Sunday, February 14, 2010

Medical Providers Billing Settlement Instead of Submitting Claims to Medicare

If a provider chooses to bill the liability insurance settlement, rather than submitting the claim to Medicare, does it have to reduce its lien by a pro-rata share of the "procurement costs?" The way the reg reads, it is ambiguous to me. Says they may collect their total charges up to the amount of the settlement less any applicable procurement costs. Does that mean if legal costs are 40% of the total settlement that every provider who chooses to file a lien has to accept a 40% reduction? Or does it mean their lien just doesn't attach to the part of the whole settlement that is going to the plaintiff's lawyer? EG, if a lien is $100,000, the settlement is $1,000,000 and the procurement costs are $400,000, does the provider get to collect $100,000 or $60,000?
Thanks in advance for your input.

-Oklahoma Attorney

Here is my understanding: The pro rata offset is applied to the full settlement amount, not the individual provider charge or “lien.” In other words, the providers may collect actual charges from the net proceeds to the client/beneficiary after the pro rata offset has been taken. In your scenario, the provider would be able to collect the actual charges of $100,000. It is important to note that the providers cannot seek or attempt to collect those charges until settlement has been made. Attempting collection prior to settlement is considered “billing the beneficiary” which is not allowed. Hope this helps…

My best,
Matt Garretson