Medicare Lien, Funeral Expenses

Posted by Mary Skinner

Question:
We have a nursing home neglect case with a $53,183 Medicare lien. Roughly, we will have to pay Medicare back 60% since our fee is 40% and pro rata of expenses with a payback of approximately $28,000 to Medicare. We can certainly maintain that the client’s death was caused by sepsis from pressure ulcers that he unnecessarily acquired at the defendant nursing home.

The big question is this: if we were to settle this case for $75,000, leaving about $34,000 net, can we take the funeral bill ($11,000) and headstone bill ($7,000) off the top, as administrative costs of the wrongful death estate, leaving the balance of $16,000 to Medicare?
Thanks for your thoughts on this.

-Indianapolis Attorney

Answer:
Medicare will not consider funeral expenses when requesting a waiver (out of pocket expenses). Medicare will not consider the funeral expenses a case expense.

A. Beneficiary Documents Out-of-Pocket Expenses.
The following documentation should be considered proper proof of the expenses paid:
• Notarized/sworn statement which attests to the validity of the expenses;
• Canceled checks (which correlate to bills received);
• Receipts for services furnished; and• Copies of bills demonstrating services furnished.

B. Beneficiary’s Assets Insufficient to Repay Medicare
The contractor must not automatically assume that out-of-pockets should be waived. Using assets reported on the Form SSA-632-BK - Request for Waiver of Overpayment, it determines whether the beneficiary was actually able to afford the out-of-pocket expenses.

The following are types of out-of-pocket expenses that may support granting a waiver:
• Housing renovation - beneficiary’s residence had to be modified to accommodate beneficiary because of an accident-related injury e.g., addition of a ramp to accommodate a wheel chair;
• Adult diapers - where the accident caused loss of bladder use;
• Prescriptions for medication needed as a result of an accident-related injury;
• Private duty nursing or custodial care not covered by Medicare;
• Coinsurance and deductibles not covered by supplemental insurance; and
• Expenses for dental work caused by the accident.

Contractors should not consider:
• Funeral expenses; or
• Travel for relatives (even if accident-related).