Frank C. Kilcoyne, CSSC

Medicare Liens in Personal Injury Cases

Over the past few years, we have devoted a lot of ink to the issue of how to handle compensation for future medical care as it relates to the Medicare Secondary Payer statute.

Time out. This month, let’s revisit how attorneys should be handling reimbursement for past Medicare-funded expenses. After all, these sums can be significant and the consequences of mishandling them just as harsh.

It’s fun to write about the issue of future medicals and Medicare because that’s an area of law which is unsettled; people read tea leaves and like to make pronouncements. Yet it remains, essentially, an unanswerable question at present. There is no definitive procedure or guidance. The reverse is true for past medicals. Let’s review:

It’s easy to skip over non-controversial procedures governed by established law because they can be a bit of a bore, but handling these aspects of settlement is critically important. You can either: a) save yourself massive headaches or b) create fresh new migraines, depending on whether you handle these things smart or…unsmart.

As it relates to past medicals, we are essentially talking about an advance made in good faith. When a Medicare-qualified individual is injured, potentially due to another party’s negligence, Medicare will go ahead and pay for covered care. However…if it turns out later that that other party was responsible for these injuries and funds were recovered from that party, Medicare is entitled to reimbursement. They call these payments “conditional” payments because Medicare is considered to have paid for the care on the condition that if the injured person recovers against a liable third party, Medicare will get their money back.

So, logically, the first thing that needs to happen is to determine whether the injured party is or was eligible for Medicare coverage and then determine whether Medicare did in fact pay for care. And not just any care, but for purposes of reimbursement, it must be care related to the injury for which the other party was liable.

This makes it imperative that you determine if Medicare has in any way been involved in the care of your claimant. If they have, then you must run, not walk, to send in your initial notification to Medicare, because their response times can be glacial. In time, you will receive a “Rights and Responsibilities” letter from the Medicare Secondary Payor Recovery Center (MSPRC); this letter outlines the conditional payment resolution process for you.

After you provide the required information, MSPRC will conduct a search for claims paid in relation to the case at hand and, within 65 days, issue a “Conditional Payments Letter” and a payment summary form which documents their claim for reimbursement. Do not accept this claim as gospel or final. You must conduct your own investigation of the care provided and costs incurred to determine if Medicare’s listed claims are accurate. Were there any overpayments? Are the payments causally-related to the personal injury at hand? You may need to hire an expert to properly audit the payment summary form. Once your investigation is complete, if you discover any erroneous charges, you must send a letter back to MSPRC asking them to remove those unrelated or mis-billed charges, including a copy of the itemization with the bad claims crossed out. Within 60 days, MSPRC will advise you if they agree or disagree with your challenges.

It is important to stay on top of this process. Remember that it is you who is most interested in resolving the lien in a timely manner, not the MSPRC (they have plenty more where yours came from). Fortunately, you can attend to some of this yourself: they have developed a web-based tool designed to assist in the resolution of liability insurance, no-fault insurance, and workers' compensation Medicare recovery cases. The Medicare Secondary Payor Recovery Portal (MSPRP).(1) This website gives you the ability to access and update certain case-specific information online. The site also provides a curriculum of downloadable computer-based training courses designed to help you work with the MSPRP.

If you are able to negotiate settlement on your case, notify MSPRC immediately and be thorough. It can take as long as a month to get a Final Demand Amount from them and any missing information only causes delays.

The issue of Conditional Payments is not limited only to Medicare and the MSPRC. Were any medical payments made by a Medicare Advantage Part C Plan? Legal rights to recovery extend to these plans as well.(2) Conditional payments made under Medicare Part C will not appear on an MSPRC conditional payment investigation or demand. You must determine the existence of this kind of lien directly with the provider of that Part C plan. To complicate things further, a beneficiary’s Medicare coverage is subject to change on an annual basis, and the Part C component may be interspersed among different providers, making identification of potential Part C conditional payments extremely tricky to verify.

Why am I writing about this issue? There is no clever segue from this subject into how structured settlements will make your life easier. I simply always want my clients to have the most up-to-date industry information available. My clients need a firm understanding on Medicare issues, especially those which are clearly defined and understandable. If Medicare is anywhere near your case, please follow the steps I have outlined above. In the end, you will be happy you did.

Working on a complicated case? Think you could benefit from the combined knowledge of a full team of experts? Call Frank C. Kilcoyne CSSC at 800-544-5533, I am here to help.


(1) https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Coordination-of-Benefits-and-Recovery-Overview/MSPRP/Medicare-Secondary-Payer-Recovery-Portal.html
(2) In re: Avandia Mktg., 685 F.3d 353 (3d Cir. 2012), cert. denied GlaxoSmithKline v. Humana Medical Plans, Inc., No. 12-690, 569 U.S. ___ (Apr. 15, 2013).