I 

111TH CONGRESS 

1ST SESSION H. R. 2641 

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 21, 2009 

Mr. TANNER (for himself, Mr. CHILDERS, Mr. BRADY of Pennsylvania, and 

Mr. MATHESON) 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 2009’’. 


smartinez on PROD1PC64 with BILLS
2 

•HR 2641 IH

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) EXCEPTION FROM 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 (n),’’ after ‘‘(ii)’’; and 

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

14 ‘‘(n) EXCEPTION FROM 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, for purposes of sub19 section (b), as a primary plan with respect to an ex20 empt workers’ compensation settlement agreement. 

21 ‘‘(2) EXEMPT WORKERS’ COMPENSATION SET22 TLEMENT AGREEMENT DEFINED.—For purposes of 

23 this subsection, an ‘exempt workers’ compensation 

24 settlement agreement’ means a workers’ compensa25 tion agreement that is described in any of the fol26 lowing subparagraphs: 


smartinez on PROD1PC64 with BILLS
3 

•HR 2641 IH

1 ‘‘(A) PRESENT VALUE OF $25,000 OR

2 LESS.—A workers’ compensation settlement 

3 agreement that has a present value, as deter4 mined under paragraph (3), that is, subject to 

5 the last sentence of this paragraph, $25,000 or 

6 less. 

7 ‘‘(B) LIKELY INELIGIBILITY OF WORKERS’ 

8 COMPENSATION CLAIMANT FOR MEDICARE BEN9 EFITS.—A workers’ compensation settlement 

10 agreement the claimant of which is not eligible 

11 for benefits under this title as of the effective 

12 date of the agreement and, under paragraph 

13 (4), is unlikely to become so eligible within 30 

14 months after such effective date. 

15 ‘‘(C) NO FUTURE MEDICAL EXPENSES.—A 

16 workers’ compensation settlement agreement 

17 the claimant of which is not eligible for pay18 ment of medical expenses incurred after the ef19 fective date of such agreement that are avail20 able under the workers’ compensation law or 

21 plan of the jurisdiction in which such agree22 ment will be effective. 

23 ‘‘(D) NO LIMITATION ON FUTURE MEDICAL

24 EXPENSES.—A workers’ compensation settle25 ment agreement that does not limit or extinVerDate Nov 24 2008 00:08 May 27, 2009 Jkt 079200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2641.IH H2641

smartinez on PROD1PC64 with BILLS
4 

•HR 2641 IH

1 guish the right of the claimant involved to pay2 ment of medical expenses incurred after the ef3 fective date of such agreement that are avail4 able under the workers’ compensation law or 

5 plan of the jurisdiction in which such agree6 ment will be effective. 

7 The Secretary may adopt rules for an increase in the 

8 dollar amount specified under subparagraph (A). 

9 ‘‘(3) DETERMINATION OF PRESENT VALUE OF

10 WORKERS’ COMPENSATION SETTLEMENT AGREE11 MENT.— 

12 ‘‘(A) IN GENERAL.—Subject to subpara13 graph (B), for purposes of paragraph (2)(A) 

14 and subsection (o) and with respect to a work15 related injury or illness that is the subject of a 

16 workers’ compensation settlement agreement, 

17 the present value of the agreement is the sum 

18 of any of the following amounts that are used 

19 to fund the agreement: 

20 ‘‘(i) The amount of any cash payment. 

21 ‘‘(ii) The amount of the purchase cost 

22 of an annuity (and not the payout or the 

23 projected payout paid during the term of 

24 such annuity). 


smartinez on PROD1PC64 with BILLS
5 

•HR 2641 IH

1 ‘‘(iii) The amount of the sum of any 

2 funds under clause (i) or (ii), previously 

3 paid pursuant to a workers’ compensation 

4 settlement agreement for the same work5 ers’ compensation claim. 

6 ‘‘(B) COSTS EXCLUDED FROM PRESENT

7 VALUE.—The present value of a workers’ com8 pensation settlement agreement does not in9 clude the following payments made because of 

10 the workers’ compensation claim involved: 

11 ‘‘(i) Payments to satisfy previous un12 paid medical expenses. 

13 ‘‘(ii) Payments to satisfy third party 

14 claims or liens for amounts previously 

15 paid, such as payments under this title, 

16 payments under the Medicaid program 

17 under title XIX, payments under a pro18 gram of the Department of Veterans Af19 fairs under title 38, United States Code, 

20 payments under an employee welfare ben21 efit plan (as defined in section 3(1) of the 

22 Employee Retirement and Income Security 

23 Act of 1974), and other similar third party 

24 payments. 


smartinez on PROD1PC64 with BILLS
6 

•HR 2641 IH

1 ‘‘(iii) The attorney fees for the claim2 ant involved. 

3 ‘‘(iv) Any other procurement costs in4 curred by a party to the agreement to se5 cure the agreement. 

