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Medicare Liens

Written by: Howard Robert Roitman

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What Medicare Will Look for from Your Accident Settlement

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

Alternative sources of payment

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.

After an Accident Coveraget that Pays First

If you have Medicare and other health insurance or coverage, each type of coverage is called a“payer.” When there is more than one payer, there are “coordination of benefits” rules that decidewhich one pays first. The “primary payer” pays what it owes on your bills, and then sends them tothe “secondary payer” to pay. In some cases, there may be a third payer.Whether Medicare pays first depends on a number of things,

Medicare and No-fault or Liability Insurance

What is no-fault insurance? No-fault insurance is insurance that pays for health care services resulting from injury to you or damage to your property in an accident,regardless of who is at fault for causing the accident.Some types of no-fault insurance include, but aren’t limited to the following:•Automobile insurance•Homeowners’ insurance•Commercial insurance plans

What is liability insurance?

Liability insurance is coverage that protects the policyholder against claims for negligence, inappropriate action, or inaction which results in injury to someone or damage to property.Liability insurance includes, but isn’t limited to the following:•Homeowners’ liability insurance•Automobile liability insurance•Product liability insurance•Malpractice liability insurance•Uninsured motorist liability insurance•Underinsured motorist liability insurance If you have an insurance claim for your medical expenses, you or your attorney should notify Medicare as soon as possible.

Who pays first if I have a claim for no-fault or liability insurance?

No-fault insurance or liability insurance pays first and Medicare pays second, if appropriate. Example Nancy is 69 years old. She’s a passenger in her granddaughter’s car, and they have an accident. Nancy’s granddaughter has Personal Injury Protection/Medical Payments (Med Pay)coverage as part of her automobile insurance. While at the hospital emergency room, Nancy is asked about available insurance coverage related to the accident. Nancy tells the hospital that her granddaughter has Med Pay coverage. Because this insurance pays regardless of fault, it is considered no-fault insurance. The hospital bills the no-fault insurance for the emergency room services, and only bills Medicare if any Medicare-covered services aren’t paid for by the

Medicare and No-fault or Liability Insurance (continued

If I expect to get money from no-fault or liability insurance, and I also have Medicare, which one should pay first? As explained above, no-fault or liability insurance should pay first. Note: Paying “first” means paying the whole bill up to the limits of the coverage. It doesn’t always mean that the primary payer pays first in time. If doctors or other providers are told that you have a no-fault or liability insurance claim, they must try to get payments from the insurance company before billing Medicare. However, this may take a long time. If the insurance company doesn’t pay the claim promptly (usually within 120 days), your doctor or other provider may bill Medicare. Medicare may make a conditional payment to pay the bill, and then later recover any payments that the primary payer should have made.

What is a conditional payment?

A conditional payment is a payment that Medicare makes for services for which another payer is potentially responsible. This conditional payment is made so you won’t have to use your own money to pay the bill. The payment is “conditional” because it must be repaid to Medicare when a settlement, judgment, or award is reached.Note:If Medicare makes a conditional payment, and you get as settlement from an insurance company later, Medicare will recover the conditional payment from your settlement. You are responsible for making sure that Medicare gets repaid for the conditional payment.

Example

Example: Joan is driving her car when someone in another car hits her. Joan has to go to the hospital. The hospital tries to bill the other driver’s liability insurer. The insurance company disputes who was at fault, and won’t pay the claim right away. The hospital bills Medicare, and Medicare makes a conditional payment to the hospital for health care services that Joan received. Later, when a settlement is reached with the liability insurer,Joan must make sure that Medicare gets its money back for the conditional payment.

How does Medicare get its money back for the conditional payment?

