June 01, 2016

Medicare Set-Asides

The ABA Governmental Affairs Office cosponsored a briefing on Capitol Hill June 16 to educate congressional staff and the public on the need for enactment of H.R. 2649 and S. 1514, legislation that would reform the administration of the Medicare secondary payer provisions in cases involving workers’ compensation settlements. Congress passed the Medicare Secondary Payer Act in 1980 as a way to control the expanding costs to the Medicare program by identifying specific conditions under which Medicare is a secondary payer when another source of funds is available for medical treatment. If an individual who is or likely to become a Medicare beneficiary is injured and receives damages covering expenses that will be incurred over time, some of that award must be set aside to cover future medical expenses that would otherwise be covered by Medicare. The legislation would improve the current process that was put in place in 2001 by the Centers for Medicare and Medicaid Services (CMS) by creating certainty for calculating the amounts to be included in set-asides and by providing the following: criteria for optional “qualified” set-aside arrangements; the ability to establish fair guidelines for set-asides in compromise settlement cases; a reasonable time frame for CMS review of set-asides; an appeals process; and an optional direct payment of set-aside amounts to Medicare. At the briefing, ABA Legislative Counsel David Eppstein appeared on a panel that featured representatives of groups that are part of a coalition supporting the legislation. ABA policy adopted in 2005 and reaffirmed in 2011 urges Congress to enact legislation that includes certain principles, including setting clear criteria for when a set-aside may be reviewed by CMS and putting an appeals procedure in place. “This legislation has the support of both plaintiff and defense attorneys. Among the many helpful provisions in the bills is one that clarifies the relationship between state and federal law in this area, something the ABA has been calling for since 2005,” Eppstein said.

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