I 
111TH CONGRESS 
1ST SESSION H. R. 2641 
To amend section 1862 of the Social Security Act with respect to the applica-
tion of Medicare secondary payer rules to workers’ compensation settle-
ment 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 En-
ergy 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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Medicare Secondary 
Payer and Workers’ Compensation Settlement Agree-
ments Act of 2009’’. 
VerDate Nov 24 2008 
00:08 May 27, 2009
Jkt 079200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H2641.IH
H2641
smartinez on PROD1PC64 with BILLS
SEC. 2. APPLICATION OF MEDICARE SECONDARY PAYER 
RULES TO CERTAIN WORKERS’ COMPENSA-
TION 
SETTLEMENT 
AGREEMENTS 
AND 
QUALIFIED 
MEDICARE 
SET-ASIDE 
PROVI-
SIONS. 
(a) EXCEPTION FROM SECONDARY PAYER PROVI-
SIONS FOR CERTAIN WORKERS’ COMPENSATION SETTLE-
MENT AGREEMENTS.—Section 1862 of the Social Security 
Act (42 U.S.C. 1395y) is amended— 
(1) in subsection (b)(2)(A)(ii), by inserting 
‘‘subject to subsection (n),’’ after ‘‘(ii)’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(n) EXCEPTION FROM SECONDARY PAYER PROVI-
SIONS FOR CERTAIN WORKERS’ COMPENSATION SETTLE-
MENT AGREEMENTS.— 
‘‘(1) IN GENERAL.—A workers’ compensation 
law or plan shall not be treated, for purposes of sub-
section (b), as a primary plan with respect to an ex-
empt workers’ compensation settlement agreement. 
‘‘(2) EXEMPT WORKERS’ COMPENSATION SET-
TLEMENT AGREEMENT DEFINED.—For purposes of 
this subsection, an ‘exempt workers’ compensation 
settlement agreement’ means a workers’ compensa-
tion agreement that is described in any of the fol-
lowing subparagraphs: 
VerDate Nov 24 2008 
00:08 May 27, 2009
Jkt 079200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H2641.IH
H2641
smartinez on PROD1PC64 with BILLS
‘‘(A) PRESENT
VALUE
OF
$25,000
OR 
LESS.—A workers’ compensation settlement 
agreement that has a present value, as deter-
mined under paragraph (3), that is, subject to 
the last sentence of this paragraph, $25,000 or 
less. 
‘‘(B) LIKELY INELIGIBILITY OF WORKERS’ 
COMPENSATION CLAIMANT FOR MEDICARE BEN-
EFITS.—A workers’ compensation settlement 
agreement the claimant of which is not eligible 
for benefits under this title as of the effective 
date of the agreement and, under paragraph 
(4), is unlikely to become so eligible within 30 
months after such effective date. 
‘‘(C) NO FUTURE MEDICAL EXPENSES.—A 
workers’ compensation settlement agreement 
the claimant of which is not eligible for pay-
ment of medical expenses incurred after the ef-
fective date of such agreement that are avail-
able under the workers’ compensation law or 
plan of the jurisdiction in which such agree-
ment will be effective. 
‘‘(D) NO LIMITATION ON FUTURE MEDICAL 
EXPENSES.—A workers’ compensation settle-
ment agreement that does not limit or extin-
VerDate 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
guish the right of the claimant involved to pay-
ment of medical expenses incurred after the ef-
fective date of such agreement that are avail-
able under the workers’ compensation law or 
plan of the jurisdiction in which such agree-
ment will be effective. 
The Secretary may adopt rules for an increase in the 
dollar amount specified under subparagraph (A). 
‘‘(3) DETERMINATION OF PRESENT VALUE OF 
WORKERS’ 
COMPENSATION
SETTLEMENT
AGREE-
MENT.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), for purposes of paragraph (2)(A) 
and subsection (o) and with respect to a work- 
related injury or illness that is the subject of a 
workers’ compensation settlement agreement, 
the present value of the agreement is the sum 
of any of the following amounts that are used 
to fund the agreement: 
‘‘(i) The amount of any cash payment. 
‘‘(ii) The amount of the purchase cost 
of an annuity (and not the payout or the 
projected payout paid during the term of 
such annuity). 
