I 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Medicare Secondary 

5 Payer and Workers’ Compensation Settlement Agree6 ments Act of 2013’’. 


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1 SEC. 2. APPLICATION OF MEDICARE SECONDARY PAYER 

2 RULES TO CERTAIN WORKERS’ COMPENSA3 TION SETTLEMENT AGREEMENTS AND 

4 QUALIFIED MEDICARE SET-ASIDE PROVI5 SIONS. 

6 (a) THRESHOLD FOR SECONDARY PAYER PROVI7 SIONS FOR CERTAIN WORKERS’ COMPENSATION SETTLE8 MENT AGREEMENTS.—Section 1862 of the Social Security 

9 Act (42 U.S.C. 1395y) is amended— 

10 (1) in subsection (b)(2)(A)(ii), by inserting 

11 ‘‘subject to subsection (p),’’ after ‘‘(ii)’’; and 

12 (2) by adding at the end the following new sub13 section: 

14 ‘‘(p) THRESHOLD FOR SECONDARY PAYER PROVI15 SIONS FOR CERTAIN WORKERS’ COMPENSATION SETTLE16 MENT AGREEMENTS.— 

17 ‘‘(1) IN GENERAL.—A workers’ compensation 

18 law or plan shall not be treated as a primary plan 

19 for purposes of subsection (b) with respect to a 

20 workers’ compensation settlement agreement if the 

21 agreement (or claimant under the agreement) meets 

22 any of the following requirements: 

23 ‘‘(A) TOTAL SETTLEMENT AMOUNT NOT

24 EXCEEDING $25,000.—Such agreement has a 

25 total settlement amount (as determined under 

26 paragraph (2)) that does not exceed $25,000 or 


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1 such greater amount as the Secretary may 

2 specify in regulations. 

3 ‘‘(B) LIKELY INELIGIBILITY OF WORKERS’ 

4 COMPENSATION CLAIMANT FOR MEDICARE BEN5 EFITS.—The claimant subject to such agree6 ment— 

7 ‘‘(i) is not eligible for benefits under 

8 this title as of the effective date of the 

9 agreement; and 

10 ‘‘(ii) is unlikely to become so eligible, 

11 as determined under paragraph (3), within 

12 30 months after such effective date. 

13 ‘‘(C) NO FUTURE WORKERS’ COMPENSA14 TION MEDICAL EXPENSES.—The claimant sub15 ject to such agreement is not eligible for pay16 ment of medical expenses incurred after the ef17 fective date of the agreement from the workers’ 

18 compensation law or plan of the jurisdiction in 

19 which such agreement will be effective. 

20 ‘‘(D) NO LIMITATION ON FUTURE WORK21 ERS’ COMPENSATION MEDICAL EXPENSES.— 

22 Such agreement does not limit or extinguish the 

23 right of the claimant to payment of medical ex24 penses incurred after the effective date of such 

25 agreement by the workers’ compensation law or 


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1 plan of the jurisdiction in which the agreement 

2 will be effective. 

3 ‘‘(2) DETERMINATION OF TOTAL SETTLEMENT

4 AMOUNT OF WORKERS’ COMPENSATION SETTLE5 MENT AGREEMENT.—For purposes of paragraph 

6 (1)(A) and subsection (q) and with respect to a 

7 work-related injury or illness that is the subject of 

8 a workers’ compensation settlement agreement, the 

9 total settlement amount of the agreement is the sum 

10 of monetary wage replacement benefits, attorney 

11 fees, all future medical expenses, repayment of Medi12 care conditional payments, payout totals for annu13 ities to fund the expenses listed above, and any pre14 viously settled portion of the workers’ compensation 

15 claim. 

