I 

112TH CONGRESS 

2D SESSION H. R. 5284 

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 

APRIL 27, 2012 

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 2012’’. 


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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) is de22 scribed in any of the following subparagraphs: 

23 ‘‘(A) TOTAL SETTLEMENT AMOUNT NOT

24 EXCEEDING $25,000.—The 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 under the agreement— 

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

7 this title as of the effective date of the 

8 agreement; and 

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

10 as determined under paragraph (3), within 

11 30 months after such effective date. 

12 ‘‘(C) NO FUTURE MEDICAL EXPENSES.— 

13 The claimant under the agreement is not eligi14 ble for payment of medical expenses, incurred 

15 after the effective date of the agreement, that 

16 are available under the workers’ compensation 

17 law or plan of the jurisdiction in which such 

18 agreement will be effective. 

19 ‘‘(D) NO LIMITATION ON FUTURE MEDICAL

20 EXPENSES.—The agreement does not limit or 

21 extinguish the right of the claimant involved to 

22 payment of medical expenses, incurred after the 

23 effective date of such agreement, that are avail24 able under 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, as determined under subsection 

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1 fits under such section and is described in any of the 

2 following subparagraphs: 

3 ‘‘(A) AWARDED DISABILITY BENEFITS.— 

4 The individual has been awarded such disability 

5 insurance benefits. 

6 ‘‘(B) APPLIED FOR DISABILITY.—The indi7 vidual has applied for such disability insurance 

8 benefits. 

9 ‘‘(C) ANTICIPATES APPEAL.—The indi10 vidual has been denied such disability insurance 

11 benefits but anticipates appealing that decision. 

12 ‘‘(D) APPEALING OR REFILING.—The indi13 vidual is in the process of appealing or refiling 

14 for such disability insurance benefits. 

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

16 least 62 years and 6 months of age. 

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

18 individual has an end-stage renal disease condi19 tion but does not yet qualify for health benefits 

20 under section 226A based on such disease. 

21 ‘‘(4) DEFINITIONS.—For purposes of this sub22 section and subsection (q): 

23 ‘‘(A) COMPROMISE AGREEMENT.—The 

24 term ‘compromise agreement’ means a workers’ 

25 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, including a commutation agreement 

24 or compromise agreement, or any combination 

25 of both, between a workers’ compensation 


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1 claimant and one or more workers’ compensa2 tion payers which is intended— 

3 ‘‘(i) to foreclose the possibility of fu4 ture payment of some or all workers’ com5 pensation benefits involved; and 

6 ‘‘(ii)(I) to compensate the claimant 

7 for a work-related injury or illness as pro8 vided for by a workers’ compensation law 

9 or plan; or 

10 ‘‘(II) to eliminate cause for litigation 

11 involving 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.—Such section is further amended by add17 ing at the end the following new subsection: 

18 ‘‘(q) TREATMENT OF QUALIFIED MEDICARE SET19 ASIDES UNDER WORKERS’ COMPENSATION SETTLEMENT

20 AGREEMENTS.— 

21 ‘‘(1) SATISFACTION OF SECONDARY PAYER RE22 QUIREMENTS THROUGH USE OF QUALIFIED MEDI23 CARE SET-ASIDES.— 

24 ‘‘(A) FULL SATISFACTION OF CLAIM OBLI25 GATIONS.— 


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1 ‘‘(i) IN GENERAL.—If a workers’ com2 pensation settlement agreement, related to 

3 a claim of a workers’ compensation claim4 ant, includes a qualified Medicare set-aside 

5 (as defined in paragraph (2)), such set6 aside shall satisfy any obligation with re7 spect to the present or future payment re8 imbursement under subsection (b)(2) with 

9 respect to such claim. The Secretary shall 

10 have no further recourse, directly or indi11 rectly, under this title with respect to such 

12 agreement. 

13 ‘‘(ii) RULE OF CONSTRUCTION.— 

14 Nothing in this section shall be construed 

15 as requiring the submission of a Medicare 

16 set-aside to the Secretary. 

