A Primer on the Dreaded Medicare Lien
Consider this scenario: You are injured in an accident, and have sustained serious injuries. You go through the litigation process, and you are presented with a settlement offer which your attorneys recommend you accept. You discuss the matter thoroughly with your legal team, and choose to accept their advice; the offer seems fair under all the circumstances of your case. You are glad that the case is resolved.
But hold on. Since your medical bills have been paid by Medicare, you find out that Medicare has a “lien” on your case for the medical bills it has paid. The same scenario might exist if you were injured in the course of your employment, and your medical bills were paid by a worker’s compensation insurance policy; if you are a Medicaid beneficiary; or even if you have a private medical insurance plan. Settlement of a personal injury case involves not just an analysis of what a case might be worth, but also the resolution of liens on the case. After all, while the amount of the settlement is obviously important, any rational client will want to know the net amount which they will receive after everyone else is paid.
The entity which pays medical bills will often claim a lien on the recovery for the amount that it paid. The question is whether the amount of that lien can be reduced, or even completely eliminated.
Medicare Lien Resolution in Personal Injury Cases
The White Plains accident lawyers at Worby Vecchio Edelman LLP are knowledgeable about all aspects of lien resolution in personal injury cases. We have a full time Legal Assistant who tracks liens, and assists the attorneys in the often frustrating process of lien resolution. This month we’ll cover the issue of Medicare lien resolution, with other types of liens, such as Worker’s Compensation, Medicaid, health insurance, and Crime Victim’s Compensation Board liens saved for the coming months.
Here are the basics of Medicare lien resolution: Medicare has the right to be paid back for all medical bills it has paid for treatment of the injuries you sustained in the accident. The attorneys at Worby Vecchio Edelman LLP get out in front of this process; we don’t wait until the time of case settlement to report the case to Medicare. Instead, we report to Medicare all cases involving Medicare recipients when we open the file, which makes it possible to track the lien as the case moves forward.
The case must be reported to Medicare because in virtually all instances, a Defendant’s insurance company will refuse to settle a case unless the Medicare lien has been fully resolved. Medicare is required by Federal law to collect the amount that it has paid in accident related medical expenses, but that same law requires it to deduct your “procurement” expenses. What that means is that Medicare is required to deduct the percentage of legal fees and attorney expenses that you have paid. In a typical situation, that percentage is approximately 33% to 35%. As an example, if the amount of your Medicare lien is $10,000 with 35% procurement costs, you would only have to pay Medicare back 65%, or $6,500. The theory behind this reduction is that had you not brought the claim in the first instance, Medicare would not have been entitled to any reimbursement at all.
Insurance companies are extremely strict on this issue, because if a Claimant fails to pay the lien, Medicare is entitled to look to the Defendant’s insurance company for payment, since an insurance company is a “Responsible Reporting Entity”. Because of that designation, most insurance companies will include Hold Harmless language in the papers that a Plaintiff signs to settle a case.
Successful Lien Resolution
Here at Worby Vecchio Edelman LLP we are very careful to ensure that the lien claimed by Medicare is comprised of expenses that are directly attributable to the accident. If a Medicare beneficiary with an accident-related leg fracture is under treatment with, for example, a cardiologist, charges for that treatment may wind up as part of the Medicare lien. We pore through the list of expense to be sure that Medicare eliminates expenses not related to treatment for the accident, so that our clients pay back Medicare for accident-related medical expenses only.
Successful lien resolution requires a firm which pays close attention to the intricate details. We have the expertise to assist you in the simple case, and the complicated case. You don’t want to be surprised after the settlement with the unpleasant news that your net settlement is significantly less than you thought. The White Plains accident attorneys at Worby Vecchio Edelman LLP will take full charge of all aspects of your case, and we’ll make sure that your lien is fully resolved at the time of settlement.