Medicare on Settlement Check

Posted by Matthew Garretson

Question:
Evidently, defense firms are now trying to say the new Medicare laws require them to put Medicare’s name on the settlement checks “to protect their clients from liability.” Is anyone else seeing this? How would you handle it?

-Arkansas Attorney

Answer:
While it is never a good thing to have Medicare’s name on the check, if it happens Medicare’s process is as follows: All parties must endorse the check. Once Medicare issues its Final Demand, the check is then sent to Medicare Secondary Payer Recovery Contractor (MSPRC) for deposit. MSPRC will issue a separate check, minus Medicare’s claim amount, to the attorney after a five-day waiting period; or send MSPRC a separate check for only Medicare’s claim amount, along with the multi-party check. Medicare will deposit the check made out to Medicare and endorse the multi-party check. The multi-party check will be immediately returned to the attorney.

We are seeing more and more of this as defendants reacts to the new MMSEA Statute that (beginning next year) requires them to report all settlements with Medicare beneficiaries to Medicare (see www.garretsonfirm.com and see MMSEA section). This puts defendants on Medicare’s radar (if the claimant doesn’t pay the Medicare reimbursement claim (a/k/a Medicare lien). So, we have some defendants now either a) putting Medicare’s name on the check; or, b) saying “we’ve got a settlement, but we will not make payment until we have proof that Medicare’s reimbursement claim has been satisfied. You might consider informing the defendants that CMS has clarified in several recent town hall meetings that CMS’ recovery practices have not changed on account of the new MMSEA statute. Furthermore, CMS has published several “user guides” and interpretative “alerts” and at no time have they stated that putting Medicare’s name on the check is a requirement. See http://www.cms.hhs.gov/MandatoryInsRep/Downloads/RevisedSection111022309.pdf. “The new Section 111 requirements do not change or eliminate any existing obligations under the MSP statutory provisions or regulations.”

I hope this information helps.

My best,
Matt Garretson