Auto Accident Claims with Medicare & Medicaid Bills

Many Georgia auto accident victims who have never dealt with the government programs involving Medicare and Medicaid mistakenly believe liens asserted by these two entities can be easily resolved. If you have experience with these two government entities then you know that resolution of Medicare and Medicaid liens can be very frustrating and time consuming.

MEDICAIDmedicare-insurance-atlanta-lawyer

Medicaid is a state run program that provides hospital and medical coverage for people with low income and minimal financial resources. Each state has its own rules about who is eligible and what is covered by Medicaid.

MEDICARE

Medicare is our country’s health insurance program for people 65 years of age or older. It also covers younger people who have disabilities. There are four parts to Medicare:

  • Part A – hospital insurance that helps pay for in-patient care;
  • Part B – pays for doctor services as well as other services and supplies;
  • Part C – Medicare Advantage, which works like a HMO or PPO, the individual chooses to get Parts A and B from one provider organization;
  • Part D – is the prescription drug coverage plan.

Where did Medicare come from?  Medicare was originally established in 1965 as a part of the Social Security Act. When a personal injury victim receives Medicare benefits as a result of their accident, Medicare has the legal right on any first-party or third-party insurance settlements. Medicare has the right of direct action under Federal law. They can sue the responsible party directly but they usually choose to piggy-back their recovery from personal injury lawyers seeking compensation for their clients.

Medicare liens take priority over other liens and attach to any settlement or judgment proceeds. If these liens are not handled properly, Medicare can later seek a recovery, not only from the injured victim, but also from the lawyer handling the case. Unlike other types of liens, notice is not required on Medicare liens as the injury lawyer has the burden to determine if a Medicare lien exists.  A Medicare lien notice may never be received prior to the settlement of the case but the client and attorney will still be responsible for the lien.

Under Medicare statutes, if the Medicare lien exceeds the amount of recovery, Medicare may recover the entire lien, excluding the lawyer’s fees and expenses; although the lien amount may be negotiated.

Medicare does have some authority to reduce or waive Medicare liens if it is in the best interests of the program, or if the likelihood of recovery does not warrant pursuit of the lien, or if enforcing a lien would lead to a significant financial hardship.  It is important that your personal injury lawyer contact the correct person at Medicare to properly handle any negotiation.

In dealing with any Medicare lien be forewarned that getting a response from Medicare takes time and will usually involve multiple phone calls and letters. Virtually every time you call Medicare, someone will tell you that they need another 45-90 days to respond to your request. You will probably speak to a different person each time you call.

Medicare does occasionally waive liens but the waiver application can tie up disbursement of settlement proceeds for a year or more.

Unfortunately, Medicare recipients, their lawyers and even the liability insurers who are paying the settlement, are all individually liable for reimbursing Medicare pursuant to Centers for Medicare & Medicaid Service.

These federal regulations can make insurance companies nervous when paying out money on claims where Medicare liens are involved.  Some insurance companies will insist on issuing a single settlement check payable to plaintiff, plaintiff’s lawyer and the United States of America.

Why does it take so long to resolve a Medicare lien?

It is not unusual for the entire Medicare lien resolution process to take six months or longer. The first step is to establish a case with Medicare’s Tort Recovery Department and to obtain a list of all medical expenses that were paid. This list will assist your attorney in determining which charges are related to a particular injury and accident.  A claimant can gain access to your Medicare Explanation of Benefit (EOB) throughmymedicare.gov.

Does Medicare pay attorney’s fees and costs associated with obtaining your settlement?

Medicare will off-set its lien by a proportionate share of necessary “procurement costs” incurred in obtaining the settlement. This procurement off-set is only applicable if you recover from a liable third-party by your attorney. If you receive payment from your own automobile, medical, or no-fault insured, this off-set will not apply.

What happens if you ignore the Medicare lien?

Once the final lien amount is agreed upon with Medicare, it must be paid within 60 days. If the demand is not paid then the matter will be referred to the U.S. Treasury Department for collection. The Treasury Department can request that your government Social Security checks will be off-set to pay back the lien.  If the claim is not paid then interest will charged and must be paid in addition to the original claim amount.

Final Thought.

The Federal law governs Medicare claims and Georgia law governs Medicaid claims. When a client receives a personal injury settlement, part of that settlement must be used to pay back medical expenses that were paid by Medicare/Medicaid. Many accident victims are not aware of their obligations under Medicare and Medicaid and the consequences can be substantial.  An experienced auto accident attorney will investigate whether or not Medicare or Medicaid lien exists.