Don't be surprised at settlement by Medicare's Interest in your case.

Section 111 of Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA) adds new mandatory insurer reporting requirements for liability and workers compensation settlements. Insurers and self-insured agencies will now be reporting all payments, judgments or awards involving enrolled Medicare beneficiaries to Medicare. This applies whether, or not, there has been an admission or determination of liability. Payment may be demonstrated by a judgment, a payment conditioned upon the recipient's compromise, waiver, or release of payment for items or services included in a claim against the primary plan or the primary plan's insured, or by other means. This new statue, does not relieve an attorney's obligation to report cases to the Coordinator Of Benefits Contractor (COBC) and it is very much in the best interest of the attorney to report.

Medicare will demand the funds it paid for injury-related medical payments, whether, or not, the attorney reported the case. This means that if the attorney did not consider Medicare's interest when litigating the case, the final settlement will be lower than anticipated and the attorney may face a suit for failure to comply (see US v Harris), as well as a malpractice suit.

In the past, Medicare learned of settlements through attorneys when they reported the case to the Coordinator Of Benefits Contractor; however, with the implementation of Section 111, Mandatory Insurer Reporting (MIR), Medicare will discover settlements through insurers.

There are three potential impacts to the attorney community:

  1. Insurers may delay settlement until Medicare's interests have been considered,
  2. Attorneys may forfeit their compensation for failure comply,
  3. Attorneys may have to provide insurers additional information to support their reporting requirements.

If the attorney properly identifies cases involving Medicare beneficiaries and understands the process well enough to know when to seek help, there is little risk of failure. As more and more Baby Boomer's become Medicare beneficiaries, the market will grow and attorneys may find the practice a profitable niche.

David Piatt, was recently the Program Director of the Medicare Secondary Payer Recovery Contractor. Additional information can be found at www.piattconsulting.com.