Uncle Sam Seeks Repayment Under Medicare Secondary Payer Act

How Come I Don't See "Sue Plaintiff's Lawyer And Insurance Company" On This Chart?

The Medicare Secondary Payer Act went into effect in 2009 and greatly increased the liability exposure for settling defendants/insurers and claimant’s attorneys if the claimant had medical expenses related to the claim paid by Medicare. While the scope and interpretation of this law is beyond this post, what is clear is the U. S. is already aggressively using the law to get its money back from plaintiff’s attorneys and settling defendants.  

In U. S. v. Harris, (2009 WL 891931 N.D.W.V.), a lawyer was required to repay Medicare over $11,000 plus interest because conditional Medicare payments to his client were not paid at the time of the settlement.  Harris is a good place to start to get familiar with the law as the court’s order granting summary judgment against the attorney clearly explains an attorney’s exposure for when a client’s Medicare payments are not repaid, including statutory and regulatory citations.  

Recently, the U.S. filed a civil action called U.S. v. Stricker to recover over $67,000,000 in conditional payments that were made to approximately 907 Medicare beneficiaries involved in a $300,000,000 class action liability lawsuit named the Abernathy Settlement.  Defendants include the Medicare beneficiaries’ attorneys and the payors of the settlement proceeds, including numerous well-known insurance companies and several large corporate defendants.  The complaint alleges that 42 CFR §411.24(i) allows Medicare to seek payment from the liability insurance carrier regardless of whether payment has already been made to the Medicare beneficiary. The US is seeking reimbursement of these funds along with double damages plus interest.  The U.S.’s motion for summary judgment is pending.  

Next week I will include some general tips on how to avoid liability and client disputes with respect to this issue.


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