17 ‘‘(B) MEDICARE SET-ASIDE AND MEDI18 CARE SET-ASIDE AMOUNT DEFINED.—For pur19 poses of this subsection: 

20 ‘‘(i) MEDICARE SET-ASIDE.—The 

21 term ‘Medicare set-aside’ means, with re22 spect to a workers’ compensation settle23 ment agreement, a provision in the agree24 ment that provides for a payment of a 

25 lump sum, annuity, a combination of a 


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1 lump sum and an annuity, or other 

2 amount that is in full satisfaction of the 

3 obligation described in subparagraph (A) 

4 for items and services that the workers’ 

5 compensation claimant under the agree6 ment received or is likely to receive under 

7 the applicable workers’ compensation law 

8 and for which payment would be made 

9 under this title, but for subsection 

10 (b)(2)(A). 

11 ‘‘(ii) MEDICARE SET-ASIDE

12 AMOUNT.—The term ‘Medicare set-aside 

13 amount’ means, with respect to a Medicare 

14 set-aside, the amount described in clause 

15 (i). 

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

17 ‘‘(A) REQUIREMENTS OF QUALIFIED MEDI18 CARE SET-ASIDE.—For purposes of this sub19 section, the term ‘qualified Medicare set-aside’ 

20 is a Medicare set-aside in which the Medicare 

21 set-aside amount reasonably takes into account 

22 the full payment obligation described in para23 graph (1)(A), while meeting the requirements of 

24 subparagraphs (B) and (C) and giving due con25 sideration to the following: 


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

2 the workers’ compensation claim involved. 

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

4 the claimant involved. 

5 ‘‘(iii) The reasonableness of and ne6 cessity for future medical expenses for 

7 treatment of the illness or injury involved. 

8 ‘‘(iv) The duration of and limitation 

9 on benefits payable under the workers’ 

10 compensation law or plan involved. 

11 ‘‘(v) The regulations and case law rel12 evant to the State workers’ compensation 

13 law or plan involved. 

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

15 qualified Medicare set-aside— 

16 ‘‘(i) shall include payment for items 

17 and services that are authorized for pay18 ment under this title as of the effective 

19 date of the workers’ compensation settle20 ment agreement involved and that are cov21 ered by the workers’ compensation law or 

22 plan involved; and 

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

24 payment for items and services that are 

25 not described in clause (i). 


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1 ‘‘(C) PAYMENT REQUIREMENTS.— 

2 ‘‘(i) REQUIRED USE OF WORKERS’ 

3 COMPENSATION FEE SCHEDULE.— 

4 ‘‘(I) IN GENERAL.—Except in the 

5 case of an optional direct payment of 

6 a Medicare set-aside made under 

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

8 amount shall be based upon the pay9 ment amount for items and services 

10 under the workers’ compensation fee 

11 schedule (effective as of the date of 

12 the agreement) applicable to the work13 ers’ compensation law or plan in14 volved. 

15 ‘‘(II) WORKERS’ COMPENSATION

16 FEE SCHEDULE DEFINED.—For pur17 poses of this subsection, the term 

18 ‘workers’ compensation fee schedule’ 

19 means, with respect to a workers’ 

20 compensation law or plan of a State 

21 or a similar plan applicable in a State, 

22 the schedule of payment amounts the 

23 State has established to pay providers 

24 for items and services furnished to 

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1 jury or illness as defined under such 

2 law or plan (or in the absence of such 

3 a schedule, the applicable medical re4 imbursement rate under such law or 

5 plan). 

6 ‘‘(ii) OPTIONAL PROPORTIONAL AD7 JUSTMENT FOR COMPROMISE SETTLEMENT

8 AGREEMENTS.— 

9 ‘‘(I) IN GENERAL.—In the case 

10 of a compromise settlement agree11 ment, a workers’ compensation claim12 ant or workers’ compensation payer 

13 who is party to the agreement may 

14 elect (but is not required) to calculate 

15 the Medicare set-aside amount of the 

16 agreement by applying a percentage 

17 reduction to the Medicare set-aside 

18 amount for the total settlement 

19 amount that could have been payable 

20 under the applicable workers’ com21 pensation law or similar plan involved 

22 had the denied or contested portion of 

23 the claim not been subject to a com24 promise agreement. The percentage 

25 reduction shall be equal to the denied 


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1 or contested percentage of such total 

2 settlement. Such election may be 

3 made by a party to the agreement 

4 only with the written consent of the 

5 other party to the agreement. 