6 ‘‘(4) DETERMINATION OF LIKELY INELIGI7 BILITY OF CLAIMANT FOR MEDICARE BENEFITS.— 

8 For purposes of paragraph (2)(B), a workers’ com9 pensation claimant shall be deemed unlikely to be10 come eligible for benefits under this title within 30 

11 months after the effective date of othe agreement 

12 unless, as of the effective date of the agreement, 

13 such claimant is insured for disability insurance ben14 efits as determined under subsection (c)(1) of sec15 tion 223 and meets any of the following require16 ments: 

17 ‘‘(A) AWARDED DISABILITY BENEFITS.— 

18 The claimant has been awarded disability insur19 ance benefits. 

20 ‘‘(B) APPLIED FOR DISABILITY.—The 

21 claimant has applied for disability insurance 

22 benefits and the claimant’s application has been 

23 pending without decision for 90 days or less 

24 after the date of filing the application. 


smartinez on PROD1PC64 with BILLS
7 

•HR 2641 IH

1 ‘‘(C) APPEALING DENIAL OF DISABILITY

2 BENEFITS.—The claimant has been denied dis3 ability insurance benefits and is appealing (or 

4 intending to appeal) a denial of such benefits 

5 under subsection (a) of such section. 

6 ‘‘(D) MINIMUM AGE.—The claimant is at 

7 least 62 years and 6 months of age. 

8 ‘‘(E) END STAGE RENAL DISEASE.—The 

9 claimant is medically determined to have end 

10 stage renal disease, but does not as of such 

11 date qualify for benefits under this title by rea12 son of such disease. 

13 ‘‘(5) DEFINITIONS.—For purposes of this sub14 section and subsection (o): 

15 ‘‘(A) WORKERS’ COMPENSATION SETTLE16 MENT AGREEMENT.—The term ‘workers’ com17 pensation settlement agreement’ means an 

18 agreement, including a commutation agreement 

19 or compromise agreement, or any combination 

20 of both, between a workers’ compensation 

21 claimant and one or more workers’ compensa22 tion payers which is intended— 

23 ‘‘(i) to foreclose the possibility of fu24 ture payment of some or all workers’ com25 pensation benefits involved; and 


smartinez on PROD1PC64 with BILLS
8 

•HR 2641 IH

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

2 for a work-related injury or illness as pro3 vided for by a workers’ compensation law 

4 or plan; or 

5 ‘‘(II) to eliminate cause for litigation 

6 involving issues in dispute between the 

7 claimant and payer. 

8 ‘‘(B) WORKERS’ COMPENSATION PAYER.— 

9 The term ‘workers’ compensation payer’ means, 

10 with respect to a workers’ compensation law or 

11 plan, a workers’ compensation insurer, self-in12 surer, employer, individual, or any other entity 

13 that is or may be liable for the payment of ben14 efits to a workers’ compensation claimant pur15 suant to the workers’ compensation law or plan. 

16 ‘‘(C) WORKERS’ COMPENSATION CLAIM17 ANT.—The term ‘workers’ compensation claim18 ant’ means a worker who— 

19 ‘‘(i) is or may be covered under a 

20 workers’ compensation law or plan (or 

21 similar compensation plan); and 

22 ‘‘(ii) submits a claim or accepts bene23 fits under such law or plan (or similar 

24 compensation plan) for a work-related in25 jury or illness. 


smartinez on PROD1PC64 with BILLS
9 

•HR 2641 IH

1 ‘‘(D) WORKERS’ COMPENSATION LAW OR

2 PLAN.— 

3 ‘‘(i) IN GENERAL.—The term ‘work4 ers’ compensation law or plan’ means a 

5 law or program administered by a State or 

6 the United States to provide compensation 

7 to workers for a work-related injury or ill8 ness (or for disability or death caused by 

9 such an injury or illness), including the 

10 Longshore and Harbor Workers’ Com11 pensation Act (33 U.S.C. 901–944, 948– 

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

13 Code (known as the Federal Employees 

14 Compensation Act), the Black Lung Bene15 fits Act (30 U.S.C. 931 et seq.), and part 

16 C of title 4 of the Federal Coal Mine and 

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

18 including the Act of April 22, 1908 (45 

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

20 the Federal Employer’s Liability Act). 

21 ‘‘(ii) INCLUSION OF SIMILAR COM22 PENSATION PLAN.—Such term includes a 

23 similar compensation plan established by 

24 an employer that is funded by such em25 ployer or the insurance carrier of such emVerDate Nov 24 2008 00:08 May 27, 2009 Jkt 079200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2641.IH H2641

smartinez on PROD1PC64 with BILLS
10 

•HR 2641 IH

1 ployer to provide compensation to a worker 

2 of such employer for a work-related injury 

3 or illness. 

4 ‘‘(E) COMPROMISE AGREEMENT.—The 

5 term ‘compromise agreement’ means a workers’ 

6 compensation settlement agreement that— 

7 ‘‘(i) applies to a workers’ compensa8 tion claim that is denied or contested, in 

9 whole or in part, by a workers’ compensa10 tion payer involved under the workers’ 

11 compensation law or plan (or similar com12 pensation plan) applicable to the jurisdic13 tion in which the agreement has been set14 tled; and 

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

16 of the full amount of benefits sought or 

17 payable under the workers’ compensation 

18 claim. 

