Proposed Changes to Medicare Set-Asides Affect Workers’ Compensation Settlements

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The meeting of the 111th Congress was the one that saw Medicare Secondary Payer bill H.R. 2641 flop over and twitch.  The 110th saw that happen to H.R. 2549 also, and H.R. 5309 went the same way during the 109th. In case you don’t recall this particular bill in all its iterations, it addressed Medicare Set-Asides (“MSAs”) for workers’ compensation.

Now it’s reanimated in the form of H.R. 5284, which was introduced by Congressmen David Reichart (R-Washington) and Mike Thompson (D-California) on April 27th. The bill seeks to amend the Social Security Act, specifically section 1862. If you’re not familiar with that particular section, it’s the one that deals with Medicare’s secondary payer rules and set-asides with regard to workers’ compensation settlement agreements.  It’s the essentially the same bill that was proposed to the three previous Congresses -all of which died in committee–  and it was called by the same name which is assigned to it now: The Medicare Secondary Payer and Workers’ Compensation Settlement Agreements Act. This time, however, it will have the phrase ‘of 2012’ behind it.

Don’t know much about all this? Well, in short, Medicare requires that a trust fund be established in cases where injured workers will become eligible for Medicare during their claim period.  The funds are set aside as a stopgap for Medicare spending; this is to help conserve the resources of an already-overburdened Medicare system.

There is a catch, though: The Centers for Medicare and Medicaid Services (CMS) must approve any set-asides for trusts exceeding $25,000 before a claim can be closed. CMS has been roundly criticized for the length of time that it takes to review and approve those trusts, for the lack of consistency in its review standards for trust amounts, and for its lack of a process by which decisions can be appealed. H.R. 5284 aims to resolve delays and introduce consistent standards into the CMS set-asides process.

The Government Accountability Office (GAO) released a report on these problems in March of this year. According to the GAO, the average processing time for set-aside proposals went from 22 days in April 2010 up to 95 days in September 2011, which of course delayed case resolutions (CMS officials stated that they’d like to be able to wrap up reviews in 45 days). The report further stated that a backlog was created by a marked increase in submissions from 2008 to 2011, along with a change in the data system that slowed the process overall. It was noted that submissions that were ineligible altogether jumped in number significantly (by 148 percent) and this created a further backlog.

“This is a much-needed ‘common sense’ reform to ensure that Medicare claims are handled in a way that is more efficient so that the parties involved can move forward swiftly and with certainty to protect injured workers,” said Congressman Reichert.  “Our bill gives injured workers the confidence that their health care claims will be processed in a fair and timely way.”

You can see the full text of the bill in PDF format here. It will be interesting to see whether or not it suffers the same fate as its predecessors.

MSAs can be confusing when questions arise regarding when they are (or aren’t) required.  For additional clarification about how MSAs can affect your workers’ compensation settlement in Georgia, contact Moebes Law, LLC at 404-354-5432.



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