Plaintiff's Personal Injury Attorneys are Agonizing Over the New Medicare Reimbursement

The growing Medicare shortfall in Washington hasdoes not seem likely consider rejecting the case.
many politicians looking for ways to bridge the fundingHowever, Baby Boomers are increasing and may be a
gap. As a result a new law, effective July 1, 2009, hasgood part of an attorney's personal injury practice. It is
been enacted which requires liability insurers (whichestimated that in the next couple of years,
include carriers who write CGL policies, auto policies,approximately 25% of the Country's population will
homeowners' policies and those defendants who areconsist of baby boomers who are Medicare recipients.
self-insured such as supermarkets) to determine andIf the claimant has undergone limited treatment using
report whether a claimant is covered and is entitled toMedicare and needs additional treatment, consider
Medicare benefits. If the claimant received Medicareadvising the healthcare provider to bill plaintiff directly or
benefits during their treatment for the injury, Medicareconsider finding a doctor who will take the treatment
is holding out both hands to make sure they get 100%on a lien. This way a Medicare lien will be avoided or at
reimbursement, despite the comparative negligence ofleast a very minimal lien incurred. If liability is undisputed,
claimant.have the medical provider bill the insurance carrier
This new law will pose new challenges for plaintiff'sdirectly.
attorney, the insurance carrier for the defendant andWhat if the attorney has a case where Medicare has
the mediator who is attempting to resolve the claim. Ifa substantial lien? If it is before July 1, 2009, consider
the attorney or insurance carrier does not comply, theysettling the claim before that time. If you cannot, again
risk being sued by the Government for reimbursementadvise the client of the new Medicare Recovery Act
up to five years post-closure and monetary fines.and the reporting requirements.
What is the new law?If there is a settlement and Medicare does not know
On December 29, 2007, President George Bushabout it and mistakenly pays for services it has a right
signed into law the "Medicare Medical, and SCHIPto recover, it can go after the attorneys whose fees
Extension Act of 2007." The new legislation amendsare paid out of the settlement. Also the Medicare
the Medicare Secondary Payer Act (MSA) byrecipient can lose his or her benefits. Lawyers could be
establishing new reporting guidelines beginning July 1,exposed to malpractice claims for not handling a
2009. Under the new rules, all liability insurers, andclient's benefits properly. Insurers can be liable for
self-insurers will be required to determine whether anymonetary fines for failure to report. If a plaintiff loses
individual who files a claim against the insurer or anyhis Medicare benefits, the plaintiff may bring a legal
entity insured or covered by the insurer is entitled tomalpractice claim against the attorney and a bad faith
Medicare benefits. If so, the insurer must provideclaim against the insurer for not making sure Medicare
Medicare with that individual's identity and any otherbenefits were protected.
information that maybe required under the law. ThisAfter July 1, 2009, makes sure the claim is settled for
information must be furnished to Medicare within thean amount that will cover the Medicare lien. It may be
time specified by after the claim is resolved throughpossible to comp the lien, but do not count on it. In
settlement, judgment, award or other paymentmaking settlement demands, assume that you will pay
(regardless whether or not there has been anMedicare 100% reimbursement in what is paid out.
admission or determination of liability). If an insurer failsMake sure all charges refer to the injuries that your
to notify Medicare in accordance with these guidelines,client sustained. Medicare will not be speedy to resolve
a civil penalty of $1,000 per day will be charged perthese claims, so discuss with the client about holding
claimant. The new legislation clearly indicates a shift inthe amount in a trust account until the CMS lien is
policy which will result in the federal governmentresolved rather than disbursing the entire amount
monitoring general liability claims more closely. The finesowed to plaintiff.
represent a new enforcement push by Medicare toIt is unknown whether plaintiff's attorney will have to
hold attorneys and insurers liable.worry about set asides calculations for future medical
What does it mean for Plaintiff's Attorney?care and submit them to Medicare for approval.
Plaintiff's attorney will begin to take a closer look at theCurrently, there is no formal process of liability
case he or she accepts. The attorney should changesettlements for future medical care.
the client intake form to ask very comprehensiveFinally, negotiations with the liability insurance carrier will
health related questions, whether the client is entitled tobecome more difficult. They will demand information
Medicare, how long has he been on Medicare, whichabout your client, such as social security number, so
type of Medicare and whether the claimant has usedthat they can comply with the requirements and avoid
Medicare to obtain treatment for his/her injuries. Thefines. Also, even though Medicare may ignore the
client should be advised in detail about the newcomparative negligence issues, Insurance adjusters will
Medicare Recovery Act and that Medicare is lookingtake the position that despite Medicare's 100%
for 100% reimbursement, not taking into account ifreimbursement, it will not pay 100% of the medical bills.
there is any comparative negligence. The client shouldAn insurance carrier will not want to increase the cost
be told there is no hiding from Medicare because it willof a claim and stand firm on its position.
be notified upon a settlement or judgment and the lienThis new law will pose challenges for the plaintiff's
may take months if not years to resolve.attorney who is attempting to resolve the claim. The
Think twice before accepting a small personal injurykey is to be aware of the Medicare Reimbursement
case involving Medicare recipients where liability isAct, and to prepare the parties prior to a settlement of
disputed. A settlement amount will have to coverthe barriers that the Medicare Recovery Act may
Medicare charges up to 100%, attorney fees andpresent.
provide money for the plaintiff. If that type of recovery