If Medicare makes a conditional payment, you or your representative should call the Medicare Coordination of Benefits Contractor(COBC)at 1-800-999-1118. TTY users should call 1-800-318-8782. The COBC will notify the recovery contractor to work on your case. The recovery contractor is a separate contractor responsible for getting conditional payments repaid to Medicare.The recovery contractor will use the information that you or your attorney gave to the COBC. It will gather information about any conditional payments Medicare made which relate to your pending settlement, judgment, or award. Once a settlement, judgment, or award is final, you or your attorney should call the recovery contractor. The recovery contractor will get the final repayment amount (if any) on your case and issue a letter requesting repayment.

Who pays if the no-fault or liability insurance denies mymedical bill or is found not liable for payment?

In this case, Medicare will pay the same as it would if it were the only payer. However, Medicare will only pay for Medicare-covered services,and you will be responsible for your share of the bill (for example,coinsurance, copayment, or deductible) and for services that Medicare doesn’t cover.

Contact

If you have questions about a no-fault or liability insurance claim, call the insurance company. If you have questions about who pays first, call the Medicare Coordination of Benefits Contractor at 1-800-999-1118. TTY users should call 1-800-318-8782.

Liability Insurance

Liability Insurance (Rev. 49, Issued: 04-07-06; Effective/Implementation: 05-08-06) Under §1862(b)(2) of the Act, (42 U.S.C. 1395y(b)(1)), Medicare does not make payment for covered items or services to the extent that payment has been made, or can reasonably be expected to be made under a liability insurance policy or plan (including a self-insured plan). Under certain circumstances, Medicare may make conditional payments if the liability insurance will not pay or will not pay promptly. Conditional payments are conditioned on reimbursement to the Medicare program to the extent that payment with respect to the same items or services has been made, or could be made, under a liability insurance policy or plan (including a self-insured plan).

Medicare’s Recovery Rights

Medicare has a statutory direct right of recovery from the liability insurance as well as any entity that has received payment directly or indirectly from the proceeds of a liability insurance payment. Medicare's recovery rights take precedence over the claims of any other party, including Medicaid. Medicare's recovery right is superior to other entities including Medicaid because Medicare’s direct right of recovery is explicitly prescribed in Federal law and other entities’ recovery rights are based on either State law or subrogation rights.

Additional Medicare Recovory Rights for an Accident

In addition to its direct rights of recovery, Medicare has subrogation rights. "Subrogation" literally means the substitution of one person or entity for another. If Medicare exercises its subrogation rights, Medicare is a claimant against the responsible party and the liability insurer to the extent that Medicare has made payments to or on behalf of the beneficiary for services related to claims against the alleged tortfeasor (and the alleged tortfeasor’s liability insurance). Medicare can be a party to any claim by a beneficiary or other entity against an alleged tortfeasor and/or his/her liability insurance and can participate in negotiations concerning the total liability insurance payment and the amount to be repaid to Medicare.

Permissible Liens for an accident

The MSP provisions do not create lien rights when those rights do not exist under State law. Where permitted by State law, a provider, physician, or other supplier may file a lien for full charges against a beneficiary’s liability settlement. (A lien against a beneficiary will be considered a lien against a liability settlement if there is a binding agreement that the lien will only be enforced if there is a settlement and will be withdrawn otherwise.) The provider, physician, or other supplier may enforce a permissible lien up to the lesser of the amount of the settlement and charges for the services incorporated in the lien. The provider, physician, or other supplier may not charge i

Medicare’s Recovery Rights For No Fault Accident

(Rev. 49, Issued: 04-07-06; Effective/Implementation: 05-08-06) Medicare has a statutory direct right of recovery from the no-fault insurance as well as any entity that has received payment directly or indirectly from the proceeds of a no-fault insurance payment. Medicare's recovery rights take precedence over the claims of any other party, including Medicaid. Medicare's recovery right is superior to other entities including Medicaid because Medicare’s direct right of recovery is explicitly prescribed in Federal law and other entities’ recovery rights are based on either State law or subrogation rights.

What Happens if the Provider, Physician, or Other Supplier Fails to File Correct and Accurate Claims with Medicare?

