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May 01, 2012

ABA supports Medicare Secondary Payer legislation

The ABA expressed support last month for legislation to address confusion and uncertainty in situations where Medicare is a secondary rather than the primary payer of medical expenses related to workplace injuries. 

H.R. 5284, sponsored by Reps. Dave Reichert (R-Wash.) and Mike Thompson (D-Calif.), would establish a predictable and efficient set-aside approval process that provides reasonable protection for injured workers and Medicare, according to the ABA.

Congress passed the Medicare Secondary Payer Act (MSP) in 1980 as a way to control the expanding costs of the Medicare program by identifying specific conditions under which Medicare is a secondary payer when another source of funds for medical treatment is available. In 2001, the Centers for Medicare and Medicaid Services (CMS), which administers the Medicare programs, determined that the Medicare Set-Aside Arrangement (MSA) is the recommended method of protecting Medicare’s future. An MSA creates a trust account setting aside a portion of a settlement for future medical expenses.

Currently, workers’ compensation settlements that overlap with Medicare coverage are subject to lengthy, cumbersome review by CMS to ascertain appropriate “set-aside” coverage amounts for medical expenses.

The MSP Act is being used by Medicare to assert the right to review and challenge settlements of Workers’ Compensation claims, and CMS has adopted internal procedures for prior review of proposed workers’ compensation settlements even though there is no statute or regulation providing for that.

In an April 26 letter to Reichert and Thompson, ABA Governmental Affairs Director Thomas M. Susman commended the legislators for incorporating certain principles in H.R. 5284 that reflect ABA policy adopted in February 2005.

“These principles,” Susman said, “include establishing clear criteria for when a set-aside may be reviewed by CMS, creating a time frame within which CMS must provide information regarding conditional payments, and establishing an appeal procedure if the parties dispute the CMS ruling regarding the allocation of settlement proceeds.”

Introducing the bill April 27, Reichert said, “This is a much-needed ‘common sense’ reform to ensure that Medicare claims are handled in a way that is more efficient so that the parties involved can move forward swiftly and with certainty to protect injured workers. Our bill gives injured workers the confidence that their health care claims will be processed in a fair and timely way.” 

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