6 ‘‘(II) APPLICATION.—If the 

7 workers’ compensation claimant or 

8 workers’ compensation payer elects to 

9 calculate the Medicare set-aside 

10 amount under this clause, the Medi11 care set-aside shall be deemed a quali12 fied Medicare set-aside. 

13 ‘‘(D) CERTAIN MEDICARE SET-ASIDES

14 WITH SAFE HARBOR AMOUNT DEEMED QUALI15 FIED MEDICARE SET-ASIDES.— 

16 ‘‘(i) IN GENERAL.—For purposes of 

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

18 Medicare set-aside of a workers’ compensa19 tion settlement agreement shall be deemed 

20 a qualified Medicare set-aside if the Medi21 care set-aside amount involved is the safe 

22 harbor amount for the agreement and the 

23 agreement does not exceed $250,000. 

24 ‘‘(ii) WRITTEN CONSENT.—A safe 

25 harbor amount, with respect to a workers’ 


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1 compensation agreement, shall be treated 

2 as the Medicare set-aside amount for such 

3 agreement for purposes of clause (i) only 

4 upon written consent of all parties to the 

5 agreement. 

6 ‘‘(iii) SAFE HARBOR AMOUNT DE7 FINED.—For purposes of this subsection, 

8 the term ‘safe harbor amount’ means, with 

9 respect to a workers’ compensation settle10 ment agreement, 15 percent of the total 

11 settlement amount of the agreement (as 

12 determined under subsection (p)(2)), ex13 cluding repayment of conditional payments 

14 and previously settled portions of the claim 

15 involved. In applying the previous sentence 

16 for purposes of determining the safe har17 bor amount, with respect to a workers’ 

18 compensation agreement, if the agreement 

19 includes an annuity, the cost (but not the 

20 payout of the annuity) shall be included in 

21 determining the total settlement amount of 

22 the agreement. 

23 ‘‘(iv) MANDATORY DIRECT PAYMENT

24 OF SAFE HARBOR AMOUNT.—A Medicare 

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1 ment agreement may not be treated as a 

2 qualified set-aside under clause (i) unless 

3 an election is made under paragraph 

4 (5)(A) to transfer to the Secretary a direct 

5 payment of such set-aside. 

6 ‘‘(E) SECRETARIAL AUTHORITY WITH RE7 SPECT TO DEEMED QUALIFIED MEDICARE SET8 ASIDES.— 

9 ‘‘(i) DETERMINATION.—If the Sec10 retary determines, based on the data de11 scribed in clause (ii), that the provisions of 

12 subparagraph (D) have caused a signifi13 cant negative financial impact (as specified 

14 by the Chief Actuary of the Centers for 

15 Medicare & Medicaid Services) on the Fed16 eral Hospital Insurance Trust Fund under 

17 section 1817 or the Federal Supplementary 

18 Medical Insurance Trust Fund under sec19 tion 1841, then the Secretary shall adopt 

20 rules to reduce such impact by modifying 

21 the amount of the percent described in 

22 subparagraph (D)(iii). 

23 ‘‘(ii) REQUIRED DATA.—The deter24 mination under clause (i) shall be based on 

25 data on— 


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1 ‘‘(I) the projected effect of the 

2 provisions described in such para3 graph on the Federal Hospital Insur4 ance Trust Fund under section 1817 

5 or the Federal Supplementary Medical 

6 Insurance Trust Fund under section 

7 1841 during the three-year period be8 ginning on the date of the enactment 

9 of this subsection; as compared to 

10 ‘‘(II) data on the effect on such 

11 trust funds of the provisions of sub12 section (b), as in effect during the 

13 three-year period prior to such date of 

14 enactment. 

15 ‘‘(3) PROCESS FOR APPROVAL OF QUALIFIED

16 MEDICARE SET-ASIDES.— 

17 ‘‘(A) OPTIONAL PRIOR APPROVAL BY SEC18 RETARY.—A party to a workers’ compensation 

19 settlement agreement that includes a Medicare 

20 set-aside may submit to the Secretary the set21 aside for approval of the set-aside as a qualified 

22 Medicare set-aside. The set-aside shall be sub23 mitted in accordance with a procedure specified 

24 by the Secretary. 


