A few years ago, we wrote about the evils of subrogation from health insurance contracts any impact on personal injury judgments and settlements. You can view that piece by clicking here. For our elderly clients, there is yet another obstacle in the battle to achieve justice and that is the Medicare lien. Indeed, the Medicare Secondary Payor statute (MSPS) presents perils for plaintiffs, defendants, attorneys, and insurance carriers.
The law authorizes Medicare to seek reimbursement of medical payments made on behalf of an individual who is injured and later obtains recovery from a third party. Plaintiff’s attorneys are responsible for sorting out when and whether Medicare must be reimbursed for those payments in any given case. Problems arise mainly in cases when a compromise settlement may leave the plaintiff little or nothing after paying expenses and the Medicare lien. The problem is multiplied by the fact that it is difficult to get the government to provide the amount of the lien. It is not unusual to take months and even years to get a final number from the Federal government on the Medicare lien.
Medicare liens are administered by Centers for Medicare & Medicaid Services (CMS). Formerly known as the Health Care Financing Administration (HCFA), CMS is the federal agency responsible for administering the Medicare, Medicaid, CHIP (Children’s Health Insurance), HIPAA (Health Insurance Portability and Accountability Act), CLIA (Clinical Laboratory Improvement Amendments), and several other health-related programs. As attorneys for elderly clients, we contact CMS early on in a case seeking the amount due. But the federal agency takes the position that it “cannot supply the amount due until settlement or judgment has been reached because until one of those results has come about, there is technically no primary payer and thus no debt owed.” On top of that, the agency requires a myriad of forms and releases to be executed by the attorney and client just to establish communication. Now that’s federal bureaucracy for you. And that bureaucracy is not only hindering resolution of cases, it causes plaintiff’s attorneys to shy away from cases and clients may involve Medicare.
An article which highlights the pitfalls associated with Medicare liens can be found by clicking here. As noted in the article, Medicare can be extremely slow to tell them what its share of the settlement should be, taking several months and as much as a year or more. That can prevent them from engaging in damage negotiations with the liable party’s insurer, or from reaching an agreement and distributing the money if they already have. The article portrays an agency which does not seem to care that they are preventing elderly clients from seeing the proceeds of their personal injury cases.
While it may seem fair for the government to seek recovery from cases, a more orderly procedure needs to be developed by the government for speedy resolution of claims and greater communication with lawyers for claimants. Until this orderly process put in place, elderly clients may go without legal representation, and may have to forgo seeking redress for their injuries altogether. That will result in an inability to seek justice on behalf of elderly clients, and will leave the Medicare system unreimbursed for costs paid. Let’s hope that any efforts at health care reform include revisions to these bureaucratic nightmares.