Medicare May Claim Against Some Awards
Seniors on Medicare who continue to work after age 65 but receive health care benefits through their employers may be the first to encounter the distinction between employer-based coverage which is considered “primary” and Medicare as “secondary.”
Similarly, seniors and the disabled receiving coverage directly or indirectly through Medicare might find a claim placed against the proceeds of a personal injury or workers compensation claim by Medicare under the Medicare Secondary Payer Act.
The average person may not need to know all the details of the Medicare Secondary Payer Act but it would be helpful to know the background so that, if there are coordination of coverage issues between an employer-based health insurance plan and Medicare or, if there is a lawsuit and the claimant is receiving Medicare benefits, he or she is prepared.
When it comes to Medicare, the distinction between “primary” and “secondary” coverage can be confusing. Every personal injury attorney handling workers compensation claims will need to be aware of the laws in order to safely settle claims. Those who are getting confused by workers compensation laws may consult a workers comp attorney for legal advice.
Considering Medicare as the “secondary payer” means that the government is looking to other sources of payment that are available to the Medicare recipient. These sources might include the senior employee’s benefit plan or the liability insurance company for the person who inflicted the injury that caused the Medicare recipient to be disabled in the first place. The idea is for the “primary” source either to absorb the cost initially or for Medicare to be paid back in whole or in part for benefits paid out. It is to keep down overall Medicare costs to the system.
Here is some background from a knowledgeable source.
“In the United States, Medicare, along with other government sponsored health benefits plans including Medicaid and SCHIP … is a stabilizing giant in public health intervention… Medicare, funded entirely by the United State government, provides benefits to persons over 65 years of age, persons with end stage renal disease, and persons receiving Social Security Disability for at least twenty four (24) months…
“In 1980, Congress reversed twenty-five (25) years of uncontrolled payment of health care benefit claims through passage of the Medicare Secondary Payer Act (MSP). The MSP declares that Medicare is the secondary payer to other available payment sources for healthcare related costs arising out of a particular triggering event (qualifying) event. The MSP provides that Medicare is not obligated to pay where there exists in place, for the benefit of the individual Medicare participant, another payment source. Medicare beneficiaries, beneficiaries’ attorneys, and alternative payment source plans including…liability insurers, self-insurance plans, employer-based group health plans, and workers’ compensation plans (private or statefunded) are all subject to the MSP’s mandates…” Defense Counsel Journal, April 2010, by Tamela J. White.
Based on experience of some who work with the system, especially workers’ compensation experts, the Act has some serious problems. One of the major difficulties has been determining how much the government wants.
Ken Shigley, then president-elect of the Georgia State Bar and a personal injury attorney, went so far as to call the Medicare Secondary Payer Act “One of the biggest headaches today in representing senior citizens in personal injury cases…” “Medicare Secondary Payer Enhancement Act of 2010” posted by Ken Shigley, June 25, 2010.
Recently some improvements were made at least in creating a procedure for litigants to learn the amount of the Medicare claim before the parties settle or receive a judgment and in modifying the appeals process. On January 10, 2013, President Obama signed into law H.R. 1845, the Strengthening Medicare and Repaying Taxpayers Act, the SMART Act, for short, that deals primarily with the following issues. First, CMS, the agency responsible for administering the Act, is to establish a new conditional payment portal to state the amount that it believes it would be owed. Second, regulations need to be established to create an appeals process. Third, steps would be taken to establish regulations exempting insurers from punishment where they made good faith efforts to comply. Finally, beginning November 15, 2014, the federal government must begin to publish a minimum settlement or judgement dollar amount below which the government will not receive reimbursement. The steps are movement in the right direction to allow personal injury and workers compensation claims for those on Medicare to be settled without undue concern or risk.
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.