16 ‘‘(3) DETERMINATION OF LIKELY INELIGI17 BILITY OF CLAIMANT FOR MEDICARE BENEFITS.— 

18 For purposes of paragraph (1)(B)(ii), a workers’ 

19 compensation claimant shall be deemed unlikely to 

20 become eligible for benefits under this title within 30 

21 months after the effective date of the agreement un22 less, as of the effective date of the agreement, such 

23 claimant is insured for disability insurance benefits 

24 under section 223(c)(1) and is described in any of 

25 the following subparagraphs: 


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1 ‘‘(A) AWARDED DISABILITY BENEFITS.— 

2 The individual has been awarded such disability 

3 insurance benefits. 

4 ‘‘(B) APPLIED FOR DISABILITY.—The indi5 vidual has applied for such disability insurance 

6 benefits. 

7 ‘‘(C) ANTICIPATES APPEAL.—The indi8 vidual has been denied such disability insurance 

9 benefits but anticipates appealing that decision. 

10 ‘‘(D) APPEALING OR REFILING.—The indi11 vidual is in the process of appealing or refiling 

12 for such disability insurance benefits. 

13 ‘‘(E) MINIMUM AGE.—The individual is at 

14 least 62 years and 6 months of age. 

15 ‘‘(F) END-STAGE RENAL DISEASE.—The 

16 individual is medically determined to have end17 stage renal disease but does not yet qualify for 

18 health benefits under section 226A based on 

19 such disease. 

20 ‘‘(4) DEFINITIONS.—For purposes of this sub21 section and subsection (q): 

22 ‘‘(A) COMPROMISE AGREEMENT.—The 

23 term ‘compromise agreement’ means a workers’ 

24 compensation settlement agreement that— 


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1 ‘‘(i) applies to a workers’ compensa2 tion claim that is denied or contested, in 

3 whole or in part, by a workers’ compensa4 tion payer involved under the workers’ 

5 compensation law or plan applicable to the 

6 jurisdiction in which the agreement has 

7 been settled; and 

8 ‘‘(ii) does not provide for a payment 

9 of the full amount of benefits sought or 

10 that may be payable under the workers’ 

11 compensation claim. 

12 ‘‘(B) COMMUTATION AGREEMENT.—The 

13 term ‘commutation agreement’ means a work14 ers’ compensation settlement agreement to set15 tle all or a portion of a workers’ compensation 

16 claim, in which— 

17 ‘‘(i) liability for past and future bene18 fits is not disputed; and 

19 ‘‘(ii) the parties to the agreement 

20 agree to include payment for future work21 ers’ compensation benefits payable after 

22 the date on which the agreement becomes 

23 effective. 


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1 ‘‘(C) WORKERS’ COMPENSATION CLAIM2 ANT.—The term ‘workers’ compensation claim3 ant’ means a worker who— 

4 ‘‘(i) is or may be covered under a 

5 workers’ compensation law or plan; and 

6 ‘‘(ii) submits a claim or accepts bene7 fits under such law or plan for a work-re8 lated injury or illness. 

9 ‘‘(D) WORKERS’ COMPENSATION LAW OR

10 PLAN.— 

11 ‘‘(i) IN GENERAL.—The term ‘work12 ers’ compensation law or plan’ means a 

13 law or program administered by a State or 

14 the United States to provide compensation 

15 to workers for a work-related injury or ill16 ness (or for disability or death caused by 

17 such an injury or illness), including the 

18 Longshore and Harbor Workers’ Com19 pensation Act (33 U.S.C. 901–944, 948– 

20 950), chapter 81 of title 5, United States 

21 Code (known as the Federal Employees 

22 Compensation Act), the Black Lung Bene23 fits Act (30 U.S.C. 931 et seq.), and part 

24 C of title 4 of the Federal Coal Mine and 

25 Safety Act (30 U.S.C. 901 et seq.), but not 


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1 including the Act of April 22, 1908 (45 

2 U.S.C. 51 et seq.) (popularly referred to as 

3 the Federal Employer’s Liability Act). 

4 ‘‘(ii) INCLUSION OF SIMILAR COM5 PENSATION PLAN.—Such term includes a 

6 similar compensation plan established by 

7 an employer that is funded by such em8 ployer or the insurance carrier of such em9 ployer to provide compensation to a worker 

10 of such employer for a work-related injury 

11 or illness. 

