Medicare Liens
Brien Roche
Medicare Liens Are Not Really Liens
People who are over 65 may be entitled to Medicare. Likewise other people who are not over 65 may be receiving Medicare as part of Social Security Disability benefits. Whatever money Medicare pays out, it may have a right to get that money back. That applies where the treatment needed is a result of the fault of another. Sometimes that is referred to as a Medicare lien. Sometimes it is referred to as a Medicare super lien. There really is no lien. It is simply a right to be paid back.
U.S. law has created a system by which a person who injures you or his insurer or a no-fault or workers’ compensation carrier is considered the primary payor. Medicare becomes the secondary payor. As the secondary payor, they can demand that the primary payor make the payments. Instead what they do is they step in and make those payments where it appears that the primary payor is not going to do so. Those payments however are based upon the legal right that Medicare has to get that money back. That right is called a subrogation right.
Medicare Liens-Double Damages
If you, your attorney or anybody else involved in the process fails to honor that right, then they may be liable for double damages to the US.
As such it is important to recognize Medicare’s right and deal with Medicare.
If Medicare happens to give you bad info as to the extent of their lien you as the attorney may still be on the hook for the full amount of their claim. See https://www.justice.gov/usao-md/pr/maryland-law-firm-meyers-rodbell-rosenbaum-pa-agrees-pay-united-states-250000-settle. This matter involved a firm that DOJ said should have known the reported Medicare claim was too low. They paid the consequences.
Portal
The easiest way to deal with Medicare is through their online portal. You go to that portal and create an account. The account allows the client or the attorney to submit information. If there are bills paid by Medicare that should not have been paid as part of this injury, you can dispute that.
Dealing with the portal is relatively easy once you understand the format. The basic format is that you create an account in your name as an attorney or authorized representative. Once you have that account established, then you can go to specific client files that are maintained by Medicare. In order to get into those files you need to submit either your retainer agreement or a separate authorization signed by the client and also submit a consent form signed by the client allowing you to get into their medical information.
The protective shield that Medicare uses to make sure that only authorized people are getting this access is what they call “multi-factor authentication”. I use a voice call system where once I try to gain access to the client file, they call me and they give me a number over the phone that allows me to gain access. That is an added layer of security that Medicare has installed on the system because the phone call is only made to the number that you have authorized.
Once the case has been settled, then Medicare can tell you how much you need to pay back. This is typically in the form of a Conditional Payment Letter (CPL). A CPL should incorporate the Medicare Worksheet which calculates any reduction for attorneys’ fees, expenses and the overall amount of the settlement.
In general, Medicare will pay the same percentage of attorney’s fees and expenses as what the client has to pay. If those fees and expenses are more than 25% of the total recovery, there may be a need to submit a breakdown.
Some problems arise with settlements in regards to prescription drugs. The portal does not show the info about amounts paid for injury-related medicine. As a result it’s a bit unclear as to what your obligations are in that regard. As of the date of this posting, Medicare has not made any efforts to enforce subrogation under Part D which is the part dealing with drug benefits. Call, or contact us for a free consult.
Medicare Liens and Advantage Plans
Many people subscribe to Medicare Advantage plans. These are plans that are substitutes for Medicare. They are approved by Medicare. They provide the benefits under Parts A and B and may provide other benefits.
If the client has a Medicare Advantage plan, then you cannot rely upon the Medicare portal. The portal may show that the case is closed or that there is a zero balance. You may also receive a letter from Medicare saying that. That’s because you don’t owe Medicare any money for this injury claim. You may however owe the Medicare Advantage plan money.
These plans operate their own portals to recoup money.
There does exist a question as to whether or not they have a right of subrogation. That may especially apply in a state like Virginia which has an anti-subrogation law. In Virginia health insurance plans cannot subrogate. As a result there is a question as to whether or not these plans can recover any money. The question I believe is based upon the status/standing of these Medicare Advantage Organizations (MAO). In Humana v. Paris Blank LLP, 187 F.Supp. 3rd, 676 the court held a law firm liable for double-recovery for failure to pay the advantage plan. That case cited Potts v. Rawlings, 897 F.Supp. 2d, 185, 196-197 (S.D.N.Y. 2012) which touched on the issue of whether state anti-subrogation laws may be preempted by the MAO’s right of recovery. That court indicated that preemption does apply. In MSP v. United, 60 F.4th 1314 (11th Cir. 2023), the court seemed to create an exception as to preemption insofar as an MAO is concerned. The MAOs base their recovery on 42 C.F.R. § 422.108.F which says that they will exercise the same rights of recovery that CMS exercises.
