courts, but due to a continued lack of true understanding of the MSP and fear of future enforcements that may never occur whether CMS is involved in the settlement process or not, the industry continues to write large checks and complain about something that they do not need to avail themselves of. The use of an MSA is a risk management issue and needs to be treated as such. Other than to exclude benefits for payment of Medicare covered services related to an insurance settlement, judgment or other award, the federal government has no rights with regard to medical treatment that has not and may never occur in the future.

The current status is that the bill has been referred to Ways & Means and Energy and Commerce and lets hope that is not where the trail ends this time around. There is nothing more to say until the text of the bill becomes available to the public and can be analyzed. If anyone wants to review the last version so they have a point of comparison, it can be found at: http://www.govtrack.us/congress/bills/111/hr2641/text