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1 ‘‘(B) NOTICE OF DETERMINATION OF AP2 PROVAL OR DISAPPROVAL.—Not later than 60 

3 days after the date on which the Secretary re4 ceives a submission under subparagraph (A), 

5 the Secretary shall notify in writing the parties 

6 to the workers’ compensation settlement agree7 ment of the determination of approval or dis8 approval. If the determination disapproves such 

9 submission the Secretary shall include with 

10 such notification the specific reasons for the 

11 disapproval. A determination that disapproves a 

12 submission is not valid if the determination 

13 does not include a specific explanation of each 

14 deficiency of the submission. 

15 ‘‘(4) APPEALS.— 

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

17 compensation settlement agreement that is dis18 satisfied with a determination under paragraph 

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

20 with the Secretary not later than 60 days after 

21 the date of notice of such determination, shall 

22 be entitled to— 

23 ‘‘(i) reconsideration of the determina24 tion by the Secretary (with respect to such 

25 determination); 


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1 ‘‘(ii) a hearing before an administra2 tive judge thereon; and 

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

4 final determination after such hearing. 

5 ‘‘(B) DEADLINES FOR DECISIONS.— 

6 ‘‘(i) RECONSIDERATIONS.— 

7 ‘‘(I) IN GENERAL.—The Sec8 retary shall conduct and conclude a 

9 reconsideration of a determination 

10 under subparagraph (A)(i) and mail 

11 the notice of the decision of such re12 consideration to the party involved by 

13 not later than the last day of the 30- 

14 day period beginning on the date that 

15 a request for such reconsideration has 

16 been timely filed. 

17 ‘‘(II) APPEALS OF RECONSIDER18 ATIONS.—If a party to the workers’ 

19 compensation settlement involved is 

20 dissatisfied with the Secretary’s deci21 sion under subclause (I) that party 

22 may file an appeal within the 30-day 

23 period after the date of receipt of the 

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1 clause and request a hearing before 

2 an administrative law judge. 

3 ‘‘(III) FAILURE BY SECRETARY

4 TO PROVIDE NOTICE.—In the case of 

5 a failure by the Secretary to mail the 

6 notice of the decision under subclause 

7 (I) by the last day of the period de8 scribed in such subclause, the Sec9 retary shall be deemed to have ap10 proved the submission as submitted 

11 under paragraph (3)(A). 

12 ‘‘(ii) HEARINGS.— 

13 ‘‘(I) IN GENERAL.—An adminis14 trative law judge shall conduct and 

15 conclude a hearing on a decision of 

16 the Secretary under clause (i) and 

17 render a decision on such hearing by 

18 not later than the last day of the 90- 

19 day period beginning on the date that 

20 a request for such hearing has been 

21 timely filed. 

22 ‘‘(II) JUDICIAL REVIEW.—A deci23 sion under subclause (I) by an admin24 istrative law judge constitutes a final 


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1 agency action and is subject to judi2 cial review. 

3 ‘‘(III) FAILURE BY ADMINISTRA4 TIVE LAW JUDGE TO RENDER TIMELY

5 DECISION.—In the case of a failure by 

6 an administrative law judge to render 

7 a decision under subclause (I) by the 

8 last day of the period described in 

9 such subclause, the party requesting 

10 the hearing may seek judicial review 

11 of the decision under clause (i), not12 withstanding any requirements for a 

13 hearing for purposes of the party’s 

14 right to such judicial review. 