19 ‘‘(F) COMMUTATION AGREEMENT.—The 

20 term ‘commutation agreement’ means a work21 ers’ compensation settlement agreement to set22 tle all or a portion of a workers’ compensation 

23 claim, in which— 

24 ‘‘(i) liability for past and future bene25 fits is not disputed; and 


smartinez on PROD1PC64 with BILLS
11 

•HR 2641 IH

1 ‘‘(ii) the parties to the agreement 

2 agree to include payment for future work3 ers’ compensation benefits payable after 

4 the date on which the agreement becomes 

5 effective.’’. 

6 (b) SATISFACTION OF SECONDARY PAYER REQUIRE7 MENTS THROUGH USE OF QUALIFIED MEDICARE SET8 ASIDES UNDER WORKERS’ COMPENSATION SETTLEMENT

9 AGREEMENTS.—Section 1862 of the Social Security Act 

10 (42 U.S.C. 1395y), as amended by subsection (a), is fur11 ther amended by adding at the end the following new sub12 section: 

13 ‘‘(o) TREATMENT OF QUALIFIED MEDICARE SET14 ASIDES UNDER WORKERS’ COMPENSATION SETTLEMENT

15 AGREEMENTS.— 

16 ‘‘(1) SATISFACTION OF SECONDARY PAYER RE17 QUIREMENTS THROUGH USE OF QUALIFIED MEDI18 CARE SET-ASIDES.— 

19 ‘‘(A) FULL SATISFACTION OF CLAIM OBLI20 GATIONS.— 

21 ‘‘(i) IN GENERAL.—If a workers’ com22 pensation settlement agreement, related to 

23 a claim of a workers’ compensation claim24 ant, includes a qualified Medicare set25 aside, such set-aside shall satisfy any obliVerDate Nov 24 2008 00:08 May 27, 2009 Jkt 079200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2641.IH H2641

smartinez on PROD1PC64 with BILLS
12 

•HR 2641 IH

1 gation with respect to the present or future 

2 payment reimbursement under subsection 

3 (b)(2), with respect to such claim. The 

4 Secretary shall have no further recourse, 

5 directly or indirectly, under this title. 

6 ‘‘(ii) RULE OF CONSTRUCTION.— 

7 Nothing in this section shall be construed 

8 as requiring the submission of a Medicare 

9 set-aside to the Secretary. 

10 ‘‘(B) MEDICARE SET-ASIDE AND MEDI11 CARE SET-ASIDE AMOUNT DEFINED.—For pur12 poses of this subsection: 

13 ‘‘(i) MEDICARE SET-ASIDE.—The 

14 term ‘Medicare set-aside’ means, with re15 spect to a workers’ compensation settle16 ment agreement, a provision in the agree17 ment that provides for a payment of a 

18 lump sum, annuity, a combination of a 

19 lump sum and an annuity, or other 

20 amount that is in full satisfaction of the 

21 obligation described in subparagraph (A) 

22 for items and services that the workers’ 

23 compensation claimant under the agree24 ment received or is likely to receive under 

25 the applicable workers’ compensation law 


smartinez on PROD1PC64 with BILLS
13 

•HR 2641 IH

1 and for which payment would be made 

2 under this title, but for subsection 

3 (b)(2)(A). 

4 ‘‘(ii) MEDICARE SET-ASIDE

5 AMOUNT.—The term ‘Medicare set-aside 

6 amount’ means, with respect to a Medicare 

7 set-aside, the amount described in clause 

8 (i). 

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

10 ‘‘(A) REQUIREMENTS OF QUALIFIED MEDI11 CARE SET-ASIDE.—For purposes of this sub12 section, the term ‘qualified Medicare set-aside’ 

13 is a Medicare set-aside in which the Medicare 

14 set-aside amount reasonably takes into account 

15 the full payment obligation described in para16 graph (1)(A), consistent with subparagraphs 

17 (B) and (C) and giving due consideration to the 

18 following: 

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

20 the workers’ compensation claim involved. 

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

22 the claimant involved. 

23 ‘‘(iii) The reasonableness of and ne24 cessity for future medical expenses for 

25 treatment of the illness or injury involved. 


smartinez on PROD1PC64 with BILLS
14 

•HR 2641 IH

1 ‘‘(iv) The duration of and limitation 

2 on benefits payable under the workers’ 

3 compensation law or plan involved. 

4 ‘‘(B) ITEMS AND SERVICES INCLUDED.— 

5 The Medicare set-aside— 

6 ‘‘(i) shall include payment for items 

7 and services that are authorized for pay8 ment under this title as of the effective 

9 date of the workers’ compensation settle10 ment agreement involved and that are cov11 ered by the workers’ compensation law or 

12 plan involved; and 

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

14 payment for items and services that are 

15 not described in clause (i). 

