Medicare Subrogation

Posted by Mary Skinner

Question:
Does a hospital (or any Medicare provider for that matter) have to bill Medicare in a standard MVA case? I take it that they don't. I used to get the response that they weren't "allowed" to bill Medicare but now it just seems to be simply that they won't bill Medicare.

Matt, I have a copy of something you posted in ‘06 saying that providers could now "bill" the liability settlement proceeds. You responded to a subsequent post saying that providers can "bill" or "place a lien" upon the liability policy (I'm assuming you were using those terms interchangeably) and that the strategy at the end would be to tell the provider it must submit to Medicare or take a reduced "Medicare-like" rate or the client won't take the settlement.

Are most hospitals electing not to bill Medicare in these situations? If so, do they truly have a "lien" of some nature (and not just an unpaid account) and how do they perfect it? As a practical matter are people having success with getting these providers to accept significantly reduced amounts at the end? What is the leverage on our end to get them to do so? With all due respect, I wouldn't think that just saying that the client won't settle would be very effective as I would think the hospital would just continue to wait out the claimant and hold out for a bigger payoff. Any advice or comments would be appreciated.

-Ohio Attorney

Answer:
I have seen an increase in the number of hospitals that are opting not to bill Medicare and file a hospital lien, however, in many instances they are filing the lien for actual charges after Medicare denies the claim as “Medicare not primary,” which they cannot do. Once they submit a claim, it negates their right to go after actual charges.

When a Medicare provider of services learns that a beneficiary received services that may be payable by a payer primary to Medicare, the provider is required to pursue payment from the primary payer for a period of 120 days following the date of treatment. At the end of the 120 day period, if the insurer has not made payment, the provider may choose to bill Medicare or continue to wait for payment from a future insurance settlement. If the provider chooses to bill Medicare, then it becomes the Medicare Secondary Payer Recovery Contractors responsibility to recover Medicare’s payment if a settlement occurs at some point in the future. The provider of service is not required to send the bill to Medicare if they choose to pursue payment from a possible future insurance settlement.

-Mary Skinner