The interplay of Medicare/Medicaid liens and personal injury settlements

April 11, 2013

Most people have never heard of a Medicare or Medicaid lien. They have no idea what the term even means. For the layperson, a Medicare/Medicaid lien is one that is issued by the government for repayment of expenses paid for medical care of a plaintiff in a personal injury lawsuit (or anyone involved in a claim negotiation with a third party insurer). Under federal law, if Medicare or Medicaid has paid for medical care for an eligible patient and that patient later settles a related personal injury lawsuit, Medicare or Medicaid must be paid back. Similar statutes and case law exist to assure reimbursement for health insurance providers as well.

Sound clear? If you answered no, then you are definitely not alone. Medicare and Medicaid liens have baffled personal injury attorneys, juries and judges around the country even as laws have been passed that should have clarified the process. The most recent federal laws, the "Medicare Secondary Payer Act" and the "Medicare, Medicaid and SCHIP Extension Act of 2007," should have clearly delineated that:
- Medicare or Medicaid have the right to repayment/reimbursement for medical expenses paid for medical care related to the subject of a lawsuit or defendant insurance claim
- Medicare or Medicaid should be notified (in writing to the federal Centers for Medicare and Medicaid Services) whether or not there is another insurer/program that will accept primary responsibility for payment of medical expenses for a particular incident or injury
- Health insurance providers (or the medical benefits coverage of automobile insurance policies) have a right to subrogation of their expenses from the proceeds of a personal injury settlement or lawsuit

Essentially, Medicare and Medicaid want the right to be paid back if a plaintiff receives a sizable recovery in a settlement or lawsuit. Theoretically, that is a sound idea, one that will lessen the government's financial burden and also won't grant plaintiffs a "windfall." Practically, however, the burden on plaintiffs is onerous and can even result in settlement negotiations falling apart, simply because proof cannot be obtained in a timely fashion that there are (or will be) no liens filed by insurance providers or Medicare/Medicaid that could leave the defendants (or their insurers) on the hook for more payments down the road.

An experienced personal injury attorney will be able to tell you if your particular injury or claim could involve a Medicare/Medicaid lien or a subrogation claim from a private insurer. A skilled lawyer will also know the best course of action to satisfy federal reporting requirements and cut through the red tape as quickly as possible in order to help you reach a settlement or verdict in a timely manner.

Article provided by Schonberg Law Offices of the Hudson Valley, P.C.
Visit us at www.schonberglaw.com