16 ‘‘(C) PAYMENT REQUIREMENTS.— 

17 ‘‘(i) REQUIRED USE OF WORKERS’ 

18 COMPENSATION FEE SCHEDULE.— 

19 ‘‘(I) IN GENERAL.—Except in the 

20 cases of a Medicare set-aside deemed 

21 a qualified Medicare set-aside under 

22 paragraph (4)(A) or an optional direct 

23 payment of a Medicare set-aside made 

24 under paragraph (6)(A), the set-aside 

25 amount shall be based upon the payVerDate Nov 24 2008 00:08 May 27, 2009 Jkt 079200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\H2641.IH H2641

smartinez on PROD1PC64 with BILLS
15 

•HR 2641 IH

1 ment amount for items and services 

2 under the workers’ compensation fee 

3 schedule (effective as of the date of 

4 the agreement) applicable to the work5 ers’ compensation law or plan in6 volved. 

7 ‘‘(II) WORKERS’ COMPENSATION

8 FEE SCHEDULE DEFINED.—For pur9 poses of this subsection, the term 

10 ‘workers’ compensation fee schedule’ 

11 means, with respect to a workers’ 

12 compensation law or plan of a State 

13 or a similar plan applicable in a State, 

14 the schedule of payment amounts the 

15 State has established to pay providers 

16 for items and services furnished to 

17 workers who incur a work-related in18 jury or illness as defined under such 

19 law or plan (or in the absence of such 

20 a schedule, the applicable medical re21 imbursement rate under such law or 

22 plan). 

23 ‘‘(ii) REQUIRED PAYMENT ADJUST24 MENT FOR CERTAIN FEES.—The Medicare 


smartinez on PROD1PC64 with BILLS
16 

•HR 2641 IH

1 set-aside amount otherwise computed shall 

2 be reduced by— 

3 ‘‘(I) the amount of the direct 

4 costs and expenses incurred in estab5 lishing, administering, or securing ap6 proval for the Medicare set-aside; and 

7 ‘‘(II) the proportional share of 

8 other costs and expenses (including 

9 fees for attorneys, third-party ven10 dors, and administrators) incurred by 

11 the claimant or payer in entering into 

12 the workers’ compensation settlement 

13 agreement involved. 

14 ‘‘(iii) OPTIONAL PROPORTIONAL AD15 JUSTMENT FOR COMPROMISE SETTLEMENT

16 AGREEMENTS.— 

17 ‘‘(I) IN GENERAL.—In the case 

18 of a compromise settlement agree19 ment, a workers’ compensation claim20 ant or workers’ compensation payer 

21 who is party to the agreement may 

22 elect (but is not required) to calculate 

23 the Medicare set-aside amount of the 

24 agreement by applying a percentage 

25 reduction to the Medicare set-aside 


smartinez on PROD1PC64 with BILLS
17 

•HR 2641 IH

1 amount for the total settlement 

2 amount that could have been payable 

3 under the applicable workers’ com4 pensation law or similar plan involved 

5 had the denied or contested portion of 

6 the claim not been subject to a com7 promise agreement. The percentage 

8 reduction shall be equal to the denied 

9 or contested percentage of such total 

10 settlement. Such election may be 

11 made by a party to the agreement 

12 only with the written consent of the 

13 other party to the agreement. 

14 ‘‘(II) APPLICATION.—If the 

15 workers’ compensation claimant or 

16 workers’ compensation payer elects to 

17 calculate the Medicare set-aside 

18 amount under this clause, the Medi19 care set-aside shall be deemed a quali20 fied Medicare set-aside. 

21 ‘‘(3) PROCESS FOR APPROVAL OF QUALIFIED

22 MEDICARE SET-ASIDES.— 

23 ‘‘(A) OPTIONAL PRIOR APPROVAL BY SEC24 RETARY.—A party to a workers’ compensation 

25 settlement agreement that includes a Medicare 


smartinez on PROD1PC64 with BILLS
18 

•HR 2641 IH

1 set-aside may submit to the Secretary the set2 aside, including appropriate supporting docu3 mentation specified by the Secretary, for ap4 proval of the set-aside as a qualified Medicare 

5 set-aside. The set-aside shall be submitted in 

6 accordance with a procedure specified by the 

7 Secretary. 

8 ‘‘(B) AUTOMATIC APPROVAL UNLESS DIS9 APPROVED.—A Medicare set-aside submitted 

10 under subparagraph (A) shall be deemed a 

11 qualified Medicare set-aside unless the Sec12 retary determines and provides notice under 

13 subparagraph (C) that the Medicare set-aside 

14 does not satisfy the requirements of paragraph 

15 (2)(A) because the amount of the proposed 

16 Medicare set-aside is based on a substantial 

17 material error and is not supported by the doc18 umentation submitted under subparagraph (A). 

