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Liability For Payments Received By A Client For Which Medicare Claims Reimbursement
Post on November 1st, 2009

Attorneys who represent claimants in personal injury actions need to keep in mind that if any medical treatment was paid for by Medicare, then Medicare has an interest in proceeds of a settlement, and in addition, has very broad claims for reimbursement of the same. The regulations implementing the government’s right of recovery state that the Center for Medicare Services (CMS) has “a right of action to recover its payments from any entity, including a beneficiary provider, supplier, physician, attorney, State agency or private insurer that has received a primary payment.” 42 C.F.R. Sec. 411.24(g).

In United States v. Harris, no. 5:08CV102 (U.S. Dist. Ct., N.D. Virginia), the government sought reimbursement of $11,367.78 from an attorney who settled a claim involving injury to his client. The attorney argued that since he had given the government notice of the settlement, he should not be liable for payment of the amount claimed. The District Court disagreed under the plain language of the federal regulation noted above in denying the motion to dismiss filed by the defendant-attorney.

Starting with settlements received in 2010, liability insurers have to report claims involving potential Medicare issues directly to the relevant government agency on a quarterly basis. Claims where such issues may be involved include those where a claimant is 65 years of age or older, or claimants who are receiving Social Security disability, or who have renal failure. Because the new reporting requirements may alert the CMS to claims that otherwise might have gone without review by the CMS, attorneys settling personal injury claims involving possible payment of expenses by Medicare should be particularly careful to be certain that any interest claimed by the government is considered and resolved.