Subrogation

Posted by Sylvius von Saucken

Question:
I just had a very nice elderly couple come into my office. They were hit by an uninsured drunk driver. Luckily, they had 100k in uninsured coverage. Medicare is claiming a right to subrogation. I thought the right to subrogation was strictly against any monies recovered from a 3rd party. Am I wrong?

Answer:
The third party includes the UIM carrier. The MSP Statute (42 U.S.C. 1395y(b)(2)(A)) identifies the parties responsible for payment, and that is not limited to a third party tortfeasor. Instead, the language requires:

(2) Medicare secondary payer
(A) In general

Payment under this subchapter may not be made, except as provided in subparagraph (B), with respect to any item or service to the extent that—

(i) payment has been made, or can reasonably be expected to be made, with respect to the item or service as required under paragraph (1), or
(ii) payment has been made, or can reasonably be expected to be made under a workmen’s compensation law or plan of the United States or a State or under an automobile or liability insurance policy or plan (including a self-insured plan) or under no fault insurance.

In this subsection, the term “primary plan” means a group health plan or large group health plan, to the extent that clause (i) applies, and a workmen’s compensation law or plan, an automobile or liability insurance policy or plan (including a self-insured plan) or no fault insurance, to the extent that clause (ii) applies. An entity that engages in a business, trade, or profession shall be deemed to have a self-insured plan if it carries its own risk (whether by a failure to obtain insurance, or otherwise) in whole or in part.

Our best,
Sylvius von Saucken