Enforcement of Medicare Payments

Bruce Burk

Sarasota, FL (WorkersCompensation.com) – Medicare is always on the minds of those who work in the workers’ compensation field. If an injured worker is a Medicare recipient, that fact can have a large impact on the settlement of the case.

As a result, all entities involved in workers’ compensation are mindful of the fact that federal law requires the parties to protect Medicare’s interest when the program has been used to pay for treatment or could be used to pay for treatment for the industrial accident.

A new story reminds us of the problems in failing to adequately protect Medicare’s interest. The Maryland law firm of Meyers, Rodbell & Rosenbaum has reached a settlement with federal authorities to pay $250,000 as a result of failing to reimburse Medicare for treatment to an injured worker. This was in connection with a medical malpractice case from December of 2015.
42 CFR § 411.46 states, “If a lump-sum compensation award stipulates that the amount paid is intended to compensate the individual for all future medical expenses required because of the work-related injury or disease, Medicare payments for such services are excluded until medical expenses related to the injury or disease equal the amount of the lump-sum payment.”
42 U.S.C. § 1395y(b)(2)(A) states that payment under this subchapter may not be made . . . with respect to any item or service to the extent that, “(ii) payment has been made, or can reasonably be expected to be made under a workmen’s compensation law or plan of the United States or a State or under an automobile or liability insurance policy or plan (including a self?insured plan) or under no fault insurance.”

This law firm obtained a $1.15 million dollar settlement for a client and then, according to the government, failed to reimburse Medicare for the payment. What many in the legal field paid attention to is a statement made from the U.S. Attorney’s office saying that attorneys are in the best position to ensure that conditional payments owed to Medicare are repaid.

As a reminder, conditional payments represent amounts owed to Medicare for amounts the program has paid to cover medical bills for the injured worker. The point made by the federal authorities is that it is not just the insurance companies or the injured worker who can be on the hook for money owed to Medicare, but the attorneys who represent the parties can also have to pick up the tab.

No, it is not the norm for the U.S. Attorney’s office to go after the law firms involved in a Medicare-related settlement. However, when it does happen, it is a stark reminder of the care needed to protect Medicare’s interest in a workers’ compensation settlement.

Law firms and carriers typically deal with the Centers for Medicare and Medicaid Services in order to comply with Medicare’s requirements. The parties will typically obtain a Medicare Set Aside which outlines the injured workers’ future medical costs. The MSA is then submitted to CMS for approval. Then, the settlement must create a pool of funds to protect Medicare’s interest and cover any costs that Medicare would have to pay out.

In this case, some have said that CMS needs to provide clearer guidelines when lien amounts are changed, which happened in this case. MSAs are needed if the case is settled for an amount greater than $25,000. However, the guidelines also say that Medicare’s interests needs to be protected regardless of the amount the case settles for.

This story is a reminder to all parties on both sides to familiarize yourself with the CMS guidelines regarding MSA requirements and how to deal with conditional payment letters received from CMS.

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