VerDate Nov 24 2008 
00:08 May 27, 2009
Jkt 079200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H2641.IH
H2641
smartinez on PROD1PC64 with BILLS
‘‘(iii) The amount of the sum of any 
funds under clause (i) or (ii), previously 
paid pursuant to a workers’ compensation 
settlement agreement for the same work-
ers’ compensation claim. 
‘‘(B) COSTS
EXCLUDED
FROM
PRESENT 
VALUE.—The present value of a workers’ com-
pensation settlement agreement does not in-
clude the following payments made because of 
the workers’ compensation claim involved: 
‘‘(i) Payments to satisfy previous un-
paid medical expenses. 
‘‘(ii) Payments to satisfy third party 
claims or liens for amounts previously 
paid, such as payments under this title, 
payments under the Medicaid program 
under title XIX, payments under a pro-
gram of the Department of Veterans Af-
fairs under title 38, United States Code, 
payments under an employee welfare ben-
efit plan (as defined in section 3(1) of the 
Employee Retirement and Income Security 
Act of 1974), and other similar third party 
payments. 
VerDate Nov 24 2008 
00:08 May 27, 2009
Jkt 079200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H2641.IH
H2641
smartinez on PROD1PC64 with BILLS
‘‘(iii) The attorney fees for the claim-
ant involved. 
‘‘(iv) Any other procurement costs in-
curred by a party to the agreement to se-
cure the agreement. 
‘‘(4) DETERMINATION
OF
LIKELY
INELIGI-
BILITY OF CLAIMANT FOR MEDICARE BENEFITS.— 
For purposes of paragraph (2)(B), a workers’ com-
pensation claimant shall be deemed unlikely to be-
come eligible for benefits under this title within 30 
months after the effective date of othe agreement 
unless, as of the effective date of the agreement, 
such claimant is insured for disability insurance ben-
efits as determined under subsection (c)(1) of sec-
tion 223 and meets any of the following require-
ments: 
‘‘(A) AWARDED
DISABILITY
BENEFITS.— 
The claimant has been awarded disability insur-
ance benefits. 
‘‘(B) 
APPLIED
FOR
DISABILITY.—The 
claimant has applied for disability insurance 
benefits and the claimant’s application has been 
pending without decision for 90 days or less 
after the date of filing the application. 
VerDate Nov 24 2008 
00:08 May 27, 2009
Jkt 079200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H2641.IH
H2641
smartinez on PROD1PC64 with BILLS
‘‘(C) APPEALING
DENIAL
OF
DISABILITY 
BENEFITS.—The claimant has been denied dis-
ability insurance benefits and is appealing (or 
intending to appeal) a denial of such benefits 
under subsection (a) of such section. 
‘‘(D) MINIMUM AGE.—The claimant is at 
least 62 years and 6 months of age. 
‘‘(E) END STAGE RENAL DISEASE.—The 
claimant is medically determined to have end 
stage renal disease, but does not as of such 
date qualify for benefits under this title by rea-
son of such disease. 
‘‘(5) DEFINITIONS.—For purposes of this sub-
section and subsection (o): 
‘‘(A) WORKERS’ COMPENSATION SETTLE-
MENT AGREEMENT.—The term ‘workers’ com-
pensation settlement agreement’ means an 
agreement, including a commutation agreement 
or compromise agreement, or any combination 
of both, between a workers’ compensation 
claimant and one or more workers’ compensa-
tion payers which is intended— 
‘‘(i) to foreclose the possibility of fu-
ture payment of some or all workers’ com-
pensation benefits involved; and 
VerDate Nov 24 2008 
00:08 May 27, 2009
Jkt 079200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H2641.IH
H2641
smartinez on PROD1PC64 with BILLS
‘‘(ii)(I) to compensate the claimant 
for a work-related injury or illness as pro-
vided for by a workers’ compensation law 
or plan; or 
‘‘(II) to eliminate cause for litigation 
involving issues in dispute between the 
claimant and payer. 
‘‘(B) WORKERS’ COMPENSATION PAYER.— 
The term ‘workers’ compensation payer’ means, 
with respect to a workers’ compensation law or 
plan, a workers’ compensation insurer, self-in-
surer, employer, individual, or any other entity 
that is or may be liable for the payment of ben-
efits to a workers’ compensation claimant pur-
suant to the workers’ compensation law or plan. 
