In February 2024, a bipartisan bill (H.R. 7368) was introduced to amend the Medicare Secondary Payer (MSP) statute (42 USC §1395y(b)) concerning workers’ compensation cases. The bill was assigned to the House Ways and Means Committee’s Subcommittee on Health, but no action was taken prior to the end of the current session of Congress on November 1, 2024.
The MSP statute defines a “primary payer” as including any workers’ compensation insurance or self-insurance plan, and it exempts from Medicare coverage any medical expense for which “payment has been made or can reasonably be expected to be made under a workmen’s compensation law or plan.” However, it contains no provision for or reference to Workers’ Compensation Medicare Set-aside Arrangements (MSAs)-- money that is set-aside from the settlement in a separate back account and required to be used solely for Medicare-covered medical expenses related to the work injury.
Since 2001 CMS has issued a series of memoranda intended to provide a means for insurers and self-insured entities to prevent CMS from rejecting a settlement (and then imposing liability for post-settlement medical expenses). CMS has instituted a voluntary process for submission and approval of an MSA. However, IFMK attorneys and others practicing Workers’ Compensation find that the CMS system for MSA approval is fraught with issues that can make such submission undesirable or untenable for the parties to a workers’ compensation case.
The COMP Act proposed some important remedies:
- Reform of current laws and practices and establishment of the first codified statute regarding MSAs, while keeping MSAs voluntary.
- Establishment of a new appeal process for MSAs that were submitted to CMS for approval, using the same appeal process as other Medicare or social security claims, including review by an administrative law judge and further judicial review by the court.
- Adoption of an option whereby the MSA funds can be paid directly to CMS in full satisfaction of future medical expenses related to the work injury, rather than being administered out of a separate back account.
- A clear process for reaching a full and final settlement of workers’ compensation claims, while protecting the Medicare trust fund from attempts to shift responsibility from workers’ compensation plans.
In our view, the COMP Act proposed a clear process for reaching a full and final settlement of workers’ compensation claims, while protecting the Medicare trust fund from attempts to shift responsibility from workers’ compensation plans. We are optimistic the new Congress will continue the effort to provide a realistic framework for resolving disputed claims in which a compromise is the best outcome for both parties. For additional information, contact an attorney on our MSP Team.