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The Role of Medicare In Personal Injury Cases

It should come as no surprise that lawsuits for personal injury rarely result in financial compensation for the injured plaintiff before injury-related costs have started piling up. After all, seeking medical attention is the first priority. Even in the common circumstance where settlement negotiations avoid drawn-out litigation, medical bills can begin piling up. For injured plaintiffs who are insured through Medicare, the government program may cover some or all of the treatment for an injury. In turn, Medicare becomes financially involved in the personal injury case.

Medicare is a federal health insurance program for individuals who are 65 years of age or older, or who have qualifying disabilities. Like any insurer, Medicare has rules in place to prevent fraud and other forms of insurance abuse. Many of these rules focus on health care providers who get paid by Medicare, but patients also have important obligations.

  • Medicare is entitled to reimbursement out of personal injury awards.

The chief goal of personal injury lawsuits is to ensure that a victim of another person’s wrongful actions (negligence, deliberate malicious acts, illegal behavior, and so on) does not bear the financial cost of his or her injuries. The true cost of an injury can include lost wages and other important components, but quite often medical costs form the single largest piece of the financial puzzle.

Insurers, including Medicare, will cover personal injuries that are the subject of lawsuits. But because the insurer, rather than the injured plaintiff, bears the costs of the injury, the insurer is entitled to seek reimbursement for its expenses. Federal law provides that Medicare must receive reimbursement before the plaintiff or other claimants can take any compensation from a settlement or judgment award.

  • Medicare receives an automatic lien on awards.

The legal mechanism that ensures Medicare is reimbursed is called a judgment lien. By law Medicare automatically receives a first lien on any award granted to the insured plaintiff. These liens have a couple important features. First, a Medicare lien takes seniority over all other liens, meaning that until the lien is removed (following full reimbursement) no one else, including the plaintiff, can be paid from the compensation award. Second, there isn’t much room for negotiation when it comes to Medicare liens: what the program is owed is usually what it must be paid. There is an exception for plaintiffs who are represented by an attorney. In those cases liens can be reduced by one-third, to ensure that the plaintiff’s final compensation will cover the plaintiff’s legal fees.

  • Medicare must be notified of a case’s resolution.

Any time Medicare has covered expenses related to a personal injury lawsuit the insured plaintiff must notify it when a settlement or judgment is obtained. The notice is due within 60 days and can be submitted electronically. Failing to provide notice on time results in significant fines. After receiving notice Medicare prepares a report detailing the charges that are subject to its lien. It’s common for plaintiffs to go through a process to ensure that the lien accurately reflects only costs that were related to the injury. Once a final accounting is completed, Medicare should be paid promptly.

GGRM is a Las Vegas personal injury law firm

For over 45 years the attorneys at Greenman Goldberg Raby Martinez have represented clients in the Las Vegas area in personal injury cases. We can help you navigate all aspects of your personal injury case, including dealing with Medicare liens. For a free attorney consultation at 702-388-4476 or request a call through our website.