If you are a Medicare recipient who has a personal injury claim, Medicare will pay for your medical treatment related to the injury claim, but there are important procedures and rules that you should be aware of.
If you get into an accident and require medical treatment as a result of that accident, federal law requires you to report the accident to the Medicare Coordination of Benefits (COB) Contractor. The COB Contractor is a private company that processes reimbursement of Medicare benefits when the Medicare recipient has had a personal injury case.
If you do not have the contact information for Medicare’s COB Contractor in your Medicare paperwork, you can find the information at one of Medicare’s web sites, www.cms.gov or www.msprc.info. You must provide the Medicare COB Contractor with the details of your injury, the names of your health care providers, and the name of your lawyer, if you have hired one.
If you don’t report the accident to the Medicare COB Contractor, there is a good chance that it will find out anyway. Health insurance companies, including Medicare, program their computers to flag payments for medical treatment that generally occurs due to injury (usually orthopedic injuries). Thus, if you break a bone in a car accident, and do not report it to Medicare, you will probably receive a letter at some point asking if you have had a personal injury, and, if so, asking for the details of the claim. You must comply with this request. If you fail to respond to this request, you could jeopardize your Medicare eligibility.
After you report the accident, Medicare will monitor your case. The COB Contractor will periodically send you and your lawyer requests for updated information. Once again, you must comply with these requests.
After you settle your case, your lawyer must notify the COB Contractor that the case was settled. He or she must do this before disbursing the settlement proceeds to you. The Contractor will then send your lawyer a statement of all of the medical bills that Medicare paid that the Contractor thinks are related to your personal injury case.
You must reimburse Medicare for all medical bills that it paid on your behalf if you settle a personal injury claim or win at trial. Federal law prevents the COB Contractor from accepting a negotiated amount in all but the most unusual situations. You should assume that there is no chance of getting the Contractor to agree to reduce the lien.
You and your lawyer will review the COB Contractor’s statement. If you agree with it, your lawyer will simply send the Contractor a check for the statement amount when he or she disburses your settlement.
But if you think that the statement contains medical expenses that are unrelated to your personal injury case, your lawyer will need to notify the Contractor of that. The Contractor will then review your lawyer’s letter and determine whether it agrees. This could take a month or even two months. If the Contractor agrees with your lawyer, it will send a revised statement. Your lawyer will then send the Contractor a check for that amount when he or she does your settlement.
If the Contractor does not agree with your lawyer’s position, then you and your lawyer will have to decide whether to appeal the Contractor’s determination, or give up and pay the Contractor what it demands. If you decide to appeal, your lawyer will begin the Medicare internal appeals process. While the appeal is pending, your lawyer cannot disburse to you the full amount of the settlement. He or she will either send the disputed amount of the Medicare lien to the COB contractor, or hold it in escrow, depending on the circumstances.
He or she can only disburse to you the portion of the settlement that you would receive based on the Contractor’s determination of the related medical bills. Here is an example of this:
Your lawyer can disburse only $14,000 to you ($30,000 – $10,000 – $1,000 – $5,000 = $14,000). He or she will either send the Contractor Medicare’s $5,000 or hold it in escrow while the appeal is pending. If Medicare wins the appeal, it gets the whole $5,000. If you win the appeal, you only have to give Medicare $2,000, and you get to keep the extra $3,000.
Medicare issues are very complicated, so, if you have questions about them, you should speak with a qualified lawyer.