19 ‘‘(C) NOTICE OF DETERMINATION OF DIS20 APPROVAL.—Not later than 60 days after the 

21 date on which the Secretary receives a submis22 sion under subparagraph (A), the Secretary 

23 shall notify in writing the parties to the work24 ers’ compensation settlement agreement of the 

25 determination under subparagraph (B). If the 


smartinez on PROD1PC64 with BILLS
19 

•HR 2641 IH

1 determination disapproves such submission the 

2 Secretary shall include with such notification 

3 the specific reasons for the disapproval. A de4 termination that disapproves a submission is 

5 not valid if the determination does not include 

6 a specific explanation of each deficiency of the 

7 submission. 

8 ‘‘(4) SAFE HARBOR FOR CERTAIN MEDICARE

9 SET-ASIDES.— 

10 ‘‘(A) IN GENERAL.—A Medicare set-aside 

11 of a workers’ compensation settlement agree12 ment shall be deemed a qualified Medicare set13 aside if the Medicare set-aside amount is the 

14 safe harbor amount for the agreement and if 

15 the present value of the workers’ compensation 

16 settlement agreement (as determined under 

17 subsection (n)(3)) does not exceed, subject to 

18 subparagraph (D), $250,000. 

19 ‘‘(B) SAFE HARBOR AMOUNT DEFINED.— 

20 For purposes of this paragraph, the term ‘safe 

21 harbor amount’ means, for a workers’ com22 pensation settlement agreement, 10 percent of 

23 the present value of the agreement (as deter24 mined under subsection (n)(3)). 


smartinez on PROD1PC64 with BILLS
20 

•HR 2641 IH

1 ‘‘(C) RULE OF CONSTRUCTION.—In the 

2 case of a workers’ compensation settlement 

3 agreement with a Medicare set-aside that is 

4 deemed a qualified Medicare set-aside under 

5 subparagraph (A), the fact that the workers’ 

6 compensation claimant or workers’ compensa7 tion payer involved may elect direct payment 

8 under paragraph (6)(A) or an adjustment 

9 under paragraph (2)(C)(iii) shall not be con10 strued as prohibiting such claimant or payer 

11 from basing the set-aside amount on the safe 

12 harbor amount for such agreement. 

13 ‘‘(D) RULES.—The Secretary may adopt 

14 rules for an increase in the dollar amount speci15 fied under subparagraph (A). Such rules may 

16 provide that the increase in such dollar amount 

17 be the same percentage increase as the percent18 age increase in the dollar amount effected 

19 under the last sentence of subsection (n)(2). 

20 ‘‘(5) APPEALS.— 

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

22 compensation settlement agreement that is dis23 satisfied with a determination under paragraph 

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

25 with the Secretary not later than 60 days after 


smartinez on PROD1PC64 with BILLS
21 

•HR 2641 IH

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; and 

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

9 final determination after such hearing. 

10 ‘‘(B) DEADLINES FOR DECISIONS.— 

11 ‘‘(i) RECONSIDERATIONS.— 

12 ‘‘(I) IN GENERAL.—The Sec13 retary shall conduct and conclude a 

14 reconsideration of a determination 

15 under paragraph (3)(B) and mail the 

16 notice of the decision of such recon17 sideration by not later than the last 

18 day of the 30-day period beginning on 

19 the date that a request for such re20 consideration has been timely filed. 

21 ‘‘(II) APPEALS OF RECONSIDER22 ATIONS.—If a party to the workers’ 

23 compensation settlement involved is 

24 dissatisfied with the Secretary’s deci25 sion under subclause (I), that party 


smartinez on PROD1PC64 with BILLS
22 

•HR 2641 IH

1 may file an appeal within the 30-day 

2 period after the date of receipt of the 

3 notice of the decision under such sub4 clause and request a hearing before 

5 an administrative law judge. 

6 ‘‘(III) FAILURE BY SECRETARY

7 TO PROVIDE NOTICE.—In the case of 

8 a failure by the Secretary to mail the 

9 notice of the decision under subclause 

10 (I) by the last day of the period de11 scribed in such subclause, the party 

12 requesting the reconsideration may re13 quest a hearing before an administra14 tive law judge, notwithstanding any 

15 requirements for a reconsideration of 

16 a determination for purposes of the 

17 party’s right to such hearing. 