12 ‘‘(E) WORKERS’ COMPENSATION PAYER.— 

13 The term ‘workers’ compensation payer’ means, 

14 with respect to a workers’ compensation law or 

15 plan, a workers’ compensation insurer, self-in16 surer, employer, individual, or any other entity 

17 that is or may be liable for the payment of ben18 efits to a workers’ compensation claimant pur19 suant to the workers’ compensation law or plan. 

20 ‘‘(F) WORKERS’ COMPENSATION SETTLE21 MENT AGREEMENT.—The term ‘workers’ com22 pensation settlement agreement’ means an 

23 agreement, which includes a commutation 

24 agreement or compromise agreement, or any 

25 combination of both, between a claimant and 


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1 one or more workers’ compensation payers 

2 which— 

3 ‘‘(i) forecloses the possibility of future 

4 payment of some or all workers’ compensa5 tion benefits involved; and 

6 ‘‘(ii)(I) compensates the claimant for 

7 a work-related injury or illness as provided 

8 for by a workers’ compensation law or 

9 plan; or 

10 ‘‘(II) eliminates cause for litigation in11 volving issues in dispute between the 

12 claimant and payer.’’. 

13 (b) SATISFACTION OF SECONDARY PAYER REQUIRE14 MENTS THROUGH USE OF QUALIFIED MEDICARE SET15 ASIDES UNDER WORKERS’ COMPENSATION SETTLEMENT

16 AGREEMENTS.—Section 1862 of the Social Security Act 

17 (42 U.S.C. 1395y), as amended by subsection (a), is fur18 ther amended by adding at the end the following new sub19 section: 

20 ‘‘(q) TREATMENT OF QUALIFIED MEDICARE SET21 ASIDES UNDER WORKERS’ COMPENSATION SETTLEMENT

22 AGREEMENTS.— 

23 ‘‘(1) SATISFACTION OF SECONDARY PAYER RE24 QUIREMENTS THROUGH USE OF QUALIFIED MEDI25 CARE SET-ASIDES.— 


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1 ‘‘(A) FULL SATISFACTION OF CLAIM OBLI2 GATIONS.— 

3 ‘‘(i) IN GENERAL.—If a workers’ com4 pensation settlement agreement, related to 

5 a claim of a workers’ compensation claim6 ant, includes a qualified Medicare set-aside 

7 (as defined in paragraph (2)), such set8 aside shall satisfy any obligation with re9 spect to the present or future payment re10 imbursement under subsection (b)(2) with 

11 respect to such claim. The Secretary shall 

12 have no further recourse, directly or indi13 rectly, under this title with respect to such 

14 agreement. 

15 ‘‘(ii) RULE OF CONSTRUCTION.— 

16 Nothing in this section shall be construed 

17 as requiring the submission of a Medicare 

18 set-aside to the Secretary. 

19 ‘‘(B) MEDICARE SET-ASIDE AND MEDI20 CARE SET-ASIDE AMOUNT DEFINED.—For pur21 poses of this subsection: 

22 ‘‘(i) MEDICARE SET-ASIDE.—The 

23 term ‘Medicare set-aside’ means, with re24 spect to a workers’ compensation settle25 ment agreement, a provision in the agreeVerDate Mar 15 2010 05:01 May 18, 2013 Jkt 029200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H1982.IH H1982

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1 ment that provides for a payment of a 

2 lump sum, annuity, a combination of a 

3 lump sum and an annuity, or other 

4 amount that is in full satisfaction of the 

5 obligation described in subparagraph (A) 

6 for items and services that the workers’ 

7 compensation claimant under the agree8 ment received or is likely to receive under 

9 the applicable workers’ compensation law 

10 and for which payment would be made 

11 under this title, but for subsection 

12 (b)(2)(A). 

