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Personal Injury Lawyers Should Take Medicare Liens Seriously

There was a time when few personal injury lawyers gave a moments thought to satisfying liens when wrapping up personal injury cases. Medicare liens, most especially.

Woe is the fate of the personal injury lawyer who operates that way today.

Medicare is a federal program that provides medical insurance to qualified elderly and disabled persons. However, with regard to medical expenses for which a third party (e.g., tortfeasor) bears responsibility, it is a secondary payer. 42 U.S.C. § 1395y(b)(2). While Medicare will cover medical expenses in personal injury cases, it has the legal right to be reimbursed from the proceeds of third party payments.

42 U.S.C. §1395y(b)(2)(B)(ii) provides:

A primary plan, and an entity that receives payment from a primary plan, shall reimburse the appropriate Trust Fund for any payment made by the Secretary under this subchapter with respect to an item or service if it is demonstrated that such primary plan has or had a responsibility to make payment with respect to such item or service. A primary plan’s responsibility for such payment may be demonstrated by a judgment, a payment conditioned upon the recipient’s compromise, waiver, or release (whether or not there is a determination or admission of liability) of payment for items or services included in a claim against the primary plan or the primary plan’s insured, or by other means.

The government takes its reimbursement rights seriously and is willing to pursue trial lawyers who ignore Medicare’s interest. In U.S. v. Harris, No. 5:08CV102, 2009 WL 891931 (N.D. W.Va. Mar. 26, 2009), aff’d 334 Fed. Appx 569 (4th Cir. 2009), a personal injury plaintiff lawyer had settled a claim for a Medicare beneficiary for $25,000. Medicare had made conditional payments in the amount of $22,549.67. After settlement, plaintiff’s counsel sent Medicare the details of the settlement, and Medicare calculated they were owed approximately $10,253.59 out of the $25,000. Plaintiff’s counsel failed to pay this amount, and the government filed suit. Plaintiff’s counsel argued that his only obligation to the government was to notify it of the settlement amount. The court disagreed. The court pointed out that the government may, under 42 U.S.C. §1395y(b)(2)(B)(iii), “recover under this clause from any entity that has received payment from a primary plan or from the proceeds of a primary plan’s payment to any entity.” Further, the court pointed to the federal regulations implementing the

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