Draconian Penalties When Settling Personal Injury and Worker Compensation Claims Without Repaying Medicare Conditional Payments, Friedman Law

Medicare secondary payer law (42 U.S.C. §1395y(b) et seq,) provides that Medicare shall not fund care for which another entity or person is liable such as injuries due to auto accident, negligence, or work place mishap.  Where a potentially responsible party (PRP) denies liability, Medicare may make conditional payments for medical care.  However, Medicare secondary payer law requires personal injury lawyers to apply settlements and other recoveries to repay Medicare conditional payments before paying plaintiffs.

Where Medicare conditional payments are not timely repaid as required by Medicare secondary payer law, Medicare can charge interest at high interest rates, obtain double damages, and even seek criminal penalties.  Nevertheless, some personal injury and worker compensation lawyers have given their injured plaintiff clients (rather than Medicare) PRP settlement payments that should have repaid Medicare conditional payments in accordance with Medicare secondary payer law.

The failure of some lawyers to satisfy Medicare secondary payer law obligations has led Medicare to sue to recover Medicare conditional payments.  While Medicare may limit claims to Medicare conditional payments in some cases. Medicare has aggressively pursued claims against attorneys who may be flouting Medicare secondary payer law.

Incidentally, Medicare secondary payer law requires plaintiffs to apply at least part of a personal injury or worker compensation recovery to fund accident related care before asking Medicare to cover such costs.  It also is important to keep in mind that Medicaid also may be entitled to repayment on settling a personal injury or worker compensation claim.

In the last few years, Medicare has collected substantial amounts from lawyers and their clients where Medicare conditional payments were not timely repaid as required by Medicare secondary payer law.  Last March a Baltimore personal injury firm agreed to pay Medicare $250,000 for ignoring its Medicare secondary payer law obligations to repay Medicare conditional payments from personal injury settlements.  Just a few days ago, another law firm agreed to pay Medicare over $90,000 for failing to repay Medicare conditional payments when personal injury claims settled.

What is the take away?

As a lawyer,  you can face substantial penalties if you don’t honor your Medicare secondary payer law obligations to repay Medicare conditional payments and Medicaid claims when settling personal injury or worker compensation claims.

As a plaintiff you too can face claims by Medicare and Medicaid if you don’t make sure your lawyer repays Medicaid and Medicare conditional payments when disbursing your settlement.

For many years, FriedmanLaw has worked with law firms and individuals to ascertain and resolve Medicare and Medicaid repayment claims.  We hope to add you to our roster of satisfied clients!  Additional information appears in our May 19, 2016 blog post Medicare Claims and our July 6, 2015 post Medicare Set Aside Trusts.