13 ‘‘(ii) MEDICARE SET-ASIDE

14 AMOUNT.—The term ‘Medicare set-aside 

15 amount’ means, with respect to a Medicare 

16 set-aside, the actual dollar amount pro17 vided for in clause (i). 

18 ‘‘(2) QUALIFIED MEDICARE SET-ASIDE.— 

19 ‘‘(A) REQUIREMENTS OF QUALIFIED MEDI20 CARE SET-ASIDE.—For purposes of this sub21 section, the term ‘qualified Medicare set-aside’ 

22 is a Medicare set-aside in which the Medicare 

23 set-aside amount reasonably takes into account 

24 the full payment obligation described in para25 graph (1)(A), while meeting the requirements of 


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1 subparagraphs (B) and (C) and giving due con2 sideration to the following: 

3 ‘‘(i) The illness or injury giving rise to 

4 the workers’ compensation claim involved. 

5 ‘‘(ii) The age and life expectancy of 

6 the claimant involved. 

7 ‘‘(iii) The reasonableness of and ne8 cessity for future medical expenses for 

9 treatment of the illness or injury involved. 

10 ‘‘(iv) The duration of and limitation 

11 on benefits payable under the workers’ 

12 compensation law or plan involved. 

13 ‘‘(v) The regulations and case law rel14 evant to the State workers’ compensation 

15 law or plan involved. 

16 ‘‘(B) ITEMS AND SERVICES INCLUDED.—A 

17 qualified Medicare set-aside— 

18 ‘‘(i) shall include payment for items 

19 and services that are covered and otherwise 

20 payable under this title as of the effective 

21 date of the workers’ compensation settle22 ment agreement and that are covered by 

23 the workers’ compensation law or plan; 

24 and 


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1 ‘‘(ii) is not required to provide for 

2 payment for items and services that are 

3 not described in clause (i). 

4 ‘‘(C) PAYMENT REQUIREMENTS.— 

5 ‘‘(i) REQUIRED USE OF WORKERS’ 

6 COMPENSATION FEE SCHEDULE.— 

7 ‘‘(I) IN GENERAL.—Except in the 

8 case of an optional direct payment of 

9 a Medicare set-aside made under 

10 paragraph (5)(A), the set-aside 

11 amount shall be based upon the pay12 ment amount for items and services 

13 under the workers’ compensation fee 

14 schedule (effective as of the date of 

15 the agreement) applicable to the work16 ers’ compensation law or plan in17 volved. 

18 ‘‘(II) WORKERS’ COMPENSATION

19 FEE SCHEDULE DEFINED.—For pur20 poses of this subsection, the term 

21 ‘workers’ compensation fee schedule’ 

22 means, with respect to a workers’ 

23 compensation law or plan of a State 

24 or a similar plan applicable in a State, 

25 the schedule of payment amounts the 


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1 State has established to pay providers 

2 for items and services furnished to 

3 workers who incur a work-related in4 jury or illness as defined under such 

5 law or plan (or in the absence of such 

6 a schedule, the applicable medical re7 imbursement rate under such law or 

8 plan). 

9 ‘‘(ii) OPTIONAL PROPORTIONAL AD10 JUSTMENT FOR COMPROMISE SETTLEMENT

11 AGREEMENTS.— 

12 ‘‘(I) IN GENERAL.—In the case 

13 of a compromise settlement agree14 ment, a claimant or workers’ com15 pensation payer who is party to the 

16 agreement may elect to calculate the 

17 Medicare set-aside amount of the 

18 agreement by applying a percentage 

19 reduction to the Medicare set-aside 

20 amount for the total settlement 

21 amount that could have been payable 

22 under the applicable workers’ com23 pensation law or similar plan involved 

24 had the denied or contested portion of 

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1 promise agreement. The percentage 

2 reduction shall be equal to the denied 

3 or contested percentage of such total 

4 settlement. Such election may be 

5 made by a party to the agreement 

6 only with the written consent of the 

7 other party to the agreement. 

