If you suffered bodily injury and or emotional distress due to an auto accident and Medicare paid benefits on your behalf it is likely that you will have to repay Medicare. In California your lawyer must notify Medicare of a pending claim, lawsuit or settlement. In that regard, your lawyer must inform Medicare of the nature and extent of your injury, a list of medical providers and the amount of settlement (if any). Then Medicare Recovery Contractor will research all claims and determine which claims relate to your injuries. This process can take weeks and even months to complete, however once all claims are processed, then Medicare will issue a Conditional Payment Letter. This information can be retrieved via website at www.mymedicare.gov website. It is critical that your attorney rewview all claims to ensure that there are no unrelated claims. If unrelated claims are discovered then your lawyer must inform The Medicare Contractor immediately.
After a final settlement is reached and Medicare is informed as to the amount, Medicare will then issue a Final Demand Letter. Medicare will take into consideration the gross settlement award, attorney fees and any additional cost related to the litigation in calculating repayment. In order to maximize your settlement it is imparative that the lawyer explain your unique situation in that if full reimbursement is sought, then you as a client would be left with nothing in terms of actual money damages.
There is a third process with is not fully explained in pamflets or brochures from Medicare which can reduce repayment even further. After a final demand letter is received, the lawyer may then make a request for Compromise, these amounts can be any amount, but in my experience usually Medicare will not accept amounts less than 50% of the final demanded amount absent circumstances that would constitute a substantial hardship on the beneficiary.