I 
112TH CONGRESS 
2D SESSION 
H. R. 5284 
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 
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 consider-
ation 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 2012’’. 
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SEC. 2. APPLICATION OF MEDICARE SECONDARY PAYER 
RULES TO CERTAIN WORKERS’ COMPENSA-
TION 
SETTLEMENT 
AGREEMENTS 
AND 
QUALIFIED 
MEDICARE 
SET-ASIDE 
PROVI-
SIONS. 
(a) THRESHOLD
FOR 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 (p),’’ after ‘‘(ii)’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(p) THRESHOLD FOR SECONDARY PAYER PROVI-
SIONS FOR CERTAIN WORKERS’ COMPENSATION SETTLE-
MENT AGREEMENTS.— 
‘‘(1) IN GENERAL.—A workers’ compensation 
law or plan shall not be treated as a primary plan 
for purposes of subsection (b) with respect to a 
workers’ compensation settlement agreement if the 
agreement (or claimant under the agreement) is de-
scribed in any of the following subparagraphs: 
‘‘(A) TOTAL
SETTLEMENT
AMOUNT
NOT 
EXCEEDING
$25,000.—The agreement has a 
total settlement amount (as determined under 
paragraph (2)) that does not exceed $25,000 or 
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such greater amount as the Secretary may 
specify in regulations. 
‘‘(B) LIKELY INELIGIBILITY OF WORKERS’ 
COMPENSATION CLAIMANT FOR MEDICARE BEN-
EFITS.—The claimant under the agreement— 
‘‘(i) is not eligible for benefits under 
this title as of the effective date of the 
agreement; and 
‘‘(ii) is unlikely to become so eligible, 
as determined under paragraph (3), within 
30 months after such effective date. 
‘‘(C) NO FUTURE MEDICAL EXPENSES.— 
The claimant under the agreement is not eligi-
ble for payment of medical expenses, incurred 
after the effective date of the agreement, that 
are available under the workers’ compensation 
law or plan of the jurisdiction in which such 
agreement will be effective. 
‘‘(D) NO LIMITATION ON FUTURE MEDICAL 
EXPENSES.—The agreement does not limit or 
extinguish the right of the claimant involved to 
payment of medical expenses, incurred after the 
effective date of such agreement, that are avail-
able under the workers’ compensation law or 
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plan of the jurisdiction in which the agreement 
will be effective. 
‘‘(2) DETERMINATION OF TOTAL SETTLEMENT 
AMOUNT
OF
WORKERS’ COMPENSATION
SETTLE-
MENT
AGREEMENT.—For purposes of paragraph 
(1)(A) and subsection (q) and with respect to a 
work-related injury or illness that is the subject of 
a workers’ compensation settlement agreement, the 
total settlement amount of the agreement is the sum 
of monetary wage replacement benefits, attorney 
fees, all future medical expenses, repayment of Medi-
care conditional payments, payout totals for annu-
ities to fund the expenses listed above, and any pre-
viously settled portion of the workers’ compensation 
claim. 
‘‘(3) DETERMINATION
OF
LIKELY
INELIGI-
BILITY OF CLAIMANT FOR MEDICARE BENEFITS.— 
For purposes of paragraph (1)(B)(ii), a workers’ 
compensation claimant shall be deemed unlikely to 
become eligible for benefits under this title within 30 
months after the effective date of the agreement un-
less, as of the effective date of the agreement, such 
claimant is insured, as determined under subsection 
(c)(1) of section 223, for disability insurance bene-
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fits under such section and is described in any of the 
following subparagraphs: 
‘‘(A) AWARDED
DISABILITY
BENEFITS.— 
The individual has been awarded such disability 
insurance benefits. 
‘‘(B) APPLIED FOR DISABILITY.—The indi-
vidual has applied for such disability insurance 
benefits. 
‘‘(C) ANTICIPATES
APPEAL.—The indi-
vidual has been denied such disability insurance 
benefits but anticipates appealing that decision. 
‘‘(D) APPEALING OR REFILING.—The indi-
vidual is in the process of appealing or refiling 
for such disability insurance benefits. 
‘‘(E) MINIMUM AGE.—The individual is at 
least 62 years and 6 months of age. 
‘‘(F) END-STAGE
RENAL
DISEASE.—The 
individual has an end-stage renal disease condi-
tion but does not yet qualify for health benefits 
under section 226A based on such disease. 
‘‘(4) DEFINITIONS.—For purposes of this sub-
section and subsection (q): 
‘‘(A) 
COMPROMISE
AGREEMENT.—The 
term ‘compromise agreement’ means a workers’ 
compensation settlement agreement that— 
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‘‘(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 applicable to the 
jurisdiction in which the agreement has 
been settled; and 
‘‘(ii) does not provide for a payment 
of the full amount of benefits sought or 
that may be payable under the workers’ 
compensation claim. 
‘‘(B) 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 
‘‘(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. 
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‘‘(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; and 
‘‘(ii) submits a claim or accepts bene-
fits under such law or plan for a work-re-
lated injury or illness. 
‘‘(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 
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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-
ployer to provide compensation to a worker 
of such employer for a work-related injury 
or illness. 
‘‘(E) 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. 
‘‘(F) 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 
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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 
‘‘(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) SATISFACTION OF SECONDARY PAYER REQUIRE-
MENTS THROUGH USE OF QUALIFIED MEDICARE SET- 
ASIDES UNDER WORKERS’ COMPENSATION SETTLEMENT 
AGREEMENTS.—Such section is further amended by add-
ing at the end the following new subsection: 
‘‘(q) 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.— 
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