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

16 PROVISIONS; PROTECTION FROM CERTAIN LIABIL17 ITY.— 

18 ‘‘(A) OPTIONAL DIRECT PAYMENT OF

19 MEDICARE SET-ASIDE AMOUNT.— 

20 ‘‘(i) ELECTION FOR DIRECT PAYMENT

21 OF MEDICARE SET-ASIDE.—With respect to 

22 a claim for which a workers’ compensation 

23 settlement agreement is established, a 

24 workers’ compensation claimant or work25 ers’ compensation payer who is party to 


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1 the agreement may elect, but is not re2 quired, to transfer to the Secretary a di3 rect payment of the qualified Medicare set4 aside. With respect to a qualified Medicare 

5 set-aside paid directly to the Secretary, the 

6 parties involved may calculate the Medi7 care set-aside amount of such set-aside 

8 using any of the following methods: 

9 ‘‘(I) In the case of any Medicare 

10 set-aside of a compromise settlement 

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

12 the amount calculated in accordance 

13 with such paragraph. 

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

15 set-aside, the amount based upon the 

16 payment amount for items and serv17 ices under the workers’ compensation 

18 fee schedule (effective as of the date 

19 of the agreement) applicable to the 

20 workers’ compensation law or plan in21 volved, in accordance with paragraph 

22 (2)(C)(i)(I). 

23 ‘‘(III) In the case of any Medi24 care set-aside, the payment amount 

25 applicable to the items and services 


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1 under this title as in effect on the ef2 fective date of the agreement. 

3 Such transfer shall be in accordance with 

4 a procedure established by the Secretary 

5 and shall be made only upon written con6 sent of the other party to the agreement. 

7 ‘‘(ii) ELECTION SATISFYING LIABIL8 ITY.—An election made under clause (i), 

9 with respect to a qualified Medicare set10 aside shall satisfy any payment, in relation 

11 to the underlying claim of the related 

12 workers’ compensation settlement agree13 ment, required under subsection (b)(2) to 

14 be made by the claimant or payer to the 

15 Secretary. The Secretary shall have no fur16 ther recourse, directly or indirectly, under 

17 this title with respect to such agreement. 

18 ‘‘(B) REQUIREMENT FOR TIMELY NOTICE

19 OF MEDICARE REPAYMENTS OWED BY WORK20 ERS’ COMPENSATION CLAIMANT OR PAYER TO

21 SECRETARY.— 

22 ‘‘(i) IN GENERAL.—Not later than 90 

23 days after the date on which the Secretary 

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1 tion payer for documentation of any condi2 tional payment made under subsection 

3 (b)(2)(B)(i) on behalf of the claimant, the 

4 Secretary shall provide to the claimant or 

5 payer such documentation. Such docu6 mentation shall be sufficient for the claim7 ant or payer to make a reasonable deter8 mination whether such a payment was for 

9 an item or service furnished in connection 

10 with the claimant’s work related injury or 

11 illness involved. The claimant or payer may 

12 rely on the documentation provided under 

13 this clause in making such determination. 

14 Payment of the amount of the conditional 

15 payment, after deducting from such 

16 amount any procurement costs involved 

17 and any costs for unrelated and inappro18 priate items or services, shall discharge 

19 further liability with respect to the condi20 tional payment. 

21 ‘‘(ii) LIABILITY FOR REIMBURSE22 MENTS RELATED TO REQUESTED INFOR23 MATION.—If the Secretary fails to provide 

24 information in accordance with clause (i), 

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1 scribed in such clause shall be liable for 

2 any reimbursement under subsection 

3 (b)(2)(B) with respect to the conditional 

4 payment for which information was re5 quested under such clause. 

6 ‘‘(C) PROTECTION FROM CERTAIN LIABIL7 ITY.— 

8 ‘‘(i) LIABILITY FOR MEDICARE SET9 ASIDE PAYMENT GREATER THAN PAYMENT

10 UNDER WORKERS’ COMPENSATION LAW.— 

11 No workers’ compensation claimant, work12 ers’ compensation payer, employer, admin13 istrator of the Medicare set-aside, legal 

14 representative of the claimant, payer, em15 ployer, or administrator, or any other 

16 party related to the claimant, payer, em17 ployer, or administrator shall be liable for 

18 any payment amount established under a 

19 Medicare set-aside for an item or service 

20 provided to the claimant that is greater 

21 than the payment amount for the item or 

22 service established under the workers’ com23 pensation fee schedule (or in the absence 

24 of such schedule, the medical reimburse25 ment rate) under the compensation law or 


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1 plan of the jurisdiction where the agree2 ment will be effective. 

