I 
114TH CONGRESS 
1ST SESSION H. R. 2649 
To amend title XVIII of the Social Security Act to provide for the application 
of Medicare secondary payer rules to certain workers’ compensation set-
tlement agreements and qualified Medicare set-aside provisions. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 4, 2015 
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 title XVIII of the Social Security Act to provide 
for the application of Medicare secondary payer rules 
to certain workers’ compensation settlement agreements 
and qualified Medicare set-aside provisions. 
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 2015’’. 
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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) meets 
any of the following requirements: 
‘‘(A) TOTAL
SETTLEMENT
AMOUNT
NOT 
EXCEEDING
$25,000.—Such 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 subject to such agree-
ment— 
‘‘(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
WORKERS’ COMPENSA-
TION MEDICAL EXPENSES.—The claimant sub-
ject to such agreement is not eligible for pay-
ment of medical expenses incurred after the ef-
fective date of the agreement from the workers’ 
compensation law or plan of the jurisdiction in 
which such agreement will be effective. 
‘‘(D) NO LIMITATION ON FUTURE WORK-
ERS’ COMPENSATION
MEDICAL
EXPENSES.— 
Such agreement does not limit or extinguish the 
right of the claimant to payment of medical ex-
penses incurred after the effective date of such 
agreement by 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 for disability insurance benefits 
under section 223(c)(1) and is described in any of 
the following subparagraphs: 
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‘‘(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 is medically determined to have end- 
stage renal disease 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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‘‘(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, which includes a commutation 
agreement or compromise agreement, or any 
combination of both, between a claimant and 
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one or more workers’ compensation payers 
which— 
‘‘(i) forecloses the possibility of future 
payment of some or all workers’ compensa-
tion benefits involved; and 
‘‘(ii)(I) compensates the claimant for 
a work-related injury or illness as provided 
for by a workers’ compensation law or 
plan; or 
‘‘(II) eliminates cause for litigation in-
volving 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.—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: 
‘‘(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.— 
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‘‘(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 
(as defined in paragraph (2)), such set- 
aside shall satisfy any obligation with re-
spect to the future payment reimbursement 
under subsection (b)(2) with respect to 
such claim. 
‘‘(ii) 
RULE
OF
CONSTRUCTION.— 
Nothing in this section shall be construed 
as requiring the submission of a Medicare 
set-aside to the Secretary. 
‘‘(B) MEDICARE
SET-ASIDE
AND
MEDI-
CARE SET-ASIDE AMOUNT DEFINED.—For pur-
poses of this subsection: 
‘‘(i) 
MEDICARE
SET-ASIDE.—The 
term ‘Medicare set-aside’ means, with re-
spect to a workers’ compensation settle-
ment agreement, a provision in the agree-
ment that provides for a payment of a 
lump sum, annuity, a combination of a 
lump sum and an annuity, or other 
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amount that is in full satisfaction of the 
obligation described in subparagraph (A) 
for items and services that the workers’ 
compensation claimant under the agree-
ment received or is likely to receive under 
the applicable workers’ compensation law 
and for which payment would be made 
under 
this 
title, 
but 
for 
subsection 
(b)(2)(A). 
‘‘(ii) 
MEDICARE
SET-ASIDE 
AMOUNT.—The term ‘Medicare set-aside 
amount’ means, with respect to a Medicare 
set-aside, the actual dollar amount pro-
vided for in clause (i). 
‘‘(2) QUALIFIED MEDICARE SET-ASIDE.— 
‘‘(A) REQUIREMENTS OF QUALIFIED MEDI-
CARE
SET-ASIDE.—For purposes of this sub-
section, a Medicare set-aside shall be deemed to 
be a qualified Medicare set-aside if the Medi-
care set-aside amount reasonably takes into ac-
count the full payment obligation described in 
paragraph (1)(A), while meeting the require-
ments of subparagraphs (B) and (C) and is de-
termined based on the following: 
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‘‘(i) The illness or injury giving rise to 
the workers’ compensation claim involved. 
‘‘(ii) The age and life expectancy of 
the claimant involved. 
‘‘(iii) The reasonableness of and ne-
cessity for future medical expenses for 
treatment of the illness or injury involved. 
