WASHINGTON--Legislation to clarify the rules concerning Medicare system rights for recovering monies paid for claims that should have been covered by workers' compensation was introduced in the House today.

Under the Medicare Secondary Payer Act, the Medicare program has significant powers when it seeks to recover money for injuries that the government feels should have been covered by workers' compensation, including the so-called "super lien" which can be used to recover payments from the employer, the insurer, and the attorneys involved, among others.

But, "There are a number of costly problems and delays in enforcing the MSP for workers' comp settlements," said Bruce C. Wood, assistant general counsel for the American Insurance Association, which supports the new measure.

"This is a pervasive, national workers' compensation claims problem, and AIA has been working with a coalition of employers, defendant and claimant attorneys and other insurers to address the situation for several years," Mr. Wood said.

The Medicare Secondary Payer Act requires that the primary payer of a workers' compensation claim "reasonably consider" Medicare's interests when settling a claim, making it a virtual necessity to receive approval of a set-aside.

"When settling a workers' comp claim, most employers and workers do not want to take the risk that Medicare will assert its 'super lien' long after the settlement has closed," said Melissa Shelk, vice president of federal affairs for the AIA. "Nor do attorneys wish to be exposed to malpractice liability, perhaps years after the settlement."

Additionally, Ms. Shelk noted that the options for an insurer or other party facing a "super lien" are few.

"There is no effective recourse," she said. "There is no avenue to compel a timely decision or appeal a bad one."

The legislation, introduced by Reps. Clay Shaw, R-Fla., and John Tanner, D-Tenn., and known as the "Medicare Secondary Payer and Workers' Compensation Settlement Act of 2006," would clarify the process by implementing standards for what Medicare can claim and how such a claim should be addressed.

The secondary payer situation has been a concern for Eric Oxfeld, executive director of the Unemployment and Workers' Compensation Association,

In the past he has noted that Medicare approval has been "tying the comp system in knots. They take forever to look over a claim and Medicare regions are inconsistent in their rulings.

The agency's concern is that if the comp settlement does not set aside a sufficient amount for medical care, the claimant might eventually file a claim with Medicare for treatment of a workplace injury that should be covered by workers' comp.

According to Mr. Oxfeld, comp settlements have been held up for as long as a year, and in many cases the parties to the settlement have to pay for consultants and advisors to provide assurances that Medicare's interests are protected.

If the settlement fails to meet Medicare standards, workers can lose benefits, attorneys can be sued for malpractice and everyone--workers, employers and insurers--are at risk of having to pay Medicare double, according to Mr. Oxfeld.

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