During the pendency of this case you became Medicare eligible. As a result, your settlement is going to be delayed a bit. Let me explain why.
Some time back, Congress enacted the Medicare Secondary-Payer Act. Essentially, this ensures that Medicare is “secondary” to any other form of payment including health insurance, workers compensation as well as first and third-party liability payments (the other driver’s insurance and your underinsured motorist coverage). To protect Medicare’s rights, Medicare has a priority claim over any insurance proceeds which arguably cover injuries for which the Medicare recipient received Medicare benefits. If they are not reimbursed for these, Medicare can go after the recipient by deducting the amounts from government issued benefits (e.g., Social Security or Medicare payments); the insurance company who issues the check (in this case, either your insurance company or the third-party liability company); and even your attorney (in this case, me).
From our review of the case it appears Medicare and/or the Medicare supplement paid a portion of your medical bills. However, since your insurance company is responsible for reimbursing Medicare, they will not issue their check until Medicare has indicated the amount they are owed and the insurance company has done its due diligence as it relates to Medicare’s claim. Your insurance company will likely insist on cutting a separate check directly to Medicare to pay for those charges, if any.
Once we find out the amount, under a specific code section in the Code of Federal Regulations (CFR), you can reduce the amount of Medicare’s lien under what Congress has codified to encompass what are known as the “Made Whole Doctrine” and/or the “Common Fund Doctrine”). This essentially allows you to make Medicare pitch in to help pay your attorney fees for recovering their money for them. Essentially, they can’t make me be their collection agent at your expense.
So what does this mean to you? The amount of your settlement will likely be delayed, but also enhanced. The benefit to using Medicare is that they pay the health care providers very little as compared with the charges (reimbursement rate). The result is more money in your pocket. Hopefully, the increase in your settlement is worth the delay caused by using Medicare to pay part of your accident related medical bills.
At this point, once we get the final number from Medicare we can figure out what you actually have to pay back from the settlement. Step one is going through the bill to make sure they haven’t included non-accident related treatment. Next, I can attempt to reduce it to require them to pitch in for your attorney fees. However, because we are dealing with the federal government, this takes FOREVER!!! Depending upon the amount of the potential reduction you may elect to just let it go and cut them a check rather than try to save a couple hundred dollars. I will leave that to you.
The primary problem with all of this is the delay. There is literally nothing I can do once your insurance company determined you were Medicare eligible. The adjuster is looking at the guidelines for their company and will not cut a check until we get that number and an official letter from Medicare (CMS). We will immediately request the information from Medicare and will do everything we can to expedite the process. Unfortunately, we are at the mercy of Medicare in terms of the timing. We will do everything possible to expedite your settlement.
Thank you again for your trust and confidence in Jones Wilson LLP. We are grateful to have you as a client and we are always available to answer any questions you might have.
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