FlashReport: What Are the Prevalence and Size of Lump-Sum Payments in Workers’ Compensation: Estimates Relevant for Medicare Set-Asides

By Richard A. Victor, Rebecca (Rui) Yang, Carol A. Telles

October 1, 2006 Related Topics: Other

The Medicare Secondary Payer and Workers’ Compensation Settlement Agreements Act of 2006 was introduced in Congress to amend the procedures for establishing workers’ compensation Medicare set-asides.

This WCRI FlashReport, prepared at the request of two members of Congress, provides estimates of the frequency and size of lump-sum payments in workers' compensation. This information was requested to help analyze the fiscal impact of the current mechanism and of proposed amendments. 

Specifically, they requested information on:

  • The total number of workers' compensation claims paid in lump sum.
  • The percentage of lost-time workers' compensation claims paid by lump sum.
  • The distribution of these lump-sum payments, by the size of the lump sums.
  • The percentage of total workers' compensation benefits paid (lost-time cases) which are paid in lump sum.

For each tier, the percentage distributions of the lump-sum recipients by age of the recipient at the time of the lump-sum payment, particularly for those age 65 or older.

The estimates in this study were based on large samples of workers' compensation claims in 14 larger states. We analyzed cases with more than 7 days of lost time for injuries in 1999, with experience to 2005 (an average of 6 years post-injury).

FlashReport: What Are the Prevalence and Size of Lump-Sum Payments in Workers' Compensation: Estimates Relevant for Medicare Set-Asides. Richard A. Victor, Carol A. Telles, Rui Yang. October 2006. FR-06-01


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