Friday, May 17, 2013

Workers' Compensation Medicare Set-aside Reform Bill Introduced in Congress

United States Representatives Dave Reichert (R-WA) and Mike Thompson (D-CA) introduced a bill in Congress this week that would amend the Medicare Secondary Payer Act and create significant changes to Medicare Set-asides and the CMS approval process in workers' compensation cases. The title of the proposed legislation is the "Medicare Secondary Payer and Workers' Compensation Settlement Agreements Act of 2013."
 
If enacted, the bill would establish a 60-day turnaround time for CMS to review MSA proposals in workers' compensation cases. For cases in which CMS does not approve the MSA proposal, CMS would be required to provide a specific explanation for each increase in order for the determination to be valid.
 
The bill would also create a formal appeals process for parties in a workers' compensation case to challenge CMS determinations. If CMS does not approve the MSA proposal, parties would have 60 days to file a reconsideration request, and CMS would have 30 days to respond or the original MSA proposal would automatically be deemed approved. Parties would have 30 days to request an ALJ hearing after an unfavorable response to a reconsideration request. If the ALJ issues an adverse decision or fails to issue a decision within 90 days, parties would then be able to seek judicial review of the CMS determination.
 
In disputed workers' compensation cases, the bill would allow the MSA amount to be proportionally reduced based on the extent to which the settlement amount reflects a compromise of the total amount of benefits that could have been payable under state law. This would allow disputed cases to be settled more easily and at lower costs, as CMS currently does not recognize such reductions for workers' compensation MSAs.
 
As an alternative to establishing an MSA account, parties would have the option to pay MSA funds directly to Medicare. Under this provision, Medicare would have no further recourse against the parties with respect to future medical treatment. 
 
In workers' compensation cases where the total settlement does not exceed $250,000.00, the bill would create a "safe harbor" for parties to fully satisfy Medicare's future interests by paying 15% of the current settlement amount directly to Medicare. The bill would allow this provision to be modified if it is determined to have a negative financial impact on Medicare.
 
The bill would limit the amount providers may charge for services for which payment would be issued from an MSA account. Providers would be unable to charge more than the applicable fee schedule, and the parties would not be liable for any amount in excess of the fee schedule.
 
The bill would also create criteria for determining when MSP provisions apply in workers' compensation cases. In addition, parties to a workers' compensation settlement that complies with current federal law could not be subject to any liability imposed by CMS as a result of any subsequent changes in federal law. Further, under the terms of the bill, if a settlement is approved by an appropriate authority under state law, the approval would be binding on CMS with respect to all issues to which state workers' compensation law applies, including any allocation of settlement funds and the projected amount of future indemnity and medical benefits that would otherwise be payable under state law.
 
 
Although the Medicare Compliance Group attorneys at Carr Allison have several concerns with the way the bill is worded, it is certainly a good start to address multiple problems that currently exist.  We will continue to monitor the progress of the bill and keep you informed of any updates from Congress.

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