Monday, March 8, 2010

Medicare Liens

Thank you for your blog re Medicare liens. I hope I am reading 411.37 wrong. We have a client that has over $100,000.00 in Medicare bills. If we settle for the limits of $50,000.00, then we can only get procurement costs and the balance goes to Medicare? Would there be any money left for the plaintiff? Please tell me that I am reading this section wrong!

California Attorney

Unfortunately, you are not reading it incorrectly. If Medicare payments equal or exceed the amount of the liability insurance payment, judgment or settlement amount, then Medicare recovers the total amount of the settlement minus procurement costs.

Having said that, there are remedies with the MSP provisions that would allow for reduction of Medicare's reimbursement and enable the client to put some money in their pocket.


A waiver can be considered based on Section 1870 (c) of the Social Security Act and 42 CFR 404.501-404.515. A waiver can be requested based on financial hardship due to the accident, or based on equity and good conscience. The request must be made in writing to the lead Medicare contractor only after settlement has been reached.

A waiver may only be considered after settlement has been finalized and proof of settlement has been forwarded to the MSPRC. If the beneficiary is deceased, a waiver can only be requested by a surviving spouse or a legal dependent entitled to benefits under Title II or Title XVIII of the Social Security Act. It should be noted that prompt repayment to Medicare will avoid accruing interest charges. You will retain your right to dispute, appeal, or request waiver of the debt.


A compromise can be considered based on Federal Claims Collection Act and 42 CFR 401.613.

1. Litigative risk
2. Inability to pay
3. Cost to collect Medicare's claim will exceed amount of recovery

A compromise can be requested before or after settlement. The beneficiary, spouse, immediate family member, or attorney may request a compromise. If the request is post-settlement, settlement information must be submitted in writing before your request will be processed.

I hope this helps.
Mary Skinner