‘‘(iv) The duration of and limitation 
on benefits payable under the workers’ 
compensation law or plan involved. 
‘‘(v) The regulations and case law rel-
evant to the State workers’ compensation 
law or plan involved. 
‘‘(B) ITEMS AND SERVICES INCLUDED.—A 
qualified Medicare set-aside— 
‘‘(i) shall include payment for items 
and services that are covered and otherwise 
payable under this title as of the effective 
date of the workers’ compensation settle-
ment agreement and that are covered by 
the workers’ compensation law or plan; 
and 
‘‘(ii) is not required to provide for 
payment for items and services that are 
not described in clause (i). 
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jury or illness as defined under such 
law or plan (or in the absence of such 
a schedule, the applicable medical re-
imbursement rate under such law or 
plan). 
‘‘(ii) OPTIONAL
PROPORTIONAL
AD-
JUSTMENT FOR COMPROMISE SETTLEMENT 
AGREEMENTS.— 
‘‘(I) IN GENERAL.—In the case 
of a compromise settlement agree-
ment, a claimant or workers’ com-
pensation payer who is party to the 
agreement may elect to calculate the 
Medicare set-aside amount of the 
agreement by applying a percentage 
reduction to the Medicare set-aside 
amount 
for 
the 
total 
settlement 
amount that could have been payable 
under the applicable workers’ com-
pensation law or similar plan involved 
had the denied, disputed, or contested 
portion of the claim not been subject 
to a compromise agreement. The per-
centage reduction shall be equal to the 
denied, disputed, or contested percent-
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age of such total settlement. Such 
election may be made by a party to 
the agreement only with the written 
consent of the other party to the 
agreement. 
‘‘(II) 
APPLICATION.—If 
the 
claimant or workers’ compensation 
payer elects to calculate the Medicare 
set-aside amount under this clause, 
the 
Medicare 
set-aside 
shall 
be 
deemed a qualified Medicare set-aside. 
‘‘(3) PROCESS FOR APPROVAL OF QUALIFIED 
MEDICARE SET-ASIDES.— 
‘‘(A) OPTIONAL PRIOR APPROVAL BY SEC-
RETARY.—A party to a workers’ compensation 
settlement agreement that includes a Medicare 
set-aside may submit to the Secretary the Medi-
care set-aside amount for approval of the set- 
aside as a qualified Medicare set-aside. 
‘‘(B) NOTICE OF DETERMINATION OF AP-
PROVAL OR DISAPPROVAL.—Not later than 60 
days after the date on which the Secretary re-
ceives a submission under subparagraph (A), 
the Secretary shall notify in writing the parties 
to the workers’ compensation settlement agree-
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ment of the determination of approval or dis-
approval. If the determination disapproves such 
submission the Secretary shall include with 
such notification the specific reasons for the 
disapproval. 
‘‘(C) FAILURE BY SECRETARY TO PROVIDE 
NOTICE.—In the case of a failure by the Sec-
retary to mail or deliver the notice of the deter-
mination under subparagraph (B) by the last 
day of the period described in such subpara-
graph, the party involved may file an appeal di-
rectly to the administrative law judge within 30 
days after such failure. 
‘‘(4) APPEALS.— 
‘‘(A) IN GENERAL.—A party to a workers’ 
compensation settlement agreement that is dis-
satisfied with a determination under paragraph 
(3)(B), upon filing a request for reconsideration 
with the Secretary not later than 60 days after 
the date of notice of such determination, shall 
be entitled to— 
‘‘(i) reconsideration of the determina-
tion by the Secretary (with respect to such 
determination); 
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‘‘(ii) a hearing before an administra-
tive law judge thereon after such reconsid-
eration; and 
‘‘(iii) judicial review of the Secretary’s 
final determination after such hearing. 
‘‘(B) DEADLINES FOR DECISIONS.— 
‘‘(i) RECONSIDERATIONS.— 
‘‘(I) IN
GENERAL.—The Sec-
retary shall conduct and conclude a 
reconsideration of a determination 
under subparagraph (A)(i) and mail 
or deliver electronically the notice of 
the decision of such reconsideration to 
the party involved by not later than 
the last day of the 30-day period be-
ginning on the date that a request for 
such reconsideration has been timely 
filed. 