‘‘(C) WORKERS’ COMPENSATION
CLAIM-
ANT.—The term ‘workers’ compensation claim-
ant’ means a worker who— 
‘‘(i) is or may be covered under a 
workers’ compensation law or plan (or 
similar compensation plan); and 
‘‘(ii) submits a claim or accepts bene-
fits under such law or plan (or similar 
compensation plan) for a work-related in-
jury or illness. 
VerDate Nov 24 2008 
00:08 May 27, 2009
Jkt 079200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H2641.IH
H2641
smartinez on PROD1PC64 with BILLS
‘‘(D) WORKERS’ COMPENSATION LAW OR 
PLAN.— 
‘‘(i) IN GENERAL.—The term ‘work-
ers’ compensation law or plan’ means a 
law or program administered by a State or 
the United States to provide compensation 
to workers for a work-related injury or ill-
ness (or for disability or death caused by 
such an injury or illness), including the 
Longshore and Harbor Workers’ Com-
pensation Act (33 U.S.C. 901–944, 948– 
950), chapter 81 of title 5, United States 
Code (known as the Federal Employees 
Compensation Act), the Black Lung Bene-
fits Act (30 U.S.C. 931 et seq.), and part 
C of title 4 of the Federal Coal Mine and 
Safety Act (30 U.S.C. 901 et seq.), but not 
including the Act of April 22, 1908 (45 
U.S.C. 51 et seq.) (popularly referred to as 
the Federal Employer’s Liability Act). 
‘‘(ii) INCLUSION
OF
SIMILAR
COM-
PENSATION PLAN.—Such term includes a 
similar compensation plan established by 
an employer that is funded by such em-
ployer or the insurance carrier of such em-
VerDate 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
ployer to provide compensation to a worker 
of such employer for a work-related injury 
or illness. 
‘‘(E) 
COMPROMISE
AGREEMENT.—The 
term ‘compromise agreement’ means a workers’ 
compensation settlement agreement that— 
‘‘(i) applies to a workers’ compensa-
tion claim that is denied or contested, in 
whole or in part, by a workers’ compensa-
tion payer involved under the workers’ 
compensation law or plan (or similar com-
pensation plan) applicable to the jurisdic-
tion in which the agreement has been set-
tled; and 
‘‘(ii) does not provide for a payment 
of the full amount of benefits sought or 
payable under the workers’ compensation 
claim. 
‘‘(F) COMMUTATION
AGREEMENT.—The 
term ‘commutation agreement’ means a work-
ers’ compensation settlement agreement to set-
tle all or a portion of a workers’ compensation 
claim, in which— 
‘‘(i) liability for past and future bene-
fits is not disputed; and 
VerDate Nov 24 2008 
00:08 May 27, 2009
Jkt 079200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H2641.IH
H2641
smartinez on PROD1PC64 with BILLS
‘‘(ii) the parties to the agreement 
agree to include payment for future work-
ers’ compensation benefits payable after 
the date on which the agreement becomes 
effective.’’. 
(b) SATISFACTION OF SECONDARY PAYER REQUIRE-
MENTS THROUGH USE OF QUALIFIED MEDICARE SET- 
ASIDES UNDER WORKERS’ COMPENSATION SETTLEMENT 
AGREEMENTS.—Section 1862 of the Social Security Act 
(42 U.S.C. 1395y), as amended by subsection (a), is fur-
ther amended by adding at the end the following new sub-
section: 
‘‘(o) TREATMENT OF QUALIFIED MEDICARE SET- 
ASIDES UNDER WORKERS’ COMPENSATION SETTLEMENT 
AGREEMENTS.— 
‘‘(1) SATISFACTION OF SECONDARY PAYER RE-
QUIREMENTS THROUGH USE OF QUALIFIED MEDI-
CARE SET-ASIDES.— 
‘‘(A) FULL SATISFACTION OF CLAIM OBLI-
GATIONS.— 
‘‘(i) IN GENERAL.—If a workers’ com-
pensation settlement agreement, related to 
a claim of a workers’ compensation claim-
ant, includes a qualified Medicare set- 
aside, such set-aside shall satisfy any obli-
VerDate 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