Monday, March 15, 2010

CMS Right Of Action To Assert A Claim

Does Medicare presently have the power to assert a claim against a tortfeasor and / or its liability carrier? The tortfeasor settled a BI claim with a liability carrier. Now they want to withhold payment until the Medicare lien is resolved. I am concerned about its exposure. Should we disburse funds without resolving the Medicare lien, which we have no intention of doing given our and our client's exposure? I was under the impression that the tortfeasor / liability carrier had no exposure to Medicare until July 1, 2010. Am I incorrect in this assumption?

Georgia Attorney

Yes, CMS has a direct right of action to recover its payments from any entity, including a beneficiary, provider, supplier, physician, attorney, State agency, or a private insurer that has received a third party payment, 42 CFR 411.24.

We have seen an increase in the number of liability carriers that want documentation from the plaintiff that Medicare's interest is being protected. It has always been that in the event that reimbursement is not made to Medicare as required by 42 USC 1395y(b)(2)(B)(I), action may be brought against any entity responsible for payment (and may collect double damages from insurance companies), or any entity that has received a third-party settlement. Under 42 CFR 411.24(g), this includes attorneys whose fees are paid from settlement proceeds.

The tortfeasor / carrier always had exposure, however since the MMSEA act the defense seemed to have been awakened to the fact that they can be held liable if Medicare is not reimbursed.

CMS has recently issued an extension of the first reporting date from April 1, 2010 to January 1, 2011. Any settlements made on or after October 1, 2010 will be reportable.

Mary Skinner