8 ‘‘(II) APPLICATION.—If the 

9 claimant or workers’ compensation 

10 payer elects to calculate the Medicare 

11 set-aside amount under this clause, 

12 the Medicare set-aside shall be 

13 deemed a qualified Medicare set-aside. 

14 ‘‘(D) CERTAIN MEDICARE SET-ASIDES

15 WITH SAFE HARBOR AMOUNT DEEMED QUALI16 FIED MEDICARE SET-ASIDES.— 

17 ‘‘(i) IN GENERAL.—For purposes of 

18 this section and subject to clause (iv), a 

19 Medicare set-aside of a workers’ compensa20 tion settlement agreement shall be deemed 

21 a qualified Medicare set-aside if the Medi22 care set-aside amount involved is the safe 

23 harbor amount for the agreement and the 

24 agreement does not exceed $250,000. 


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1 ‘‘(ii) WRITTEN CONSENT.—A safe 

2 harbor amount, with respect to a workers’ 

3 compensation agreement, shall be treated 

4 as the Medicare set-aside amount for such 

5 agreement for purposes of clause (i) only 

6 upon written consent of all parties to the 

7 agreement. 

8 ‘‘(iii) SAFE HARBOR AMOUNT DE9 FINED.—For purposes of this subsection, 

10 the term ‘safe harbor amount’ means, with 

11 respect to a workers’ compensation settle12 ment agreement, 15 percent of the total 

13 settlement amount of the agreement (as 

14 determined under subsection (p)(2)), ex15 cluding repayment of conditional payments 

16 and previously settled portions of the claim 

17 involved. In applying the previous sentence 

18 for purposes of determining the safe har19 bor amount, with respect to a workers’ 

20 compensation agreement, if the agreement 

21 includes an annuity, the cost (but not the 

22 payout of the annuity) shall be included in 

23 determining the total settlement amount of 

24 the agreement. 


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1 ‘‘(iv) MANDATORY DIRECT PAYMENT

2 OF SAFE HARBOR AMOUNT.—A Medicare 

3 set-aside of a worker’s compensation settle4 ment agreement described in this para5 graph may not be treated as a qualified 

6 set-aside under clause (i) unless an election 

7 is made under paragraph (5)(A) to trans8 fer to the Secretary a direct payment of 

9 such set-aside. 

10 ‘‘(E) SECRETARIAL AUTHORITY WITH RE11 SPECT TO DEEMED QUALIFIED MEDICARE SET12 ASIDES WITH SAFE HARBOR AMOUNT.— 

13 ‘‘(i) DETERMINATION.—If the Sec14 retary determines, based on the data de15 scribed in clause (ii), that the provisions of 

16 subparagraph (D) have caused a signifi17 cant negative financial impact (as specified 

18 by the Chief Actuary of the Centers for 

19 Medicare & Medicaid Services) on the Fed20 eral Hospital Insurance Trust Fund under 

21 section 1817 or the Federal Supplementary 

22 Medical Insurance Trust Fund under sec23 tion 1841, then the Secretary shall adopt 

24 rules to reduce such impact by modifying 


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1 the amount of the percent described in 

2 subparagraph (D)(iii). 

3 ‘‘(ii) REQUIRED DATA.—The deter4 mination under clause (i) shall be based on 

5 data on— 

6 ‘‘(I) the projected effect of the 

7 provisions described in such para8 graph on the Federal Hospital Insur9 ance Trust Fund under section 1817 

10 or the Federal Supplementary Medical 

11 Insurance Trust Fund under section 

12 1841 during the three-year period be13 ginning on the date of the enactment 

14 of this subsection; as compared to 

15 ‘‘(II) data on the effect on such 

16 trust funds of the provisions of sub17 section (b), as in effect during the 

18 three-year period prior to such date of 

19 enactment. 

20 ‘‘(3) PROCESS FOR APPROVAL OF QUALIFIED

21 MEDICARE SET-ASIDES.— 

22 ‘‘(A) OPTIONAL PRIOR APPROVAL BY SEC23 RETARY.—A party to a workers’ compensation 

24 settlement agreement that includes a Medicare 

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1 care set-aside amount for approval of the set2 aside as a qualified Medicare set-aside. The set3 aside shall be submitted in accordance with a 

4 procedure specified by the Secretary. 

