Proposed Legislation Would Raise Minimum Threshold for Medicare Set-Aside Arrangements
The Medicare Secondary Payer Act [42 U.S.C. §1395y(b)(2)] prohibits Medicare from paying a Medicare beneficiary's medical expenses when payment "has been made or can reasonably be expected to be made under a workmen's compensation plan. . . ." So when an injured worker settles his right to receive future medical care from the employer/carrier under the Florida Workers' Compensation Act, Medicare requires that its interests be considered in the settlement. See 42 C.F.R. §§411.46 and 411.47. In other words, Medicare will look with disfavor upon any attempt to shift responsibility for the claimant's future work-related medical expenses from the employer/carrier to Medicare. Consideration of Medicare's interests is accomplished through the use of a "Medicare Set-Aside Arrangement" whereby a portion of the settlement proceeds are allocated ("set aside") to cover the claimant/beneficiary's future work-related medical expenses. Once the money set aside for that purpose has been exhausted, Medicare becomes responsible for paying for all Medicare-covered expenses, even if they are work-related.
Unfortunately, obtaining Medicare's approval of any proposed set-aside arrangement often involves significant delay. And Medicare currently requires a set-aside arrangement if the claimant (a) is currently a Medicare beneficiary and the proposed settlement is greater than $25,000 or (b) has a "reasonable expectation" of becoming a Medicare beneficiary within 30 months from the date of settlement and the amount of the settlement is expected to be greater than $250,000.
A bill introduced in the House of Representatives on 5/24/2007, the "Medicare Secondary Payer and Workers' Compensation Settlement Agreements Act of 2007" (H.R. 2545), is intended to offer some relief in that regard. Under this proposed legislation, workers' compensation settlements of less than $250,000 (payable either in a lump sum or through an annuity whose present value is less than $250,000) would not require Medicare approval. For an excellent summary of this bill, see this post at the Traumatic Brain Injury Law Blog.
