Last month, Republican Senator Rob Portman (OH) and Democratic Senator Bill Nelson (FL) introduced a revised version of the 2014 previously failed legislation that called for the application of Medicare secondary payers rules to certain workers’ compensation settlement agreements and qualified Medicare set-aside provisions. The new and revised legislation is now known as Senate Bill 3079 and it has two main objectives: 1. To establish the adequacy and application of state provisions and state fee schedules for Medicare Set-Asides (MSAs); and 2. To establish a formal appeal process for the Medicare Set-Aside review process for those cases where a party is dissatisfied with the determination. The new bill also allows for an “optional direct payment of a Medicare Set-Aside amount.” The proposed revision would allow for the deposit of MSA funds directly to Medicare.

               However, the new legislation comes at a cost and presents several limitations. If a claimant or workers’ compensation payor who is a party to the agreement elects to make a direct payment to CMS instead of funding an MSA, the beneficiary then loses the ability to pass unused funds to their heirs. Under the current method, if a claimant dies before the WCMSA is completely exhausted, the RO and the BCRC will ensure that all claims have been paid. Then any amount left over in the WCMSA may be disbursed pursuant to state law, once Medicare’s interests have been protected. This may involve holding the WCMSA open for some period after the date of death, as providers, physicians, and other suppliers are permitted to submit their initial bill to Medicare for a period of 12 months after the date of service. Often, the settlement itself will dictate the appropriate dispersal of funds upon the death of the claimant.

With an MSA, a portion of the settlement amount is set-aside to pay for future medical needs with the intention of lasting over the course of the individual’s life expectancy. In the event of sudden or unexpected death of the claimant, the transfer of any unused funds may prove crucial in protecting your family’s future well-being.