5 ‘‘(B) NOTICE OF DETERMINATION OF AP6 PROVAL OR DISAPPROVAL.—Not later than 60 

7 days after the date on which the Secretary re8 ceives a submission under subparagraph (A), 

9 the Secretary shall notify in writing the parties 

10 to the workers’ compensation settlement agree11 ment of the determination of approval or dis12 approval. If the determination disapproves such 

13 submission the Secretary shall include with 

14 such notification the specific reasons for the 

15 disapproval. A determination that disapproves a 

16 submission is not valid if the determination 

17 does not include a specific explanation of each 

18 deficiency of the submission. 

19 ‘‘(4) APPEALS.— 

20 ‘‘(A) IN GENERAL.—A party to a workers’ 

21 compensation settlement agreement that is dis22 satisfied with a determination under paragraph 

23 (3)(B), upon filing a request for reconsideration 

24 with the Secretary not later than 60 days after 


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1 the date of notice of such determination, shall 

2 be entitled to— 

3 ‘‘(i) reconsideration of the determina4 tion by the Secretary (with respect to such 

5 determination); 

6 ‘‘(ii) a hearing before an administra7 tive judge thereon after such reconsider8 ation; and 

9 ‘‘(iii) judicial review of the Secretary’s 

10 final determination after such hearing. 

11 ‘‘(B) DEADLINES FOR DECISIONS.— 

12 ‘‘(i) RECONSIDERATIONS.— 

13 ‘‘(I) IN GENERAL.—The Sec14 retary shall conduct and conclude a 

15 reconsideration of a determination 

16 under subparagraph (A)(i) and mail 

17 the notice of the decision of such re18 consideration to the party involved by 

19 not later than the last day of the 30- 

20 day period beginning on the date that 

21 a request for such reconsideration has 

22 been timely filed. 

23 ‘‘(II) APPEALS OF RECONSIDER24 ATIONS.—If a party to the workers’ 

25 compensation settlement involved is 


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1 dissatisfied with the Secretary’s deci2 sion under subclause (I) that party 

3 may file an appeal within the 30-day 

4 period after the date of receipt of the 

5 notice of the decision under such sub6 clause and request a hearing before 

7 an administrative law judge. 

8 ‘‘(III) FAILURE BY SECRETARY

9 TO PROVIDE NOTICE.—In the case of 

10 a failure by the Secretary to mail the 

11 notice of the decision under subclause 

12 (I) by the last day of the period de13 scribed in such subclause, the Sec14 retary shall be deemed to have ap15 proved the submission as submitted 

16 under paragraph (3)(A). 

17 ‘‘(ii) HEARINGS.— 

18 ‘‘(I) IN GENERAL.—An adminis19 trative law judge shall conduct and 

20 conclude a hearing on a decision of 

21 the Secretary under clause (i) and 

22 render a decision on such hearing by 

23 not later than the last day of the 90- 

24 day period beginning on the date that 


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1 a request for such hearing has been 

2 timely filed. 

3 ‘‘(II) JUDICIAL REVIEW.—A deci4 sion under subclause (I) by an admin5 istrative law judge constitutes a final 

6 agency action and is subject to judi7 cial review. 

8 ‘‘(III) FAILURE BY ADMINISTRA9 TIVE LAW JUDGE TO RENDER TIMELY

10 DECISION.—In the case of a failure by 

11 an administrative law judge to render 

12 a decision under subclause (I) by the 

13 last day of the period described in 

14 such subclause, the party requesting 

15 the hearing may seek judicial review 

16 of the decision under clause (i), not17 withstanding any requirements for a 

18 hearing for purposes of the party’s 

19 right to such judicial review. 

