Settlements Involving Medicare Beneficiaries

Question
I settled a medical malpractice case involving a Medicare recipient. No claim has been received from Medicare. The insurance company wants to withhold part of the payment until I clear with Medicare. I understand that the only settlements after Oct. 1, 2010 are to be reported. Is this settlement still subject to a lien?

Puerto Rico Attorney

Answer
Yes, any settlement that involves a Medicare beneficiary must be reported and Medicare's interest protected and reimbursement made for any conditional claims they have made for injury related care.

Under the MSP laws (42 U.S.C. § 1395y(b)), Medicare does not pay for items or services to the extent that payment has been, or may reasonably be expected to be, made through a no-fault or liability insurer or through Workers' Compensation (WC). Medicare may make a conditional payment when there is evidence that the primary plan does not pay promptly, conditioned upon reimbursement when the primary plan does pay. Once the MSPRC has information concerning a potential recovery situation, it will identify the affected claims and begin recovery activities. Insurers/WC carriers (as applicable), beneficiaries, and representatives/attorney(s) are required to recognize the obligation to reimburse Medicare during any settlement negotiations.

The first step in the process of reporting the case to Medicare is to contact the Coordination of Benefits Contractor (COBC) at 1-800-999-1118.

The COB will then establish the record and forward it to the Medicare Secondary Payer Recovery Contractor (MSPRC). Once the case has been established you must send the MSPRC proper proof of representation in order for the MSPRC to release information regarding conditional payments for injury related care they may have made.

Medicare's recovery claim runs from the "date of incident" through the date of settlement/judgment/award. Medicare has both a direct priority right of recovery and subrogation rights based upon Federal law; Medicare's recovery claim is superior to the recovery claims of any other entities.

The reporting of settlements after October 1, 2010 is concerning Medicare, Medicaid and SCHIP Extension Act of 2007, or the MMSEA. The MMSEA statute (42 USC 1395y(b)(8)), the insurance company may have to report certain information to Medicare once a claim is settled. That reporting obligation arises in those cases where the injured individual is a current Medicare beneficiary at the time of settlement. The insurance company, generally referred to as a Responsible Reporting Entity or RRE, faces a $1,000 per day per claimant penalty under the statute if they are found to be out of compliance.

Regards,
Mary Skinner