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What is Medicare?
Medicare serves as health insurance for eligible participants. Medicare was established by Title XVIII of the Social Security Act in 1965 to provide Federal Health Insurance for the elderly (age 65 and older), for the disabled (regardless of age) and for those suffering with end-stage renal disease. Unlike Medicaid, Medicare is not based on economic need.
Medicare is considered a secondary payer (meaning that it is not primarily liable for the medical bills) with respect to medical expenses incurred as a result of an injury caused by someone else’s negligence. As a result, payments made by Medicare are called Conditional Payments and are made upon the condition that it will be repaid once payment is received from the primary payer (negligent party). This includes, but is not limited to, liability insurance (including a self-insured plan) and no fault insurance (medical payments coverage).
What steps are taken if you have Medicare?
First, we send immediate notification to Medicare. CBR&C (Coordination of Benefits and Recovery) receives our notification and opens a claim and a file.
After receiving notice of your claim, Medicare then issues a Rights and Responsibilities letter. Medicare then has sixty-five (65) days to issue a Conditional Payments Letter, which will list all medical expenses Medicare has determined to be related to your injuries.
If unrelated treatment is included in the Conditional Payments Letter then we can dispute them at this stage. We will correspond with Medicare and request that unrelated bills be removed from Medicare’s clam for reimbursement. We will review this with you so that we can determine the correct amount of Medicare’s lien. This can be a very difficult and time consuming process, but it is beneficial to you in your case. Updated Conditional Payment Letters can be requested by mail or online over the duration of the case.
Medicare and Your Settlement
Once a settlement is reached and you have executed pertinent documents pertaining to the acceptance of that settlement then Medicare can be notified of the settlement and we will request the Final Demand Letter.
The Final Demand Letter will list the final amount that Medicare has determined it should be reimbursed. This letter should take into account attorney fees and the costs associated with the claim and allow for a reduction to the client for these services and costs. Generally, we can anticipate what the Final Demand Letter will be based on the previous Conditional Payments Letter and verified balances of providers. This is helpful for you so that your net settlement amount will significantly change once an agreement is reached with the at-fault party; however, sometimes these amounts do vary.
The Final Demand Letter must be paid within sixty (60) days and if it is not paid by that time, then the client may be billed for interest on the amount owed. We want all of our clients to avoid this situation so we strongly encourage payment of the final amount since there is an appeals process to fight overpayment to Medicare that we can use if necessary.
If the Final Demand Letter is incorrect then we can appeal to have the correct amount determined and the overpayment be reimbursed to you. Therefore, in most cases it may be better to pay the incorrect Final Demand Letter amount and then the request for reimbursement with the Appeal.
We have handled these appeals for our clients and we have appealed all the way to the hearing phase in front of an Administrative Law Judge. In most cases, we are successful in persuading Medicare to accept our determination of the correct amount of Medicare’s lien without having to request a hearing. However, we have been very successful in winning at the hearing level when necessary and when we knew we were absolutely correct in our determination of the amount owed for reimbursement.
More information on Medicare and the Secondary Payer Act can be found at: http://cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Attorney-Services/Downloads/Liability-No-Fault-and-Workers-Compensation-Recovery-Process.pdf