‘‘(II) APPEALS OF RECONSIDER-
ATIONS.—If a party to the workers’ 
compensation settlement involved is 
dissatisfied with the Secretary’s deci-
sion under subclause (I) that party 
may file an appeal within the 30-day 
period after the date of receipt of the 
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notice of the decision under such sub-
clause and request a hearing before 
an administrative law judge. 
‘‘(III) FAILURE
BY
SECRETARY 
TO PROVIDE NOTICE.—In the case of 
a failure by the Secretary to mail or 
deliver the notice of the decision 
under subclause (I) by the last day of 
the period described in such sub-
clause, the party involved may file an 
appeal directly to an administrative 
law judge not later than 30 days after 
such failure. 
‘‘(ii) HEARINGS.— 
‘‘(I) IN GENERAL.—An adminis-
trative law judge shall conduct and 
conclude a hearing on a decision of 
the Secretary or a determination with 
respect to which the Secretary failed 
to render a decision under paragraph 
(3)(B) or clause (i) and render a deci-
sion on such hearing by not later than 
the last day of the 90-day period be-
ginning on the date that a request for 
such hearing has been timely filed. 
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‘‘(II) JUDICIAL REVIEW.—A deci-
sion under subclause (I) by an admin-
istrative law judge constitutes a final 
agency action and is subject to judi-
cial review. 
‘‘(III) FAILURE BY ADMINISTRA-
TIVE LAW JUDGE TO RENDER TIMELY 
DECISION.—In the case of a failure by 
an administrative law judge to render 
a decision under subclause (I) by the 
last day of the period described in 
such subclause, the party requesting 
the hearing shall be entitled to judi-
cial review of the decision under sub-
paragraph (A), notwithstanding any 
requirements for a hearing for pur-
poses of the party’s right to such judi-
cial review. 
‘‘(5) ADMINISTRATION OF MEDICARE SET-ASIDE 
PROVISIONS; PROTECTION
FROM
CERTAIN
LIABIL-
ITY.— 
‘‘(A) OPTIONAL
DIRECT
PAYMENT
OF 
MEDICARE SET-ASIDE AMOUNT.— 
‘‘(i) ELECTION FOR DIRECT PAYMENT 
OF
MEDICARE
SET-ASIDE.—Effective 30 
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workers’ compensation law or plan in-
volved, in accordance with paragraph 
(2)(C)(i)(I). 
‘‘(III) In the case of any Medi-
care set-aside, the payment amount 
applicable to the items and services 
under this title as in effect on the ef-
fective date of the agreement. 
Such transfer shall be made only upon 
written consent of the other party to the 
agreement. 
‘‘(ii) ELECTION
SATISFYING
LIABIL-
ITY.—An election made under clause (i), 
with respect to a qualified Medicare set- 
aside shall satisfy any payment, in relation 
to the underlying claim of the related 
workers’ compensation settlement agree-
ment, required under subsection (b)(2) to 
be made by the claimant or payer to the 
Secretary. 
‘‘(B) PROTECTION FROM CERTAIN LIABIL-
ITY.— 
‘‘(i) LIABILITY FOR MEDICARE SET- 
ASIDE PAYMENT GREATER THAN PAYMENT 
UNDER WORKERS’ COMPENSATION LAW.— 
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No workers’ compensation claimant, work-
ers’ compensation payer, employer, admin-
istrator of the Medicare set-aside, legal 
representative of the claimant, payer, em-
ployer, or administrator, or any other 
party related to the claimant, payer, em-
ployer, or administrator shall be liable for 
any payment amount established under a 
Medicare set-aside for an item or service 
provided to the claimant that is greater 
than the payment amount for the item or 
service established under the workers’ com-
pensation fee schedule (or in the absence 
of such schedule, the medical reimburse-
ment rate) under the compensation law or 
plan of the jurisdiction where the agree-
ment will be effective. 
