What is a Medicare lien and how does it arise?
A Medicare lien is a right to repayment of amounts paid by Medicare in 42 U.S.C. section 1395y(b)(2)(A)(ii). A Medicare lien arises when Medicare pays medical expenses for aged, blind or disabled beneficiaries that will recover from defendants or insurers in litigation. Medicare normally requires others to pay first. Nevertheless, Medicare will advance medical expense if insurers or others are not expected to pay within 120 days. Such payment, however, is conditioned upon reimbursement, giving rise to a lien. The lien is for payments from the date of injury through the date of settlement.
Why should I be concerned about a Medicare lien?
The Medicare Prescription Drug Act of 2003 (the “Act”) imposes obligations upon the parties to a lawsuit or claim to inform Medicare of the claim and to satisfy the lien prior to payment of any party to the lawsuit. The parties must affirmatively seek out Medicare liens and resolve them before any settlement payments may be made. To enforce compliance, the Act permits double damages against any party violating its provisions.
What priority does a Medicare lien have?
A Medicare lien is superior to other payors even if state law or the governing insurance policy provides otherwise. Medicare is subrogated to the rights of the plaintiff against the insurer and, to enforce those rights, may intervene in the plaintiff’s action.
How do I identify a Medicare lien and its amount?
To determine your client’s status with Medicare, it is important to notify Medicare as soon as your claim is made. A second notification must be provided once a settlement has been reached that will trigger the reimbursement requirement. In response to that second inquiry, you will receive a questionnaire that Medicare will use to determine the amounts owing in repayment. Note that interest runs on the lien. If the lien is not paid within 60 days after notice, then Medicare may enforce the right to that interest.
Navigating the Medicare system can seem overwhelming. Let Higgins Lien Resolution assist you with contacting the Medicare Benefits Coordinator, providing the necessary notices and resolving the lien.
Does Medicare share the plaintiff’s fees and costs?
Yes. Medicare will reduce its lien proportionately by the fees and costs incurred to procure the settlement. If the lien is equal to or exceeds the settlement, then Medicare will only collect an amount equal to the excess over those fees and costs.
Can a Medicare lien be compromised?