And how to not have your settlement derailed

The Federal Government has created new affirmative duties for beneficiaries, insurers and lawyers to protect Medicare’s interest in liability and other cases. Starting October 1, 2010 insurers and self-insured must report all settlements, judgments and awards of individuals who are either over 65 or under 65 and have received Social Security disability benefits for at least 24 months and perhaps of others who have end stage renal disease. The purpose of the reporting is to allow Medicare to recover its payments for accident related services from the settlement or judgment. In January, 2011, insurers and self-insureds will be required to perform additional reporting. Failure to report is punishable by fine.

The statute can trap unwary parties, including plaintiffs, and everyone involved in settlement of claims must have a procedure in place to deal with the new laws. As a mediator, I am dedicated to helping my clients through the process so as to not allow the new regulations to stall settlements.

I have started to collect information from plaintiff attorneys, defense attorneys, self-insurers and insurers regarding how they will be implementing the new law. When the parties give me permission to publish their opinions on my website, I am doing so and have an article up at the present time by Gould and Lamb.

As lawyers representing Medicare eligible claimants or lawyers defending these claims, get and share information early and often. Cooperation is a key element to successfully dealing with Medicare contractors. Share information regarding the name, age, sex, address, SSN and Medicare number of claimants. Share with each other the bills, EOBs and records of treatment associated with the injury. When Medicare (or its contractor with whom you will deal) gains knowledge of a claim, it often includes in its “lien” payments it has made for care unrelated to the subject injury. Counsel can assist one another in teasing out unrelated payments. Where future medical payments are contemplated, the parties can work together to develop an amount which should be allocated to same.

The lawyers, with the mediator and clients, should draft language for the settlement agreement which demonstrates that Medicare conditional payments are being appropriately handled and that a certain amount is designated, or allocated, for future care if future care is part of the settlement proceeds. Medicare’s right of recovery will be reduced by fees and costs associated with procurement and can be waived in whole or in part due to many circumstances.

Medicare can recover from anyone who could have protected Medicare’s right so it is imperative that all concerned protect Medicare and each other when drafting a settlement.

For detailed information from Medicare’s recovery contractor, go to and click on "Tool Kit."

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