I don’t think that squarely addresses the issue of whether or not a state anti-subrogation law is preempted vis a vis an MAO. Clearly it is as to CMS. The point to be made is that if confronted with a request for any substantial payment to an MAO, further research on their status/standing to preempt Virginia’s anti-subrogation law may be time well spent.
The two (2) issues that I believe have not been clearly answered by the case law are:
- Does an MAO have the same standing as CMS in terms of preempting state anti-subrogation laws?
- Is an MAO, unlike CMS, really just an insurance plan and therefore subject to state insurance laws since the USA typically defers to state law in regards to insurance issues.
Medi-Gap Plans
Aside from Medicare and/or Medicare Advantage plans, many people may have Medi-Gap plans. A Medi-Gap plan picks up with Medicare parts A and B do not cover and may also provide additional coverage. Those plans are just insurance plans and would be subject to Virginia’s anti-subrogation law.
Set Asides
In addition to paybacks, there may be a need for a Medicare set-aside. A set-aside is a fund of money created out of the settlement to cover the future payments that Medicare may have to make on behalf of the client. These set asides are required at this point only in workers’ comp cases.
Sometimes an insurance company will demand a set-aside in cases other than workers’ comp. As of September 2019 you are not required to agree to such. CMS however has indicated that it may be moving towards that. There are a number of companies that can help with set asides. One of them is Medivest. It can be found at medivest.com. Another company is Synergy. One contact there is Rod Santomauro, (202) 368-2520.
Although Medicare set asides are not required in liability claims, they are mentioned in the CMS Guidelines listed on their website. You should look at 42 U.S.C. 1395Y(b). CMS will not pay for injury-related expenses after a liability settlement if you don’t have a set aside. On the other hand, if you have a set aside and it runs out of money to pay for post-injury treatment, then CMS will pay the bills if it believes the set aside was adequate. In a workers’ comp case, CMS has set forth very specific guidelines. Unfortunately it has not done so in regards to liability claims.
Further factors
A few things to keep in mind in regards to set asides are:
- Some liability carriers are requiring letters from Medicare showing that there is no outstanding lien. The only legal obligation of the liability carrier is to report the claim. They have no other obligations and therefore no other rights.
- What will trigger Medicare’s interest in future treatment are the ICD codes. These codes are the diagnosis codes. They are used by the doctors. If the codes used for the injuries recur in the future, then Medicare may claim that future treatment is injury related. Where it is injury related there may be a battle as to whether Medicare will pay for it.
- If you believe there will not be future treatment, then it makes sense to try to get a letter from the treating doctor. The letter should say that the treatment for the injury related to the settlement has been completed and future medical items and/or services for that injury will not be required. Furthermore it should say as of the date of the settlement future medical treatment for this injury will not be required. With that letter in hand there is probably no need for a set aside in a liability case.
- With smaller liability claims under $25,000, if there has been no claim for future medicals, no award for such and likewise no basis for such, then there probably is no need for a set aside.
- The Medicare rules require that not only those people who are Medicare-eligible but that those who are reasonably expected to become Medicare-eligible have to comply with the rules. That reasonable expectation of going on Medicare occurs if the person is less than 30 months out from such Medicare eligibility.
- Although MSAs are not required now in liability claims, if Medicare has future exposure, it probably makes sense to do a Medicare set-aside even though Medicare is not involved in it. That way there is a fund of money established to protect Medicare and to protect you and the client.
Providers Refusing To Bill Medicare
Where this happens you need to refer them to Section 8.01-27.5. If they refuse to bill Medicare then they may lose their right to payment.
Seeking Legal Help For Medicare Liens
Some liability carriers take the position that they have to pay Medicare directly. That’s okay. If they do so, you need to make sure that the release expressly says that they will timely pay the lien, be responsible for any penalties associated with delays and that it confirms that the amount being paid is based upon the final demand letter and not the Conditional Payment Letter.
Call, or contact us for a free consult. Also for more information on personal injury see the other pages on this site. For more information about Medicare see the page on Wikipedia.