18 ‘‘(ii) HEARINGS.— 

19 ‘‘(I) IN GENERAL.—An adminis20 trative law judge shall conduct and 

21 conclude a hearing on a decision of 

22 the Secretary under clause (i) and 

23 render a decision on such hearing by 

24 not later than the last day of the 90- 

25 day period beginning on the date that 


smartinez on PROD1PC64 with BILLS
23 

•HR 2641 IH

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 ‘‘(6) ADMINISTRATION OF MEDICARE SET-ASIDE

21 PROVISIONS; PROTECTION FROM CERTAIN LIABIL22 ITY.— 

23 ‘‘(A) OPTIONAL DIRECT PAYMENT OF

24 MEDICARE SET-ASIDE AMOUNT.— 


smartinez on PROD1PC64 with BILLS
24 

•HR 2641 IH

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 workers’ compensation claimant or work6 ers’ compensation payer who is party to 

7 the agreement may elect, but is not re8 quired, to transfer to the Secretary a di9 rect payment of the qualified Medicare set10 aside or an annuity purchased to directly 

11 fund the set-aside amount. With respect to 

12 a qualified Medicare set-aside paid directly 

13 to the Secretary, the parties involved may 

14 calculate the Medicare set-aside amount of 

15 such set-aside using any of the following 

16 methods: 

17 ‘‘(I) In the case of any Medicare 

18 set-aside deemed a qualified Medicare 

19 set-aside under paragraph (4)(A), the 

20 amount calculated in accordance with 

21 such paragraph. 

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

23 set-aside of a compromise settlement 

24 agreement under paragraph 


smartinez on PROD1PC64 with BILLS
25 

•HR 2641 IH

1 (2)(C)(iii), the amount calculated in 

2 accordance with such paragraph. 

3 ‘‘(III) In the case of any Medi4 care set-aside, the amount based upon 

5 the payment amount for items and 

6 services under the workers’ compensa7 tion fee schedule (effective as of the 

8 date of the agreement) applicable to 

9 the workers’ compensation law or plan 

10 involved, in accordance with para11 graph (2)(C)(i)(I). 

12 ‘‘(IV) In the case of any Medi13 care set-aside, the payment amount 

14 applicable to the items and services 

15 under this title as in effect on the ef16 fective date of the agreement. 

17 Such transfer shall be in accordance with 

18 a procedure established by the Secretary 

19 and shall be made only upon written con20 sent of the other party to the agreement. 

21 ‘‘(ii) ELECTION SATISFYING LIABIL22 ITY.—An election made under clause (i), 

23 with respect to a qualified Medicare set24 aside shall satisfy any payment, in relation 

25 to the underlying claim of the related 


smartinez on PROD1PC64 with BILLS
26 

•HR 2641 IH

1 workers’ compensation settlement agree2 ment, required under subsection (b)(2) to 

3 be made by the claimant or payer to the 

4 Secretary. The Secretary shall have no fur5 ther recourse, directly or indirectly, under 

6 this title. 

7 ‘‘(B) REQUIREMENT FOR TIMELY NOTICE

8 OF MEDICARE REPAYMENTS OWED BY WORK9 ERS’ COMPENSATION CLAIMANT OR PAYER TO

10 SECRETARY.— 

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

12 days after the date on which the Secretary 

13 receives a request from a workers’ com14 pensation claimant or workers’ compensa15 tion payer for documentation of any condi16 tional payment made under subsection 

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

18 Secretary shall provide to the claimant or 

19 payer such documentation. Such docu20 mentation shall be sufficient for the claim21 ant or payer to make a reasonable deter22 mination whether such a payment was for 

23 an item or service furnished in connection 

24 with the claimant’s work related injury or 

25 illness involved. The claimant or payer may 


smartinez on PROD1PC64 with BILLS
27 

•HR 2641 IH

1 rely on the documentation provided under 

2 this clause in making such determination. 

3 Payment of the amount of the conditional 

4 payment, after deducting from such 

5 amount any procurement costs involved 

6 and any costs for unrelated and inappro7 priate items or services, shall discharge 

8 further liability with respect to the condi9 tional payment. 

10 ‘‘(ii) LIABILITY FOR REIMBURSE11 MENTS RELATED TO REQUESTED INFOR12 MATION.—If the Secretary fails to provide 

13 information in accordance with clause (i), 

14 then neither the claimant nor the payer de15 scribed in such clause shall be liable for 

16 any reimbursement under subsection 

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

18 payment for which information was re19 quested under such clause. 

20 ‘‘(C) PROTECTION FROM CERTAIN LIABIL21 ITY.— 

22 ‘‘(i) LIABILITY FOR MEDICARE SET23 ASIDE PAYMENT GREATER THAN PAYMENT

24 UNDER WORKERS’ COMPENSATION LAW.— 

25 No workers’ compensation claimant, workVerDate Nov 24 2008 00:08 May 27, 2009 Jkt 079200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\H2641.IH H2641

smartinez on PROD1PC64 with BILLS
28 

•HR 2641 IH

1 ers’ compensation payer, employer, admin2 istrator of the Medicare set-aside, legal 

3 representative of the claimant, payer, em4 ployer, or administrator, or any other 

5 party related to the claimant, payer, em6 ployer, or administrator shall be liable for 

7 any payment amount established under a 

8 Medicare set-aside for an item or service 

9 provided to the claimant that is greater 

10 than the payment amount for the item or 

11 service established under the workers’ com12 pensation fee schedule (or in the absence 

13 of such schedule, the medical reimburse14 ment rate) under the compensation law or 

15 plan of the jurisdiction where the agree16 ment will be effective. 

