GENERAL
- What if a beneficiary refuses to repay the Medicare claim?
- What if settlement proceeds have been disbursed before Medicare is aware of the reimbursement situation?
- If the case involves auto/liability insurance coverage from the client's personal insurance, is that coverage considered a third party payment?
- Should Medicare accept less for their claim when there are other claim holders?
- Can participating providers of service file a claim against the liability proceeds and not bill Medicare?
- Does a beneficiary have an obligation to repay Medicare even if their lawsuit or insurance claim is unsuccessful?
- What information can an attorney provide to Medicare to demonstrate the charges of a particular provider are not related to the accident or incident in question?
- In some instances, the medical condition was pre-existing when the accident or incident occurred. Why is Medicare entitled to reimbursement?
- When should an attorney send payment to Medicare for the amount due?
- Once a settlement is reached, why are attorneys required to send the settlement statement with the beneficiary before a demand letter can be sent?
- What is a procurement reduction (itemized costs)?
- What information is needed by Medicare to provide the reduced amount of Medicare reimbursement?
- What enforcement options does HCFA have if the debt is not repaid?
What if a beneficiary refuses to repay the Medicare claim?
HCFA could offset the claim through the beneficiary's Social Security benefits, which may result in the overpayment being deducted from monthly benefits to which your client may be entitled.
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Under Federal law, Medicare has the right to seek reimbursement from anyone receiving payment from the third party payer including the attorney.
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Yes, according to the definition of third party payer set forth in the Federal regulations, a third party payer is any insurance policy, plan, or program that is primary to Medicare.
Should Medicare accept less for their claim when there are other claim holders?
No, according to 42 USC 1395y (b)(2) Medicare is subrogated to the right of an individual or any other entity to payment, therefore Medicare must be repaid first.
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Yes, as long as the participating provider has not received a payment from Medicare, they can pursue their claim for total charges; however, if payment has been received by that provider of service, their claim should be amended to reflect only deductible, coinsurance, and non-covered charges. The provider cannot file a claim with both entities (Medicare and liability insurer) at the same time.
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Medicare requires no reimbursement unless there has been a recovery from an insurer or an at-fault individual. The amount which must be repaid to Medicare depends on a variety of circumstances, including the amount recovered, the source of the recovery and in some cases, the cost associated with obtaining the recovery.
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In some instances, attorneys can obtain letters from the service providers setting forth which charges are related. The burden remains on the attorney to accumulate the information needed to support the argument that charges are unrelated.
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Attorneys routinely argue that a conditional or overpayment should not be subject to reimbursement since it pre-existed the date of loss. When a beneficiary suffers an accident or incident that exacerbates a pre-existing condition, Medicare is entitled to be reimbursed for all treatment related to that medical condition. A settlement agreement, stipulation of the parties or other documents suggesting the charges are unrelated is not binding.
When should an attorney send payment to Medicare for the amount due?
Only after receiving the demand letter. Early payment of the debt often results in the wrong amount being sent, and additional work for the Medicare contractor. The demand letter states the payment must be made in 30 days to avoid interest.
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These documents are required in order to document the amount of the settlement or judgment; and the attorney fees and costs claimed by the attorney for the beneficiary. HCFA requires documentation necessary to compute the procurement reduction.
What is a procurement reduction (itemized costs)?
There is a reduction of the debt based on procurement costs in many instances. Medicare reduces the amount it is due in proportion to the attorney fees and allowable costs incurred in obtaining the settlement or judgment. The procurement reduction does not always apply, such as where PIP or Med Pay coverage has been received. The procurement reduction is not a negotiation. Rather, it is automatically applied when applicable. The attorney is required to send the settlement closing documents to support the procurement reduction.
What information is needed by Medicare to provide the reduced amount of Medicare reimbursement?
The attorney will need to send in writing a copy of the settlement information that should include attorney's fees and costs, settlement amounts, date of settlement before Medicare can provide the reduced reimbursement amount.
What enforcement options does HCFA have if the debt is not repaid?
Federal Law allows HCFA to make claim or institute suit for recovery against all individuals and entities involved. Although the beneficiary remains primarily responsible, claim may be made against others, including an attorney for the beneficiary, third party insurers that funded the settlement and/or the tort feasor. A release in favor of an insurer or its insured, or an agreement obtained by the attorney stating the debt is the responsibility of the beneficiary, does not preclude enforcement. There is also a procedure by which the amount due can be deducted from the monthly Social Security or Railroad Retirement payment otherwise due the beneficiary.
| Last Updated: | January 19, 2001 |