Medicare Secondary Payer and Negligence Lawsuits an Overview Patricia J. Foltz Anderson, Rasor & Partners, LLP June 21, 2013. Medicare’s Right of Recovery. Statutory reimbursement right Medicare is secondary to all types of liability insurance, including self-insurance.
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Statutory reimbursement right
Medicare is secondary to all types of liability insurance, including self-insurance.
Medicare may make “conditional payments” while a claim is pending and/or before a claim is filed. If a claim is pursued and resolved that resolution must include reimbursement of Medicare for expenses related to the claim.
This has been known as a “Medicare Lien”.
MSPRC identifies final payment amount, calculates amount owed (crediting procurement costs) and issues Demand Letter.
Payment due within 60 days of Demand Letter or interest accrues
If not paid within 60 days MSPRC issues an Intent to Refer Letter
If not paid within 60 days of Intent letter referred to Treasury for collection.
After the Demand Letter there is a route to appeal or request waiver.
If plaintiff/plaintiff’s representative/plaintiff’s lawyer does not address the “lien” Medicare can sue any one of them to recoup the “lien” amount.
Failure to pay “lien” may result in double damage.
RRE = Responsible Reporting Entity (aka insurer)
RRE becomes aware of lawsuit or claim
RRE obtains baseline information to query MMSEA (Medicare, Medicaid and SCHIP Extension Act of 2007) system.
RRE queries Medicare through MMSEA system to see if the plaintiff is a beneficiary
RRE should re query if case is close to trial or settlement
If plaintiff is a Medicare recipient the insurer and defendant’s lawyer should deal with the Medicare Lien during settlement discussions.
Plaintiff/Plaintiff’s lawyer must deal with Medicare.
If the injury is continuing hen plaintiff must deal with reimbursement of Medicare in the future.
Insurer is primarily responsible to Medicare for reimbursement
If Insurer pays beneficiary/beneficiary’s attorney they become responsible to pay Medicare
This does not relieve insurer of liability for payment. Medicare can still pursue the insurer.
Double damages for unpaid lien
$1000 per day for failure to report claims
Not dealing with Medicare lien where your client has provided care for the alleged injuries can lead to False Claims Act issues which include criminal sanctions.
Pay 25 % of settlement of $5000 or less
Pay nothing if settlement $300 or less
Self-calculate lien on settlement of $25,000 of less
All of these have caveats
Part C is Medicare Advantage, the Medicare HMO
Part D is prescription drug coverage
Both C and D involve a capitated payment by Medicare to a part C or D provider who assumes the risk of costs above that capitated payment
Both C and D work more as true “liens” not statutory rights of recovery. See, 42 CFR 422.108 and 42 CFR 423.462. The Part C providers bill the third parties themselves. Part D providers advise the COBC.