By: Medicare Team
Recently the United States Government, on behalf of the Centers for Medicare & Medicaid Services (CMS), filed a recovery action against defendant corporations, their insurance carriers and plaintiff’s counsel, following an amicable settlement of a liability action. The case, US v. Stricker et. al., CV-09-PT-2423-E, was filed on December 1, 2009, nearly six (6) years after the settlement agreement was filed in the underlying action on December 2, 2003. The underlying action settled for $300 million dollars in 2003. CMS is asserting that it previously made conditional payments on behalf of 907 of the plaintiffs for medical expenses related to injuries released in the settlement agreement. CMS claimed a right to reimbursement for these conditional payments, plus interest against the defendant corporations as self-insured entities, their insurance providers and numerous attorneys representing the group of plaintiffs. Additionally, CMS asserted double the amount of conditional payments against the defendant corporations and their insurance providers due to the necessity of instigating the lawsuit. This lawsuit reinforces Medicare’s published statutory recovery rights, and should serve as a warning to counsel, insurance carriers and self insured entities as to Medicare’s departure from their prior statements of how they would proceed in collecting on liens in general liability matters. Furthermore, this case illustrates the importance of investigating a Medicare lien early in the life of a claim, so that settlement negotiation may properly account for amounts owed to Medicare. If parties fail to account for a Medicare lien, they may lose their right to appeal the amount of the lien, and as evidenced by this litigation, can face substantial costs years later. Additionally, the responsibility for lien repayment should be unequivocally identified in the settlement agreement and parties should take precautions before releasing payment. Burns White recommends consulting with a Medicare Attorney prior to any settlement, judgment or award where a bodily injury claim has been alleged. Please feel free to contact any of the attorneys in our Medicare Department or Bruce McKnight, marketing & operations manager, at (412) 995-3247 for any and all of your Medicare questions. 01-11-10