AIA Supports Legislation to Improve the Administration of Workers' Comp Set-Asides


Washington, DC ( - The American Insurance Association (AIA) today applauded the introduction of bipartisan legislation, the "Medicare Secondary Payer and Workers' Compensation Settlement Agreements Act of 2015" by Senators Bill Nelson (D-FL) and Rob Portman (R-OH) and Representatives Dave Reichert (R-WA) and Mike Thompson (D-CA).  The legislation requires the Centers for Medicare and Medicaid Services (CMS) to adhere to state laws when reviewing workers' compensation Medicare set-asides.

"This legislation will provide clear and consistent standards for the CMS administrative process," said Peter Foley, AIA  vice president of claims administration."The current CMS set-aside review process is both cumbersome and confusing.  The legislation's sponsors understand that a legislative solution is needed to address stakeholders' concerns."

Currently, CMS fails to provide consistent standards for determining amounts to be set-aside and provides no avenue to appeal CMS determinations.  This is a pervasive workers' compensation claims problem that impacts all stakeholders, injured workers, employers, insurers and state workers' compensation agencies, nationwide. 

"Passage of this legislation will compel CMS to make timely decisions and enable appeals when necessary," said Foley.  "The bill also contains much needed provisions to address costly problems that will benefit injured workers, employers and insurers alike."

The legislation seeks to:

- Establish clear criteria in the determination of the settlements that are qualified for acceptance and that may be submitted for review;

- Create certainty for calculating the amounts to be included in set-asides;

- Provide a reasonable time frame in which CMS is to review set-aside submissions;

- Provide an appeals process for parties to CMS determinations;

- Provide an optional direct payment of set-aside amounts to Medicare;

- Assure that settlements that meet the terms of federal statute at the time of settlement are not disapproved based on later changes in law, regulations or administrative interpretations.

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