17 ‘‘(ii) LIABILITY FOR PROVIDER

18 CHARGES GREATER THAN PAYMENT

19 UNDER WORKERS’ COMPENSATION AGREE20 MENT.—With respect to a workers’ com21 pensation settlement agreement, a provider 

22 may not bill (or collect any amount from) 

23 the workers’ compensation claimant, work24 ers’ compensation payer, employer, admin25 istrator of the Medicare set-aside, legal 


smartinez on PROD1PC64 with BILLS
29 

•HR 2641 IH

1 representative of the claimant, payer, em2 ployer, or administrator, or any other 

3 party related to the claimant, payer, em4 ployer, or administrator an amount for 

5 items and services provided to the claimant 

6 that is greater than the payment rate for 

7 such items and services established under 

8 the Medicare set-aside of the agreement. 

9 No person is liable for payment of any 

10 amounts billed for an item or service in 

11 violation of the previous sentence. If a pro12 vider willfully bills (or collects an amount) 

13 for such an item or service in violation of 

14 such sentence, the Secretary may apply 

15 sanctions against the provider in accord16 ance with section 1842(j)(2) in the same 

17 manner as such section applies with re18 spect to a physician. Paragraph (4) of sec19 tion 1842(j) shall apply under this clause 

20 in the same manner as such paragraph ap21 plies under such section. 

22 ‘‘(D) AUTHORITY TO MODIFY OR TERMI23 NATE QUALIFIED MEDICARE SET-ASIDES.— 

24 ‘‘(i) IN CASE OF DEATH OF CLAIM25 ANT.—At any time after the death of a 


smartinez on PROD1PC64 with BILLS
30 

•HR 2641 IH

1 workers’ compensation claimant, an indi2 vidual entitled (after such death) to dis3 bursement of the funds remaining in the 

4 Medicare set-aside involved in the workers’ 

5 compensation claim of the claimant may 

6 submit to the Secretary a request to termi7 nate the Medicare set-aside upon a show8 ing of the death and payment of all claims 

9 that are subject to this subsection. 

10 ‘‘(ii) IN THE CASE OF MEDICAL IM11 PROVEMENT OR CHANGE OF CIR12 CUMSTANCES.—At any time after the date 

13 that is five years after the date of quali14 fication of a Medicare set-aside involved, 

15 the workers’ compensation claimant in16 volved may submit to the Secretary a re17 quest to modify or terminate the Medicare 

18 set-aside upon a showing of a substantial 

19 medical improvement of the claimant, with 

20 respect to the injury or illness involved, or 

21 of changed circumstances of the claimant 

22 that justify a reduction of the funds of the 

23 Medicare set-aside (as in existence on the 

24 date of such request) by at least 25 per25 cent. 


smartinez on PROD1PC64 with BILLS
31 

•HR 2641 IH

1 ‘‘(iii) NOTICE REQUIRED.—The Sec2 retary may not approve a request sub3 mitted under clause (i) or (ii) to modify or 

4 terminate a Medicare set-aside unless the 

5 workers’ compensation claimant involved or 

6 the individual entitled to disbursement (as 

7 described in clause (i)) includes with such 

8 request the following: 

9 ‘‘(I) Assurances satisfactory to 

10 the Secretary that at the time of the 

11 submission of such request the claim12 ant or individual entitled to disburse13 ment sent notice of such request to 

14 any party that has a reversionary in15 terest to such request and that is spe16 cifically designated in the Medicare 

17 set-aside for receipt of such notice. 

18 ‘‘(II) Assurances satisfactory to 

19 the Secretary that such notice was 

20 sent by certified mail to the address 

21 of record of such designated party. 

22 ‘‘(III) A copy of such notice. 

23 ‘‘(iv) PROCESS FOR APPROVAL OF AP24 PLICATIONS TO MODIFY OR TERMINATE

25 QUALIFIED MEDICARE SET-ASIDES IN THE


smartinez on PROD1PC64 with BILLS
32 

•HR 2641 IH

1 CASE OF MEDICAL IMPROVEMENT OR

2 CHANGE OF CIRCUMSTANCES.—Subpara3 graphs (B) and (C) of paragraph (3) shall 

4 apply to requests submitted to the Sec5 retary under clause (ii) to modify or termi6 nate a Medicare set-aside in the same 

7 manner as such subparagraphs apply to 

8 Medicare set-aside agreements submitted 

9 to the Secretary under subparagraph (A) 

10 of such paragraph to be deemed qualified 

11 Medicare set-asides. In applying such sub12 paragraphs (B) and (C), any reference to 

13 such subparagraph (A) shall be deemed a 

14 reference to clause (ii), and any reference 

15 in such subparagraph (B) to ‘the require16 ments of paragraph (2)(A)’ shall be 

17 deemed to include a reference to the show18 ing required under clause (ii). 