‘‘(ii) 
LIABILITY
FOR
PROVIDER 
CHARGES
GREATER
THAN
PAYMENT 
UNDER WORKERS’ COMPENSATION AGREE-
MENT.—With respect to a workers’ com-
pensation settlement agreement, a provider 
may not bill (or collect any amount from) 
the workers’ compensation claimant, work-
ers’ compensation payer, employer, admin-
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istrator of the Medicare set-aside, legal 
representative of the claimant, payer, em-
ployer, or administrator, or any other 
party related to the claimant, payer, em-
ployer, or administrator an amount for 
items and services provided to the claimant 
that is greater than the payment rate for 
such items and services established under 
the Medicare set-aside of the agreement. 
No person is liable for payment of any 
amounts billed for an item or service in 
violation of the previous sentence. If a pro-
vider willfully bills (or collects an amount) 
for such an item or service in violation of 
such sentence, the Secretary may apply 
sanctions against the provider in accord-
ance with section 1842(j)(2) in the same 
manner as such section applies with re-
spect to a physician. Paragraph (4) of sec-
tion 1842(j) shall apply under this clause 
in the same manner as such paragraph ap-
plies under such section. 
‘‘(C) ELECTION
OF
PROFESSIONAL
OR 
BENEFICIARY SELF ADMINISTRATION OF MEDI-
CARE SET-ASIDE PAYMENTS.—Nothing in this 
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subsection or subsection (p) prohibits an indi-
vidual from electing to utilize professional ad-
ministration services or to self-administer pay-
ments of their Medicare Set-Aside in accord-
ance with existing law. 
‘‘(6) TREATMENT OF STATE WORKERS’ COM-
PENSATION LAW.—For purposes of this subsection 
and subsection (p), if a workers’ compensation set-
tlement agreement is accepted, reviewed, approved, 
or otherwise finalized in accordance with the work-
ers’ compensation law of the jurisdiction in which 
such agreement will be effective, such acceptance, re-
view, approval, or other finalization shall be deemed 
final and conclusive as to any and all matters within 
the jurisdiction of the workers’ compensation law, 
including the determination of reasonableness of the 
settlement value; any allocations of settlement funds; 
the projection of future indemnity or medical bene-
fits that may be reasonably expected to be paid 
under the State workers’ compensation law; and, in 
the case of a compromise agreement, the total 
amount that could have been payable for a claim 
which is the subject of such agreement in accordance 
with paragraph (2)(C)(ii).’’. 
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(c) CONFORMING AMENDMENTS.—Subsection (b) of 
such section is further amended— 
(1) in paragraph (2)(B)(ii), by striking ‘‘para-
graph (9)’’ and inserting ‘‘paragraph (9) and sub-
sections (p) and (q)’’; 
(2) in paragraph (2)(B)(iii)— 
(A) in the first sentence, by striking ‘‘In 
order to recover payment’’ and inserting ‘‘Sub-
ject to subsection (q), in order to recover pay-
ment’’; and 
(B) in the third sentence, by striking ‘‘In 
addition’’ and inserting ‘‘Subject to subsection 
(q), in addition’’; and 
(3) in paragraph (3)(A), by striking ‘‘There is 
established a private cause of action’’ and inserting 
‘‘Subject to subsection (q), there is established a pri-
vate cause of action’’. 
(d) MODERNIZING TERMINOLOGY FOR PURPOSES OF 
MEDICARE SECONDARY PAYER PROVISIONS.—Subsection 
(b)(2)(A) of such section is amended by striking ‘‘work-
men’s compensation law or plan’’ and inserting ‘‘workers’ 
compensation law or plan’’ each place it appears. 
(e) LIMITATION ON LIABILITY.—The parties to a 
workers’ compensation settlement agreement which met 
the provisions of section 1862(b) of the Social Security 
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Act (42 U.S.C. 1395y(b)) on the effective date of settle-
ment shall be accepted as meeting the requirements of 
such section notwithstanding changes in law, regulations, 
or administrative interpretation of such provisions after 
the effective date of such settlement. 
(f) EFFECTIVE DATE.—The amendments made by 
this section, unless otherwise specifically specified, shall 
apply to a workers’ compensation settlement agreement 
with an effective date on or after October 1, 2015. 
Æ 
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