Medicare Insurance Liens and Your Personal Injury Claim – Does Medicare Get Paid Back?

The short answer to the question in the title is “yes,” if you have a claim against a negligent party. By federal law, if Medicare pays medical expenses that arise from a personal injury for which a third person is to blame, Medicare is normally entitled to be repaid back a substantial sum of the benefits paid to the recipient (that are incurred due to the claim).

Medicare is fairly aggressive these days in writing letters to Medicare recipients inquiring as to whether there is a tort involved (a tort is a civil wrong caused by a third party). Medicare will write you, whether you have an attorney or not, asking about whether your expenses may arise from this type of situation.

The way that federal regulation is worded, the government does not get back 100 percent of the expenses that are paid and related to your claim, but at the time of settlement an arm of Medicare must obtain a settlement statement and compute the exact amount due.

I have had many injury clients upset with the bureaucracy involved in forwarding papers to Medicare’s Recovery Division because there are no set deadlines for Medicare to turn around requests for how much they must be repaid, as one example. It is for this reason that there is pending federal legislation, H.R. 4796, the Medicare Secondary Payer Enhancement Act supported by the American Association for Justice (AAJ) that would reverse the complete unchecked bureaucracy that results in months of waiting and delay in recoveries in civil injury cases while Medicare sits on requests for simple computation of a lien.

In what is a very strange case of "strange bedfellows" the U.S. Chamber of Commerce, which usually opposes civil justice legislation endorsed by the AAJ, actually supports an amendment to the Medicare regulations. Importantly, one of the key provisions of the new legislation would require Medicare to act on a demand for a statement of its lien claim within a set time. Some other inequities in the current law would be corrected.

The ultimate nightmare in dealing with Medicare is if an injured person may be incurring future medical expense that will arise after the date of a settlement. Right now, unless new legislation is enacted, there are absolutely no regulations that guide what exactly must be repaid to the government’s Medicare recovery agent. It’s a complete nightmare for injured persons and their injury attorneys, particularly those that may have definite future medical expenses that are contemplated at the time of settlement of a case. The delays are incredible and this is one reason that new legislation is necessary. Let’s hope that Congress acts to amend the current Medicare legislation. The point here is not to deny the U.S. government reimbursement, but the problems with the system must be fixed.

About the Editors: Shapiro, Cooper, Lewis & Appleton personal injury law firm (VA-NC law offices ) edits the injury law blogs Virginia Beach Injuryboard, Norfolk Injuryboard, and Northeast North Carolina Injuryboard as a pro bono service to consumers.