19 ‘‘(v) EFFECTIVE DATES FOR MODI20 FICATIONS AND TERMINATIONS.— 

21 ‘‘(I) FOR DEATH OF CLAIM22 ANT.—In the case of a termination re23 quest under clause (i) that is ap24 proved, the termination shall take ef25 fect on the latter of the date on which 


smartinez on PROD1PC64 with BILLS
33 

•HR 2641 IH

1 the showing described in such clause 

2 has been provided to the Secretary, or 

3 the date that is 60 days after the date 

4 on which the individual entitled to dis5 bursement of the funds remaining in 

6 the Medicare set-aside involved sends 

7 the notice under clause (iii) to the 

8 party designated for receipt of such 

9 notice. 

10 ‘‘(II) FOR MEDICAL IMPROVE11 MENT OR CHANGE OF CIR12 CUMSTANCES.—In the case of a modi13 fication request or termination request 

14 under clause (ii) that is approved ac15 cording to clause (iv), the modification 

16 or termination, respectively, shall take 

17 effect on the latter of the date of the 

18 approval or the date that is 60 days 

19 after the date on which the workers’ 

20 compensation claimant involved sends 

21 the notice under clause (iii) to the 

22 party designated for receipt of such 

23 notice. 

24 ‘‘(vi) TREATMENT OF REMAINING

25 MEDICARE SET-ASIDE FUNDS.—Upon terVerDate Nov 24 2008 00:08 May 27, 2009 Jkt 079200 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 E:\BILLS\H2641.IH H2641

smartinez on PROD1PC64 with BILLS
34 

•HR 2641 IH

1 mination or modification under this para2 graph, any funds released from the set3 aside shall revert pursuant to the terms of 

4 the settlement agreement, or if there is no 

5 reversionary clause, then such remaining 

6 funds shall be disbursed pursuant to the 

7 applicable State law. 

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

10 and subsection (n), 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 the total amount that could 

19 have been payable for a claim which is the subject 

20 of a compromise agreement in accordance with para21 graph (2)(C)(iii). A determination made by applica22 ble authority for a jurisdiction that a workers’ com23 pensation settlement agreement is in accordance 

24 with the workers’ compensation law of the jurisdicVerDate Nov 24 2008 00:08 May 27, 2009 Jkt 079200 PO 00000 Frm 00034 Fmt 6652 Sfmt 6201 E:\BILLS\H2641.IH H2641

smartinez on PROD1PC64 with BILLS
35 

•HR 2641 IH

1 tion shall not be subject to review by the Sec2 retary.’’. 

3 (c) CONFORMING AMENDMENTS.—Section 1862(b) 

4 of the Social Security Act (42 U.S.C. 1395y(b)), as 

5 amended by subsection (a), is further amended— 

6 (1) in paragraph (2)(B)(ii), by striking ‘‘A pri7 mary plan’’ and inserting ‘‘Subject to subsections 

8 (n) and (o), a primary plan’’; 

9 (2) in paragraph (2)(B)(iii)— 

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

11 order to recover payment’’ and inserting ‘‘Sub12 ject to subsection (o), in order to recover pay13 ment’’; and 

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

15 addition’’ and inserting ‘‘Subject to subsection 

16 (o), in addition’’; and 

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

18 established a private cause of action’’ and inserting 

19 ‘‘Subject to subsection (o), there is established a pri20 vate cause of action’’. 

21 (d) MODERNIZING TERMINOLOGY FOR PURPOSES OF

22 MEDICARE SECONDARY PAYER PROVISIONS.—Paragraph 

23 (2)(A) of such section is amended by striking ‘‘workmen’s 

24 compensation law or plan’’ and inserting ‘‘workers’ com25 pensation law or plan’’ each place it appears. 


smartinez on PROD1PC64 with BILLS
36 

•HR 2641 IH

1 SEC. 3. LIMITATION ON ADDITIONAL LIABILITY; SEVER2 ABILITY. 

3 (a) LIMITATION ON ADDITIONAL LIABILITY UNDER

4 CURRENT AGREEMENTS EXCEPT FOR FRAUD.—Nothing 

5 in the Medicare secondary payer provisions in section 

6 1862(b) of the Social Security Act (42 U.S.C. 1395y(b)) 

7 shall authorize the Secretary of Health and Human Serv8 ices to impose liability that is additional to the liability 

9 in effect on the date of the enactment of this Act with 

10 respect to a workers’ compensation settlement agreement 

11 the effective date of which is before such date of enact12 ment, except in the case of fraud. 

13 (b) SEVERABILITY.—If any provision of this Act or 

14 the amendments made by this Act or the application there15 of to any person or circumstance is held invalid, the re16 mainder of this Act, the amendments made by this Act, 

17 or the application thereof to other persons not similarly 

18 situated or to other circumstances shall not be affected 

19 by such invalidation. 

20 SEC. 4. EFFECTIVE DATE. 

21 The amendments made by section 2 shall apply to 

22 a workers’ compensation settlement agreement with an ef23 fective date on or after the date of the enactment of this 

24 Act. 

Æ 


smartinez on PROD1PC64 with BILLS