Do I Have to Pay Back Medicare if I’m Injured?
In the case of an injury requiring medical attention, the medical and treatment costs for those on Medicare will be paid Medicare. But what happens if the injury is caused by someone else, and the person injured receives a settlement or jury verdict for the injury – does the injured person need to pay back Medicare for all (or a portion of) the treatment costs that Medicare has paid?
The short answer is that if Medicare pays for hospital and medical treatment, Medicare will have a lien (or right to collect for reimbursement) against any amounts that you may receive from those who may be responsible for your injuries. This article addresses a number of issues concerning Medicare lien rights and related frequently-asked questions.
What is a Medicare Lien?
If you’re injured by someone else and you incur medical expenses that are paid by Medicare, Medicare will have a lien on any amounts paid by the person or company responsible for causing injury or their insurance company. In essence, Medicare (in other words, the government) wants to be repaid for the medical and care costs that it has paid. This isn’t a lien against you or your personal property; it’s against any settlement you receive.
While you may naturally not be thrilled about a portion of a settlement or jury verdict being paid to Medicare, it is certainly understandable as to why the government wants to be repaid. The argument for Medicare reimbursement is straight-forward – part of the money being paid in a settlement or jury verdict represents damages for medical expenses and treatment costs, and the entity initially paying for such expenses deserves to be repaid.
Who Administers Medicare Liens?
The Centers for Medicare & Medicaid Services (“CMS”) is responsible for both claims management and asserting Medicaid liens. CMS is a part of the U.S. Department of Health and Human Services.
What Amount Are Subject to a Medicare Lien?
Medicare liens are only applicable to proceeds recovered from a personal injury settlement or jury award relating to the injuries for which Medicare costs were incurred. As an example, if the medical expenses paid by Medicare for your injuries were $100,000 and you only received $50,000 in a settlement, Medicare would only be entitled to reimbursement out of the $50,000 settlement.
Can Medicare Assert a Lien Against My House or Other Assets?
No. Because Medicare liens are only applicable against settlement or verdict proceeds, Medicare cannot assert a lien against your house or any other asset that you own, even if these proceeds are insufficient to pay the full amount of the lien. If Medicare does not receive the full amount of what it paid in medical costs, the remainder of the lien is forgiven.
What are “Procurement Costs”?
Medicare understands that if you have been injured by someone else, and that other person (or their insurance company) paid you money as the result of you obtaining legal counsel, that payment (either a settlement or jury verdict) did not come for free. Legal counsel must be compensated for their time, and costs are typically incurred as the result of bringing the case. These legal fees and expenses are referred to as “procurement costs” – they must be incurred in order to obtain a settlement or jury verdict.
Typically, Medicare will agree to subtracting at least a portion of these procurement costs from their lien, but this matter must be negotiated with Medicare.
What About Other Providers Who May Have a Lien?
There is the possibility that other medical providers may also have a lien if their fees are not covered by Medicare. Medicare, however, will have a first position priority with respect to the disbursement of settlement or verdict proceeds, meaning that they will be paid before other lienholders.
Can I Get My Medicare Lien Reduced?
Maybe.
As noted above, Medicare will often agree to reduce a lien to take into account procurement costs. There are specific procedures that must be followed in order to file what is known as a “compromise request”, which is a request to Medicare to reduce the amount of a lien. In addition to the Compromise Request, Medicare also allows for the submission of a lien waiver, which is a request that Medicare forgo its right to reimbursement.
In What Situations Might Medicare Agree to a Waiver?
Medicare will normally want to be paid back for most or all of the expenses that it has paid. However, in some extreme conditions Medicare may be willing to waive its lien.
As an example, Medicare may look at the financial hardship that may be imposed by paying back the lien, as well as other medical expenses that may need to be paid that are not covered by Medicare. Other extenuating circumstances may also be considered.
Understanding The Lien That Will Apply to Your Case
As part of the process of negotiating a settlement, it’s critical to understand the amount that you are likely to receive after taking into account attorneys’ fees and Medicare and other liens. As experienced injury lawyers, we work with clients to carefully explain the amounts they are likely to receive from a settlement so that they can make an informed decision as to whether a given settlement provides fair compensation for their injuries and damages. We also discuss what actions we can take in seeking to reduce the amount of any Medicare lien so that clients will keep more of a settlement.