3 ‘‘(ii) LIABILITY FOR PROVIDER

4 CHARGES GREATER THAN PAYMENT

5 UNDER WORKERS’ COMPENSATION AGREE6 MENT.—With respect to a workers’ com7 pensation settlement agreement, a provider 

8 may not bill (or collect any amount from) 

9 the workers’ compensation claimant, work10 ers’ compensation payer, employer, admin11 istrator of the Medicare set-aside, legal 

12 representative of the claimant, payer, em13 ployer, or administrator, or any other 

14 party related to the claimant, payer, em15 ployer, or administrator an amount for 

16 items and services provided to the claimant 

17 that is greater than the payment rate for 

18 such items and services established under 

19 the Medicare set-aside of the agreement. 

20 No person is liable for payment of any 

21 amounts billed for an item or service in 

22 violation of the previous sentence. If a pro23 vider willfully bills (or collects an amount) 

24 for such an item or service in violation of 

25 such sentence, the Secretary may apply 


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1 sanctions against the provider in accord2 ance with section 1842(j)(2) in the same 

3 manner as such section applies with re4 spect to a physician. Paragraph (4) of sec5 tion 1842(j) shall apply under this clause 

6 in the same manner as such paragraph ap7 plies under such section. 

8 ‘‘(6) TREATMENT OF STATE WORKERS’ COM9 PENSATION LAW.—For purposes of this subsection 

10 and subsection (p), if a workers’ compensation set11 tlement agreement is accepted, reviewed, approved, 

12 or otherwise finalized in accordance with the work13 ers’ compensation law of the jurisdiction in which 

14 such agreement will be effective, such acceptance, re15 view, approval, or other finalization shall be deemed 

16 conclusive as to any and all matters within the juris17 diction of the workers’ compensation law, including 

18 the determination of reasonableness of the settle19 ment value; any allocations of settlement funds; the 

20 projection of future indemnity or medical benefits 

21 that may be payable under the State workers’ com22 pensation law; and, in the case of a compromise 

23 agreement, the total amount that could have been 

24 payable for a claim which is the subject of such 

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


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1 A determination made by applicable authority for a 

2 jurisdiction that a workers’ compensation settlement 

3 agreement is in accordance with the workers’ com4 pensation law of the jurisdiction shall not be subject 

5 to review by the Secretary.’’. 

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

7 such section is further amended— 

8 (1) in paragraph (2)(B)(ii), by striking ‘‘A pri9 mary plan’’ and inserting ‘‘Subject to subsections 

10 (p) and (q), a primary plan’’; 

11 (2) in paragraph (2)(B)(iii)— 

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

13 order to recover payment’’ and inserting ‘‘Sub14 ject to subsection (q), in order to recover pay15 ment’’; and 

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

17 addition’’ and inserting ‘‘Subject to subsection 

18 (q), in addition’’; and 

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

20 established a private cause of action’’ and inserting 

21 ‘‘Subject to subsection (q), there is established a pri22 vate cause of action’’. 

23 (d) MODERNIZING TERMINOLOGY FOR PURPOSES OF

24 MEDICARE SECONDARY PAYER PROVISIONS.—Subsection 

25 (b)(2)(A) of such section is amended by striking ‘‘workVerDate Mar 15 2010 02:31 May 04, 2012 Jkt 019200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 E:\BILLS\H5284.IH H5284

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1 men’s compensation law or plan’’ and inserting ‘‘workers’ 

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

3 SEC. 3. LIMITATION ON LIABILITY. 

4 The parties to a workers’ compensation settlement 

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

6 the Social Security Act (42 U.S.C. 1395y (b)) on the effec7 tive date of settlement shall be accepted as meeting the 

8 requirements of such section notwithstanding changes in 

9 law, regulations, or administrative interpretation of such 

10 provisions after the effective date of such settlement. 

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

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

13 and Human Services to impose liability that is additional 

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

15 this Act with respect to a workers’ compensation settle16 ment agreement the effective date of which is before such 

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

18 SEC. 4. EFFECTIVE DATE. 

19 The amendments made by this Act shall apply to a 

20 workers’ compensation settlement agreement with an ef21 fective date on or after the date of the enactment of this 

22 Act. 

Æ 


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