In addition to its direct rights of recovery, Medicare has subrogation rights. "Subrogation" literally means the substitution of one person or entity for another. If Medicare exercises its subrogation rights, Medicare is a claimant against the no-fault insurer to the extent that Medicare has made payments to or on behalf of the beneficiary for services related to claims against the no Federal law permits Medicare to recover its conditional payments. Providers, physicians, and other suppliers can be fined up to $2,000 for knowingly, willfully, and repeatedly providing inaccurate information relating to the existence of other health insurance or coverage.

Attorney Responsibility

Persons with Medicare must cooperate by providing appropriate information (including information regarding insurance that is primary to Medicare). 42 C.F.R. Sections 411.23, 411.24(1). Failure to cooperate in a recovery action by Medicare may result in Medicare recovering its payments from the person with Medicare.

with Medicare are responsible for taking whatever action is necessary to obtain any paymen

People with Medicare and their attorneys should note that if either or both of them receive a third party payment, Medicare has a right of action to recover its conditional payment from any entity including the person with Medicare and/or the attorney. (42 C.F.R. Section 411.24(g)). Thus, attorneys should be cognizant of, and take into account Medicare's interest when settling lawsuits or claims against third party payers. Persons with Medicare and their attorneys should contact Medicare, when they decide to initiate pursuit of a third party claim, in order to determine if a Medicare conditional payment has been made.

Statute of limitation for medicaid recovory from accident proceeds

Please be aware that the statute of limitation for Medicare to recover on an overpayment begins at the time Medicare is made aware that the overpayment exists.Please be aware that the statute of limitation for Medicare to recover on an overpayment begins at the time Medicare is made aware that the overpayment exists.

When you represent a person with Medicare Who has been injured in an accident, Medicare will need

• clients name • The person with medicare • The person with Medicare's health insurance claim number (HIC#) • Date of the accident • Status of the case • Projected time frame for settlement • Description of your client's injuries • Signed release of information agreement Notification should go to the Medicare office in the state where the person with Medicare resides.

You should notify Medicare (preferably in writing) when a settlement in an injury case occurs

You should notify Medicare (preferably in writing) when a settlement occurs. A Medicare overpayment is created when a settlement occurs and a settlement check has been received. Notification should include: • date of the settlement • amount of the settlement • amount of procurement costs (including attorney and other legal fees) • name and address of the liability insurer involved • signed settlement agreement or a copy of the settlement check As an Attorney, you must: • Immediately, upon taking a case, that involves a Medicare beneficiary, inform the COB Contractor about a potential liability lawsuit, and • Contact the assigned lead contractor regarding Medicare's interest in a liability, auto/no-fault, or workers' compensation lawsuit.

Medicare may reduce the amount it is owed

Medicare may reduce the amount it is owed by a pro rata portion of the procurement costs in liability cases. The formula for this reduction is found at 42 C.F.R. Section 411.37. Please include an itemization of the expenses. If there is a significant delay in time between the initial notification and settlement, or if there are numerous services, you may receive an interim itemization letter which gives you a listing of claims paid to date. This letter will instruct you not to submit a refund to Medicare until you receive a final notification, which will include the final amount owed to Medicare.

Good reason not have to repay Medicare with money received from a liability settlement

If the person with Medicare feels that there is a good reason why he/she should not have to repay Medicare with money received from a liability settlement, he/she may request that Medicare waive repayment either in part or in full. Medicare's overpayment should be repaid within 30 days even if the person with Medicare wishes to file a waiver request. Repaying Medicare will not affect the person with Medicare's right to request a waiver, but rather will prevent interest from accruing during the waiver process. A request for waiver must be made in writing within 60 days of the final determination letter.

Do not request a waiver until you have received the settlement check

If your client incurred any accident related out-of-pocket medical expenses please include that information when submitting the Overpayment Recovery Questionnaire. Proper documentation of out-of-pocket medical expenses must be submitted before they can be considered in the waiver request. Examples of proper documentation include cancelled checks (which correlate to bills received), notarized/sworn statement which attests to the validity of the expenses, receipts for services furnished and copies of bills demonstrating services furnished.