20 ‘‘(5) ADMINISTRATION OF MEDICARE SET-ASIDE

21 PROVISIONS; PROTECTION FROM CERTAIN LIABIL22 ITY.— 

23 ‘‘(A) OPTIONAL DIRECT PAYMENT OF

24 MEDICARE SET-ASIDE AMOUNT.— 


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1 ‘‘(i) ELECTION FOR DIRECT PAYMENT

2 OF MEDICARE SET-ASIDE.—With respect to 

3 a claim for which a workers’ compensation 

4 settlement agreement is established, a 

5 claimant or workers’ compensation payer 

6 who is party to the agreement may elect, 

7 but is not required, to transfer to the Sec8 retary a direct payment of the qualified 

9 Medicare set-aside. With respect to a quali10 fied Medicare set-aside paid directly to the 

11 Secretary, the parties involved may cal12 culate the Medicare set-aside amount of 

13 such set-aside using any of the following 

14 methods: 

15 ‘‘(I) In the case of any Medicare 

16 set-aside of a compromise settlement 

17 agreement under paragraph (2)(C)(ii), 

18 the amount calculated in accordance 

19 with such paragraph. 

20 ‘‘(II) In the case of any Medicare 

21 set-aside, the amount based upon the 

22 payment amount for items and serv23 ices under the workers’ compensation 

24 fee schedule (effective as of the date 

25 of the agreement) applicable to the 


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1 workers’ compensation law or plan in2 volved, in accordance with paragraph 

3 (2)(C)(i)(I). 

4 ‘‘(III) In the case of any Medi5 care set-aside, the payment amount 

6 applicable to the items and services 

7 under this title as in effect on the ef8 fective date of the agreement. 

9 Such transfer shall be in accordance with 

10 a procedure established by the Secretary 

11 and shall be made only upon written con12 sent of the other party to the agreement. 

13 ‘‘(ii) ELECTION SATISFYING LIABIL14 ITY.—An election made under clause (i), 

15 with respect to a qualified Medicare set16 aside shall satisfy any payment, in relation 

17 to the underlying claim of the related 

18 workers’ compensation settlement agree19 ment, required under subsection (b)(2) to 

20 be made by the claimant or payer to the 

21 Secretary. The Secretary shall have no fur22 ther recourse, directly or indirectly, under 

23 this title with respect to such agreement. 

24 ‘‘(B) PROTECTION FROM CERTAIN LIABIL25 ITY.— 


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1 ‘‘(i) LIABILITY FOR MEDICARE SET2 ASIDE PAYMENT GREATER THAN PAYMENT

3 UNDER WORKERS’ COMPENSATION LAW.— 

4 No workers’ compensation claimant, work5 ers’ compensation payer, employer, admin6 istrator of the Medicare set-aside, legal 

7 representative of the claimant, payer, em8 ployer, or administrator, or any other 

9 party related to the claimant, payer, em10 ployer, or administrator shall be liable for 

11 any payment amount established under a 

12 Medicare set-aside for an item or service 

13 provided to the claimant that is greater 

14 than the payment amount for the item or 

15 service established under the workers’ com16 pensation fee schedule (or in the absence 

17 of such schedule, the medical reimburse18 ment rate) under the compensation law or 

19 plan of the jurisdiction where the agree20 ment will be effective. 

21 ‘‘(ii) LIABILITY FOR PROVIDER

22 CHARGES GREATER THAN PAYMENT

23 UNDER WORKERS’ COMPENSATION AGREE24 MENT.—With respect to a workers’ com25 pensation settlement agreement, a provider 


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1 may not bill (or collect any amount from) 

2 the workers’ compensation claimant, work3 ers’ compensation payer, employer, admin4 istrator of the Medicare set-aside, legal 

5 representative of the claimant, payer, em6 ployer, or administrator, or any other 

7 party related to the claimant, payer, em8 ployer, or administrator an amount for 

9 items and services provided to the claimant 

10 that is greater than the payment rate for 

11 such items and services established under 

12 the Medicare set-aside of the agreement. 

