The best way to reduce a Medicare lien

In malpractice lawsuits, Medicare liens are often an obstacle to a settlement.  The Medicare lien must be paid from your portion of the settlement and in cases involving catastrophic injuries, the lien can range from $100,000 to $300,000 or more.  What do you do if Medicare gets a bigger cut of your settlement than you do?  Before casting aside the settlement, you may want to consider challenging the Medicare lien.

Challenging Medcare payments that are unrelated to the injuries in your lawsuit is the key to fighting a Medicare lien.  For example, if you sustained a fractured leg, the Medicare lien should not include expenses relating to your treatment for a heart disorder.  In this example, Medicare can only claim a lien for those expenses directly related to your fractured leg.  You can challenge the Medicare lien by showing that certain medical expenses paid by Medicare were unrelated to the injuries that you sustained in your lawsuit.

How do you challenge Medicare expenses unrelated to the injuries sustained in your case?

After you notify the Medicare Secondary Payer Recovery Contractor (MSPRC) of your case, you will receive a "Rights and Responsibilities" letter acknowledging your case and informing you of Medicare's rights.  Within 65 days of the Rights and Responsibilities letter, the MSPRC will automatically send you a Conditional Payment Letter.

The Conditional Payment Letter indicates that Medicare has made certain "conditional payments" of medical care related to your case.  This is the lien amount, or the amount that Medicare will want to get paid for its lien.

When you receive a "Conditional Payment Letter" from the Medicare Secondary Recovery Contractor (MSPRC), the letter will include a "payment summary" that shows each payment made by Medicare that was related to the injuries in the lawsuit. The payment summary will contain various codes for each payment that are gobbly-gook to every one but a Medicare specialist.  However, the codes on the payment summary contain detail about each expense that can help you challenge the expenses.

The payment summary will have a code referenced by "ICN", which means the Internal Control Number.  The Internal Control Number (ICN) is a 14 digit number given to each claim by Medicare.  The Internal Control Number identifies how, when and where the claim was received. Using the Internal Control Number, you can prove that some of the Medicare expenses are unrelated to the injuries involved in your personal injury case.

The Internal Control Number (ICN) indicates the year the claim was submitted, and the date that Medicare received the claim.  The first six digits reflect when the claim was received.  The first digit is a century code ("2" indicates 2000).  The second two digits indicate the last two digits of the year the claim was received and the next three digits indicate the day of the year the claim was submitted (out of 365 days).

You should review the dates of the charges on the payment detail provided by the MSPRC to see when the charges were made and by what entity.  This can show whether the Medicare payments were related to the injuries involved in the personal injury lawsuit.

Eliminating Unrelated Charges is the Key!

You can dispute the inclusion of Medicare expenses by writing to the MSPRC and challenging expenses that are unrelated to your personal injury case.  For example, you can write to the MSPRC: "We dispute the inclusion of Medicare payments circled on the attached Payment Detail sheet for the reason that the payments were for treatment unrelated to the injury involved in the personal injury claim in this case."  The MSPRC will remove those expenses that are unrelated to your personal injury case and the reduction in "conditional payments" will lower the amount of the lien.

You can also challenge the Medicare lien using the diagnosis codes contained on the Payment Summary Form.  The "diagnosis codes" are five digit codes that represent the reason for the office visit or medical test.  The diagnosis codes used by Medicare are known as "ICD-9", which means the "International Classification of Diseases, 9th Revision". 

The Payment Summary Form will include the ICD-9 codes cited by medical providers in the billing statements and the ICD-9 code will identify the medical diagnosis related to the treatment.  The meaning of the diagnosis codes can be deciphered at www.icd9cm.com.  You should compare your medical history to the diagnosis codes referenced in the Payment Summary Form--you may be getting charged a lien for treatment that is completely unrelated to the injuries in your lawsuit.

"Procedure codes" are a five digit code that represents the type of services that you received, i.e., office visit, surgery, blood test and x-rays.  The procedure codes will also help you identify whether the expense in question is related to the injuries that you sustained in your injury case.

Audit the Payment Summary Form Carefully

You should circle any Medicare payments that were to treat diagnoses unrelated to your injury claim, such as treatment for diabetes, hypertension or other non-traumatic conditions and send a letter disputing the expenses for unrelated conditions.  You should ask the MSPRC to remove the disputed payments and issue a new Conditional Payment Letter.  If you get no response within 30 days, call the MSPRC and check the status.

If you have further questions, I welcome your phone call

If you have any questions about reducing a Medicare lien, I welcome your phone call on my toll-free cell at 866-889-6882 or you can get my free book, The Seven Deadly Mistakes of Malpractice Victims, by requesting the book on the home page of my website at www.protectingpatientrights.com.