Medicare Liens and New Reporting Act


Medicare liens have always been a problem. They are about to become an even bigger problem. With an estimated 52 million people covered by Medicare, and the number expected to rise, Medicare will become an ever-increasing presence in personal injury litigation. The problem is how to deal with Medicare liens.

Nature of the Problem

Under the Medicare Act, Congress has attempted to make Medicare a secondary payor with rights against those who are designated as primary payors. While health insurance plans are the likely target, since 2003 the statute’s reimbursement provisions have expressly applied to those who receive a settlement or award. Under the law, those who receive settlements or awards must reimburse Medicare within sixty days from receipt of the payment. However, Medicare is also given the rights to pursue anyone who has made payment to the beneficiary. Medicare’s rights accrue upon payment. Medicare’s time to pursue such claims is six years after the right accrues, or three years from the date the item or service was furnished or one year after notification there is a primary payor. These confusing dates obviously give rise to problems. Not only that, if Medicare sues, they can recover interest on the amount of reimbursement, as well as damages double the amount of Medicare’s conditional payment.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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