The following is an article that was posted on my website,
www.steigerlaw.com As a preface to the article, it should be noted that your attorney has a statutory obligation to follow the rules as they apply to Medicare in relation to a personal injury matter.
By the way, You Can Follow me on Twitter
Medicare, established in 1965, is a federal health care plan for
those 65 and older, in addition to certain persons under 65 (e.g., the
disabled). In the event a Medicare recipient is injured through the
fault of another, he may have the right to recover from the person
causing injury (or his insurance company).
MedicareMedicare was initially the "primary payer" for
medical services to beneficiaries, meaning that it paid first for
medical costs, even where other sources existed. However, high costs
led Congress, beginning in 1980, to enact "
Medicare Secondary Payer"
(MSP) laws. The MSP legislation sought to reduce Medicare costs by
requiring beneficiaries to first exhaust other sources of payment
before resorting to Medicare.
Medicare Payment for Treatment of Injuries
Federal law
generally prohibits Medicare from paying for any item or service where
payment can reasonably be expected from another "primary" source within
120 days. Primary sources include the following:
- Automobile insurance
- Liability insurance (including self-insurance)
- No fault insurance
When payment from another source is probable, yet not likely to
occur within 120 days, the law allows "Conditional Medicare Payment"
for medical costs. Although Medicare providers are often required to
question patients regarding possible alternative sources of payment, as
a practical matter, the agencies that run Medicare have little way of
knowing about such alternatives. As a result, "conditional payment" is
often made.
Medicare Reimbursement: Rights and Duties
The MSP
system includes provisions for reimbursement and "
subrogation." In
other words, Medicare succeeds to the rights of the injured party to
sue the injuring party, or others, for recovery. Further, the
administration of enforcement efforts of Medicare reimbursement rights
has been contracted out to HGS Administrators (HGSA).
Debate has taken place over the nature and extent of Medicare's
right to recover. Some commentators, for example, have called it a
"super lien" against any settlement or judgment in a personal injury
lawsuit. Strictly speaking, the right to recover does not technically
constitute a lien (i.e., not a right to recover from specific property
or funds). However, the MSP program grants extensive powers and
specifies broad rights and duties related to reimbursement of
"conditional payments." These include, but are not limited to:
- A duty on the part of the beneficiary (and maybe her attorney) to
notify HGSA of any lawsuit and pending or possible settlement or
recovery.
- The beneficiary (and maybe her attorney) has a statutory duty to
reimburse Medicare for its "conditional payments" within 60 days of
receipt of a "third party-payment" (e.g., a settlement or collection on
a judgment). If payment is not timely made, Medicare may begin
charging interest.
- HGSA and Medicare have the right to seek repayment (e.g., bring a
collection action) from a wide range of individuals who receive
payment, but fail to reimburse Medicare (including the injured party
and her attorney). Although it is not clear whether Medicare can
proceed directly against the injured person's attorney after the money
has been distributed, at least one court has affirmed this right. In
general, however, it appears that if the money has been distributed and
spent, the injured person's future Social Security benefits will be
used to reimburse Medicare.
- As part of Medicare's right of action, it may recover double the
amount of the conditional payments from an insurance company that is a
"third-party payer" and "primarily liable" for the damages. This is
true even if payment has already been made to the injured party. As a
consequence, the insurance company may end up paying the injured person
and Medicare (resulting in triple payment). Furthermore, Medicare has
the right to deduct the amount from Medicare payments owing to the
third-party payer.
- Medicare is deemed to have a "priority right of recovery;" i.e., it
takes precedence even if state law or the third-party payer asserts
otherwise.
Waiver or Compromise
Depending on the circumstances,
Medicare may waive its right to reimbursement, though it is more likely
to compromise the amount. Under applicable regulations, Medicare will
reduce its recovery to allow for the cost of procuring the settlement
or judgment, including attorneys' fees.
Follow me on Twitter