13 No person is liable for payment of any 

14 amounts billed for an item or service in 

15 violation of the previous sentence. If a pro16 vider willfully bills (or collects an amount) 

17 for such an item or service in violation of 

18 such sentence, the Secretary may apply 

19 sanctions against the provider in accord20 ance with section 1842(j)(2) in the same 

21 manner as such section applies with re22 spect to a physician. Paragraph (4) of sec23 tion 1842(j) shall apply under this clause 

24 in the same manner as such paragraph ap25 plies under such section. 


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1 ‘‘(6) TREATMENT OF STATE WORKERS’ COM2 PENSATION LAW.—For purposes of this subsection 

3 and subsection (p), if a workers’ compensation set4 tlement agreement is accepted, reviewed, approved, 

5 or otherwise finalized in accordance with the work6 ers’ compensation law of the jurisdiction in which 

7 such agreement will be effective, such acceptance, re8 view, approval, or other finalization shall be deemed 

9 conclusive as to any and all matters within the juris10 diction of the workers’ compensation law, including 

11 the determination of reasonableness of the settle12 ment value; any allocations of settlement funds; the 

13 projection of future indemnity or medical benefits 

14 that may be payable under the State workers’ com15 pensation law; and, in the case of a compromise 

16 agreement, the total amount that could have been 

17 payable for a claim which is the subject of such 

18 agreement in accordance with paragraph (2)(C)(ii). 

19 A determination made by applicable authority for a 

20 jurisdiction that a workers’ compensation settlement 

21 agreement is in accordance with the workers’ com22 pensation law of the jurisdiction shall not be subject 

23 to review by the Secretary.’’. 

24 (c) CONFORMING AMENDMENTS.—Subsection (b) of 

25 such section is further amended— 


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1 (1) in paragraph (2)(B)(ii), by striking ‘‘A pri2 mary plan’’ and inserting ‘‘Subject to subsections 

3 (p) and (q), a primary plan’’; 

4 (2) in paragraph (2)(B)(iii)— 

5 (A) in the first sentence, by striking ‘‘In 

6 order to recover payment’’ and inserting ‘‘Sub7 ject to subsection (q), in order to recover pay8 ment’’; and 

9 (B) in the third sentence, by striking ‘‘In 

10 addition’’ and inserting ‘‘Subject to subsection 

11 (q), in addition’’; and 

12 (3) in paragraph (3)(A), by striking ‘‘There is 

13 established a private cause of action’’ and inserting 

14 ‘‘Subject to subsection (q), there is established a pri15 vate cause of action’’. 

16 (d) MODERNIZING TERMINOLOGY FOR PURPOSES OF

17 MEDICARE SECONDARY PAYER PROVISIONS.—Subsection 

18 (b)(2)(A) of such section is amended by striking ‘‘work19 men’s compensation law or plan’’ and inserting ‘‘workers’ 

20 compensation law or plan’’ each place it appears. 

21 SEC. 3. LIMITATION ON LIABILITY. 

22 The parties to a workers’ compensation settlement 

23 agreement which met the provisions of section 1862(b) of 

24 the Social Security Act (42 U.S.C. 1395y(b)) on the effec25 tive date of settlement shall be accepted as meeting the 


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1 requirements of such section notwithstanding changes in 

2 law, regulations, or administrative interpretation of such 

3 provisions after the effective date of such settlement. 

4 Nothing in section 1862(b) of the Social Security Act (42 

5 U.S.C. 1395y(b)) shall authorize the Secretary of Health 

6 and Human Services to impose liability that is additional 

7 to the liability in effect on the date of the enactment of 

8 this Act with respect to a workers’ compensation settle9 ment agreement the effective date of which is before such 

10 date of enactment, except in the case of fraud. 

11 SEC. 4. EFFECTIVE DATE. 

12 The amendments made by this Act shall apply to a 

13 workers’ compensation settlement agreement with an ef14 fective date on or after the date of the enactment of this 

15 Act. 

Æ 


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