Compromise of Medicare's claim in your accident case

Authority to consider the compromise of Medicare's claim under the Federal Claims Collection Act (FCCA) at 31 U.S.C. Section 3711 et seq. and 42 C.F.R. Section 401.613. Medicare contractors are not permitted to compromise a claim. . A compromise may be granted if the debtor does not have the present or prospective ability to pay the full amount of Medicare's claim. Whether or not a compromise will be granted depends on a number of factors and each matter is considered on a case-by-case basis. A compromise decision made by CMS is final and is not subject to appeal.

Precedence of Federal Law In your accident case

Federal law takes precedence over State law and private contracts. Thus, for the categories of people described below, Medicare is the secondary payer regardless of state law or plan provisions. These Federal requirements are found in Section 1862(b) of the Social Security Act {42 USC Section 1395y(b)(5)}. Applicable regulations are found at 42 CFR Part 411 (1990).

Responsibilities of the injury client getting medicare

• Respond to Initial Enrollment Questionnaire (IEQ) and MSP claims development letters in a timely manner to ensure correct payment of your Medicare claims, • Be aware that changes in employment, including retirement and changes in health insurance companies may affect your claims payment, • When you receive health care services, tell your doctor and other providers and the Coordination of Benefits (COB) Contractor about any changes in your health insurance due to you, your spouse, or a family member's current employment or coverage changes, • Contact the COB Contractor if you take legal action or an attorney takes legal action on your behalf for a medical claim, • Contact the COB Contractor if you are involved in an automobile accident, and • Contact the COB Contractor if you are involved in a workers' compensation case.

Insurance Co's obligations to medicare in an injury case

• Report to the COB Contractor if you find that CMS has paid primary when you are primary to Medicare (i.e. 411.25). As a Non-GHP Auto/Liability Insurer, you must: • Contact the COB Contractor immediately when the individual you insure is a Medicare beneficiary.

Claim information on an injury case with medicare

Secondary Claim Development: When a claim is submitted with an explanation of benefits (EOB) attached from an insurer other than Medicare, a questionnaire is sent to the beneficiary to collect information on the existence of other insurance that may be primary to Medicare. Self-Report Development: A self-report covers the full spectrum of MSP situations. Any source that contacts the COB Contractor initiates this type of development process in order to address these inquiries and to assure that the information provided is accurate. Trauma Development: When a diagnosis appears on a claim that information is received through correspondence or on a claim that indicates a traumatic accident, injury, or illness, which might form the basis of MSP, a questionnaire is sent to collect information on the existence of other insurance that may be primary to Medicare. This questionnaire may be sent to the beneficiary, provider, attorney, or insurer.

Medicar's Lein Rights

Some people 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: • 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. • The beneficiary (and maybe her attorney) has a statutory duty to reimburse Medicare interest, after an injury settlment 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).

Profit center

Medicare has discovered that such recoveries are also a profit center. Attorneys handling tort cases have seen a marked increase in the number of demands for repayment emanating from Medicare, and they generally are aware that part of their responsibility in disbursing proceeds from a tort recovery is to reimburse Medicare. If they do not, Medicare may recover its share directly from the attorney.

Impossible, to get the government to take a position on the amount of the lien

The “super lien” strikes fear in the hearts of everyone involved in an injury settlement with an unpaid Medicare lien. It's hell when a case of less than 100% liability results in a settlement which leaves the plaintiff little or nothing after paying expenses and the Medicare lien, Worse it is difficult, if not impossible, to get the government to take a position on the amount of the lien so that it can be paid and the settlement concluded. It is not unusual to take months and even years to get a final number from the Federal government on theMedicare lien. Thus, the plaintiff’s attorney is forced to keep money in a trust account for a long time while the client is screaming for the money funds.