U.S. House of Representatives Introduce Workers’ Compensation Medicare Set-Aside Legislation

CMS, Medicare Set-Asides, MSP News on August 23, 2019
Posted by Jean S. Goldstein, JD, CMSP

You may recall that in 2018 we reported that a Senate Bill was introduced, “[t]o 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.”  As we described it, the Bill was a piece of legislation to band-aid the Medicare Set-Aside process.  The 2018 Senate Bill was referred to the Committee on Finance, however, it did not gain any additional traction.  Earlier this month, House Representatives Mike Thompson and George Holding introduced a virtually identical Bill in the House with the very same purpose as the 2018 Bill.  The 2019 House Bill can be found here.  Since introduction, the Bill has been referred to the Committee on Ways and Means and the Committee on Energy and Commerce.

The 2019 Bill is nearly verbatim from the 2018 Senate Bill with the exception being the title, which is the ‘‘Coordination of Medicare Payments and Worker’s Compensation Act’’ or the ‘‘COMP Act.”  As with the 2018 Bill, the key noteworthy provisions continue to:

  • Provide specifics for when Medicare Secondary Payer (MSP) obligations have been met. 
    • The Bill indicates that this is accomplished when a Medicare Set-Aside takes into account the full payment obligation as described in the Bill, which includes:
      • consideration of the illness or injury giving rise to the claim;
      • the age and life expectancy of the claimant;
      • the reasonableness of and necessity for future medical expense for future medical expense for the treatment of the illness or injury involved;
      • the duration of and limitation on benefits payment under the workers’ compensation law or plan involved; and
      • the regulations and case law relevant to the State workers’ compensation law or plan involved.
  • Clarify that approval of a WCMSA is optional.
    • The legislation is clear that CMS submission remains voluntary, and states that an MSA will either be approved or disapproved.  However, this wording begs the question: what is considered a “disapproval?”
  • Establish a formal appeal process for the Medicare Set-Aside review process.
    • The proposed process would require the following steps: (1) Reconsideration of the Determination (2) A Hearing before an Administrative Law Judge and (3) Judicial Review.
  • Address the finality of a workers’ compensation settlement, which includes a determination of reasonableness of the settlement value, which may include a projection of future indemnity or medical benefits as expected to be paid under the State workers’ compensation law.
    • This is an important point we often discuss here on our blog, particularly in light of the inherent costs, additional costs, and procedural challenges associated with securing approval of a WCMSA, even if costs are in line with the obligations imparted on a payer by state law. The CMS review process is voluntary, and comes at significant costs often greater than what is required under State workers’ compensation law.  This legislation is clarifying that a settlement may be deemed final, when approved in accordance with the workers’ compensation law of the jurisdiction.

It is significant that the Bill continues to note and recognize State workers’ compensation law because in general, state law dictates the standards of compensability, which means that reimbursement obligations will ultimately be controlled by state law; yet much of the CMS review and approval process is based upon setting aside funds that would be in excess of what is required under state law.  Moreover, as with last year’s Bill, the 2019 legislation appears to fix some of the inherent procedural problems associated with submitting an MSA to CMS for review, while simultaneously addressing that CMS submission is not mandatory nor required.  However, the proposed legislation does not specifically address or overcome the subjective process of an MSA evaluation, and how the review process must be corrected to address some of the challenges that often impede settlement.  As with the 2018 Bill, the 2019 Bill allows for an “optional direct payment of [a] Medicare Set-Aside amount.”  Specifically noting that, “…with respect to a claim for which a workers’ compensation settlement agreement is or has been 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 Medicare set-aside amount.”  This would likely enable a Medicare beneficiary to use Medicare coverage after settlement of a claim; however the specifics of how Medicare would coordinate such payment are obviously not part of this Bill. 

Interestingly, the 2019 Bill was introduced after CMS updated the Unified Agenda noting proposed rulemaking was forthcoming with respect to satisfying Medicare Secondary Payer obligations, as we reported recently.  It is quite possible that all focus on MSP issues will revolve around any proposed rulemaking.  Therefore, it is very likely that this Bill will once again fail to gain traction and progress beyond the Committees; however, we will continue to monitor the bill and report on any further developments.