Discover the secrets to fighting a Medicare lien and keeping more of your settlement money
Under federal law, you (the Medicare beneficiary) are responsible for making sure that Medicare gets repaid for "conditional payments" that it makes. All Medicare payments are made on the condition that you will pay Medicare back if benefits could be paid by insurance that is primary to Medicare. This includes liability insurance and workers' compensation insurance.
You should notify Medicare right away if you have filed or plan to file a claim with insurance that is primary to Medicare.
STEP # 1: The first step in determining whether a Medicare lien exists and the amount of the lien is to report your case to the Coodinator of Benefits Contractor (COBC). On this letter, you must include the beneficiary's name, health insurance claim #, gender and date of birth, and the beneficiary's address and phone number. You should also include the date of the injury or accident, a description of the injury, type of claim (workers' compensation, no-fault, general liability) and the insurer's name and address. The COBC can be contacted at 1-800-999-1118 between the hours of 8 a.m. and 8 p.m.
If you are represented by an attorney, this letter should include the attorney's name, address and phone number. Proof of representation is reuqired in order for the Medicare Secondary Payer Recovery Contractor (MSPRC) to communicate with and provide information to a Medicare beneficinary's lawyer. The MSPRC can be contacted at MSPRC Liability, P.O. Box 33828, Detroit, Michigan 48232-5828 (fax #: 734-957-0998).
STEP # 2: Once the case is established with the COBC, you will receive a "Rights and Responsibilities" letter from the Medicare Secondary Payer Recovery Contractor (MSPRC). A Conditional Payment Letter will be generated automatically within 65 days of the issuance of the "Rights and Responsibilities" letter. The Conditional Payment Letter will show the conditional payments Medicare has made on your behalf at that time. A Conditional Payment Letter does not need to be requested, as it will be sent automatically by MSPRC.
A conditional payment is a payment that Medicare makes for services that another payer may be responsible. This payment is "conditional" because it must be repaid to Medicare when a settlement, judgment, award or other payment is secured.
"Conditional" payments are those Medicare payments that are related to your case. ONLY ITEMS RELATED TO THE CLAIM ARE SUBJECT TO THE MEDICARE CLAIM. For example, if you sustained a fractured hip in an accident case, Medicare payments for a non-healing ulcer on the left foot should not be considered a "conditional" payment subject to a Medicare lien. The treatment of a non-healing ulcer on your foot has nothing to do with a fractured hip and thus, Medicare does not have a lien against the medical expenses incurred for the ulcer.
BE VERY CAREFUL! In most cases, the Medicare Secondary Payer Recover Contractor (MSPRC) will claim that all payments made by Medicare are "conditional" payments subject to a Medicare lien. The MSPRC will not bother to review each Medicare payment to determine if the medical treatment was related to the injury sustained in the accident in question. This is your job! You must review the the Conditional Payment Letter carefully to make sure that only case related claims are included. You can, and should, contest any payments listed on the Conditional Payment letter that do not relate to the injuries that you sustained in your accident case.
Once the MSPRC sends the Conditional Payment Letter, the conditional payment information is posted under hte "MyMSP" tab of the www.mymedicaregov website. When a Conditional Payment Letter has been sent, requests for an updated Conditional Payment Letter can only be processed every 90 days after the last Conditional Payment Letter was issued.
The conditional payment amount is an interim amount. Medicare may continue to make conditional payments while the case is pending. Consequently, the MSPRC cannot provide a final conditional payment amount until there is a settlement.
Keep in mind that claim information is available only if Medicare has received and processed your claim. It usually takes 4-6 weeks to process a claim. You will receive a Medicare Summary Notice when Medicare pays expenses.
STEP # 3: You should dispute any Medicare payments that are unrelated to the injuries sustained in the accident in question, and after the unrelated payments are removed from the Conditional Payment Letter, you can request a final demand. The FINAL DEMAND is the amount of the original conditional payment amount minus unrelated items and less the costs of procuring the recovery, settlement or judgment.
Your attorney will then receive a Demand Letter from MSPRC that requires that you make payment within 60 days of the Demand Letter. If payment is not received by the MSPRC within 60 days of the date of the demand letter, interest will be charged from the date of the Demand Letter.
Medicare will also reduce its recovery to allow for the cost of procuring a judgment or settlement. Once the case has settled, the settlement documentation must be sent to the MSPRC to determine the "procurement costs" of the settlement or judgment. The procurement costs are the attorneys' fees and expenses incurred in the lawsuit. The MSPRC will reduce the Medicare lien by a percentage that is at least one-third of the lien amount on account of the procurement costs.
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