Does it Matter if my Client is a Medicare-Enrolled Beneficiary?

Do you have a client who is sixty-five or older?  Do you have a disabled client?  If so, you should determine whether the client is a Medicare-enrolled beneficiary.

Medicare beneficiaries who have claims against a tortfeasor with liability insurance or no fault insurance must initially contact the Centers for Medicare and Medicaid Services (CMS) and its Coordinator of Benefits Contractor (COBC) to report a case.  An attorney similarly has a duty to provide CMS with notice of a claim on behalf of his or her client.  The attorney does not have to obtain approval from a beneficiary to provide notice of a claim to CMS.

The purpose of providing CMS with notice of a claim is to prevent Medicare from bearing the burden of covering the cost of treatment caused and recovered from a tortfeasor.  The Medicare Secondary Payer (MSP) statute created reimbursement obligations in cases where a plaintiff receives medical treatment that is paid for by Medicare and later paid to the plaintiff as a part of a settlement or judgment.  According to the Medicare Secondary Payer Act (MSA), “Payment…may not be made…with respect to any item or service to the extent that …payment has been made or can reasonably be expected to be made under a workers’ compensation plan, an automobile or liability insurance plan or under a no fault insurance.”  42 U.S.C. § 1395y(b)(2).

There is significant risk for attorneys who fail to comply with the MSP.  The federal government can bring an action against any responsible party.  The paying party may have to pay double damages plus interest if it fails to comply.  CMS could also refuse to recognize the settlement.  Medicare may also refuse to provide a non-complying plaintiff with Medicare benefits in the future.

Attorneys have the additional obligation of considering whether any portion of a settlement or judgment will cover future medical expenses.  If so, Medicare’s interest must reasonably be taken into account and those funds should be used to pay for services that Medicare would otherwise cover.  In cases where there is a life care plan, loss of a limb, a severe burn, a traumatic brain injury, or other catastrophic injuries, an analysis of future medical treatment is particularly relevant.  Attorneys can consult with third party agencies specializing in MSP compliance tools to come up with a plan that protects them and their clients.  In general, monies from an MSP must be exhausted before Medicare payments apply.