01
Oct
10

Avoiding Conflicts Under the Medicare Secondary Payor Act, Part I

Do You Think I Am Made Of Money?

Last week, I discussed the recent cases of U.S. v. Harris and U.S. v. Stricker, two cases showing the new aggressiveness by the U.S. in its efforts to recover the “conditional” payments made by medicare.  Anyone settling any claim, from plaintiff’s attorney to paying defendants and insurance companies (and their attorneys by virture of potential claims by clients), must be aware of this law and its implications.  I promised to discuss how to avoid conflicts in such situations. 

This week, we will focus on the plaintiff’s attorney, and the inception of the litigation. 

1.  Begin with the client’s retention letter and fee agreement.  Include in any letter of engagement that reimbursement of Medicare medical payments will come from the client’s share of any recovery rather than from the attorney’s fee.  Include an explanation that the larger the Medicare reimbursement, the potentially smaller the total recovery for the client.  Ensure that by signing the agreement, the client is providing written consent that the attorney can and must pay Medicare’s claim from the recovery.

2.  Start early in the case dealing with this issue.  Determine as soon as possible whether Medicare benefits are involved in the case.  Is so, advise the client that the langauge in the retention letter and fee agreement apply and that Medicare reimbursement may affect final recovery.

3.  Segregate the payments made by Medicare form those made by other sources.  Do not let Medicare claim recovery for bills not paid by Medicare (and do not doubt that it may try).  This may require reviewing each bill.  This could be necessary in any event as other sources of payments are also becoming more aggressive in recovering medical payments to personal injury claimants (see a future post dealing with ERISA payments). 

4.  If you think any of this is a pain, read the opinion in Harris.  Then read it again.  Then read the complaint in Stricker.  Now, start again at No. 1 above.

Next week we will focus on what the plaintiff’s attorney should do during the litigation and at the time of settlement.  After that, we will look at the risks and suggestions for the corporate and insurance defense counsel.

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