Historically when a settlement involving a client with medicare occurred, the plaintiff’s attorney would negotiate the amount of the payback due medicare. It took months of haggling with a bureaucrat about whether the bills paid by Medicare were related to the injury settlement. The process may have recently become much more complex and harder to navigate..
Since January 1, 2010 a new law has gone into effect. The law is intended to make sure Medicare is the payer of last resort, and that medicare gets paid off the top, if it has been billed for accident related medicals. The new reporting requirements, passed as part of the Medicare, Medicaid and SCHIP Extension Act of 2007, require insurance companies to provide information on settlements, including the name, address and phone number of the plaintiff and his or her attorney.
There are a lot of questions to be answered by this legislation. What about future medicare payments for treatment of accident related injuries? What about the client who was not a medicare patient when the settlement occurred, but will be entering Medicare later on? There is a good overview of this issue in the Wisconsin law Journal here. In the interview, plaintiff’s attorney Robert Janssen is quoted as saying:
“The prudent course of action is to keep Medicare’s interest protected by creating a bank account for accident related, future medical bills that would typically be paid by Medicare,” said Janssen. “This would be the case even though no formal Medicare set-aside is in place.”
I think plaintiffs attorneys representing medicare clients and those who are likely to start getting Medicare benefits before the case is settled ought to provide the insurance adjusters with a heads up as soon as possible so they can timely notify Medicare of the pending action. Or, Plaintiff’s counsel can do it just to make sure it is done.
We sure don’t want to get a case settled and then belatedly find out Medicare has not been notified yet. Based on this article, the client’s rights to future medicare may be cut off unless this is handled properly, and that would be a nightmare for them and the attorney who handled their claim.