Posted by John Cattie
Our client's mother was a passenger in a vehicle being driven by a family member. Mother sustained massive injuries, was hospitalized more than a month, and passed away three months later. Our client brought a wrongful death case against the driver, policy limits only 25/50, and insurance company wants to deduct $25,000 for contributory negligence.
Our question: Is Medicare entitled to any reimbursement where it is not the "Medicare recipient" receiving the settlement, but an heir?
An added note: The decedent had no assets, so no probate estate has been opened.
Great question. According to the Medicare policy, a beneficiary’s death does not materially change Medicare’s interest in recovering its payments made on behalf of the beneficiary while alive. Upon death, the estate of the beneficiary comes into existence by operation of law. An executor or administrator whose sole purpose is to conclude all business and financial matters that still remained at death manages it. Medicare’s interest in the outcome of a third party liability claim is one of these matters. Therefore, Medicare’s claim is properly asserted against the estate.
Medicare’s policy also sets forth the steps to be taken by the Medicare contractor in such situation: 1) when the contractor learns that the beneficiary has died, it identifies and contacts the executor or administrator, or whoever is acting in that capacity. It finds out if they are in possession of all Medicare correspondence that had been sent to the beneficiary while alive. If the information was not available, it sends the executor or administrator dated copies of all such notices; 2) if a settlement has been reached, a letter containing an initial determination should have been sent. The rights to request a waiver and/or appeal that are expressed in this letter apply equally to the estate, if there is a surviving spouse or dependent that is entitled under Title II or XVIII. When neither of these parties exists, waiver under §1870(c) may not be granted. (However, relief may still be available under §1862(b) or FCCA; and 3) the contractor will ensure that the executor or administrator understands Medicare’s priority right to satisfaction of its claim be re-emphasizing the fact in conversations.
In short, Medicare’s recovery rights are not ended by virtue of the beneficiary’s passing. However, you have told us that no estate has been opened due to the beneficiary having no assets. This appears as though a waiver could be argued based on financial hardship, but more facts would be needed to determine whether a waiver would really be appropriate. For additional guidance, please contact our Lien Resolution Supervisor, Joanne Saccone, at (704) 559-4300.