Tuesday, June 8, 2010

Medicare Reimbursement Settlements

When dealing with Medicare reimbursement in a liability claim, can the argument be made and does Medicare factor in disputed liability on the underlying case and also causation issues on damages as a means to reduce the amount which must be reimbursed? Also, if the client is doing poorly economically, will Medicare factor that in its final reimbursement amount?

Georgia Attorney

There are administrative remedies within the MSP Provisions that allow for either the compromise or waiver of Medicare's interest; however certain criteria must be met.


CMS is given authority to consider the compromise of Medicare's claim under the Federal Claims Collection Act (FCCA) at 31 USC, 3711 et seq. and 42 CFR 401.613. The Medicare Secondary Payer Recovery Contractor (MSPRC) is not permitted to compromise a claim. Compromise requests must be submitted in writing to the MSPRC, who will forward the request to the appropriate CMS Regional Office for requests of (<$100,000) or Central Office for requests of (> $100,000) for consideration.

A compromise decision made by CMS is final and is not subject to appeal. That being said, if you are not in agreement with the CMS compromised amount, you do not have to accept it and can pursue other options. One option would be to reach out to the person at the Regional Office who made the decision and discuss the case with them; many times this is beneficial in getting them to see things your way. Another option is to decline the offer and pursue a waiver thru the MSPRC.

A compromise can be requested before or after settlement. If the request is post-settlement, settlement information must be submitted in writing before your request will be processed.

CMS uses the following factors to determine if a compromise or suspension of a claim is warranted. Whether or not a compromise will be granted depends on a number of factors and each matter is considered on a case-by-case basis.

1.Inability to pay - the cost of collection does not justify the enforced collection of the full amount of the claim;
2.If there is an inability to pay within a reasonable time on the part of the individual against whom the claim is made; or
3.Chances of successful litigation are questionable, making it advisable to seek a compromised settlement.

To request a compromise, you must specify the amount you want Medicare to accept. Submit in writing the reason for the compromise and how you determined the amount to be repaid. A full reduction cannot be requested. All compromise requests must be in writing and submitted to the MSPRC who will then forward it on to the appropriate CMS Regional Office.


The authority to consider a Medicare beneficiary's request for waiver on behalf of CMS, under 1870(c) of the Social Security Act and guidelines can be found in 20 CFR 404.506-509. It can only be requested after settlement and final determination has been issued by Medicare.

The MSPRC has the authority to consider a waiver requests under 1870 © of the Social Security Act. Waivers can only be requested after settlement and final determination has been issued by the MSPRC. All waiver requests must be in submitted in writing along with a completed questionnaire SSA-632K form. This questionnaire requests information regarding the beneficiary's monthly income, expenses and assets as well as the reasons for requesting a full or partial waiver. It is recommended that along with the completed questionnaire that you provide the MSPRC with a compelling story of the facts of the case.

CMS may waive all or part of its recovery in any case where an overpayment under Title XVIII has been made with respect to a Medicare beneficiary who is: without fault AND when adjustment or recovery would either defeat the purpose of Title II or Title XVIII of the Act (repaying Medicare would create a financial hardship), OR be against equity and good conscience for the beneficiary to repay Medicare.

"Without Fault" Standard. To determine if a beneficiary is "without fault," the lead contractor will consider four factors. These are:

1.The amount of out-of-pocket medical expenses incurred by the beneficiary;
2.Whether the beneficiary's assets are insufficient to pay Medicare;
3.The beneficiary's assets, monthly income, and expenses; and
4.The age of the beneficiary and whether he or she has any physical or mental impairments.

If you are pursuing a waiver based on the fact that your client incurred accident related out-of-pocket medical expenses include as much documentation as possible to support your argument Proper documentation of out-of-pocket medical expenses must be submitted before they can be considered in the waiver request.

"Defeat the Purpose" Standard. To "defeat the purpose of the Social Security or Medicare programs" means that a recovery against a beneficiary will cause financial hardship by depriving the beneficiary of income required for ordinary and necessary living expenses. An example of financial hardship includes a case where the beneficiary has spent the settlement or insurance proceeds and the only remaining income from which the beneficiary could attempt to satisfy the Medicare claim is from money needed to pay for his or her basic monthly living expenses.

"Against Equity and Good Conscience" Standard. The "against equity and good conscience" test considers, but is not limited to, the following factors:
1.The degree to which the beneficiary did not contribute to causing the overpayment;
2.The degree to which Medicare contributed to causing the overpayment;
3.The degree to which repayment would cause undue hardship to the beneficiary; and
4.Whether the beneficiary would be unjustly enriched by granting a waiver or was harmed by relying on erroneous Medicare information

If you or your client does not agree with the waiver determination you can request a re-determination of the decision. The re-determination request must be made in writing within 120 days of the date of the waiver determination.

If you have any questions please don't hesitate to contact me.

My Best,
Mary Skinner