Reimbursements Made To Medicare

Question
Although we have notified/submitted forms to Medicare of a 3rd party claim, we have not received a response yet. Do we need to repay Medicare?

A Note: What is my obligation as an attorney and what are risks to client of not getting lien/subrogation claim opened and paid?

Pennsylvania Attorney

Answer
Yes. Reimbursement must be made to Medicare for any conditional payments they have made that are related to your client's injuries. Federal law allows CMS to make claim or institute suit for recovery against all individuals and entities involved. Although the beneficiary remains primarily responsible, claim may be made against others, including an attorney for the beneficiary, third party insurers that funded the settlement and/or the tort feasor.

A release in favor of an insurer or its insured, or an agreement obtained by the attorney stating the debt is the responsibility of the beneficiary, does not preclude enforcement. There is also a procedure by which Medicare has the authority to refer non-collectible debts over to the United States Department of Treasury for possible offset of a beneficiary's monthly Social Security or Railroad Retirement benefits.

Section 42 CFR 411.23 states that a beneficiary must cooperate in any action taken by the Centers for Medicare and Medicaid Services in recovering conditional payments. Failure to do so or not protecting the Medicare program during and after settlement negotiations may result in CMS taking action against the beneficiary to collect the mistaken payment.

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. Please refer to US v. Sosnowski, et. al. where judgment was entered against a beneficiary and his attorney for failing to reimburse Medicare after receiving settlement proceeds on a personal injury case.

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.

I hope this helps,
Mary Skinner