Tuesday, May 31, 2016

Settlement of Medicare Liens Not Uncommon

By Walter F. Roche Jr.

The settlement of millions of dollars in Medicare liens remains a major obstacle for victims of the 2012 fungal meningitis outbreak, but legal experts say such liens are routinely negotiated with federal officials by a widely accepted formula.
A review of past cases and legal journal articles shows a typical case with a $25,000 Medicare lien on a $50,000 settlement would be negotiated with the federal government getting a payment of $17,500 instead of the full $25,000. (See Excerpt Below)
Medicare and Medicaid liens on a $200 million trust fund established for outbreak victims have been the subject of ongoing negotiations between lawyers for victims of the outbreak and federal lawyers representing the Centers for Medicare and Medicaid Services.
Fredric Ellis, a Boston lawyer, who has been involved in negotiations for a master settlement in the meningitis cases recently told a federal judge that he expected those talks would end soon, though he did not predict whether they would end in success or failure.
Victims have been told they cannot get any payments from the trust fund until the liens are resolved.
In a hypothetical case cited by the Center for Medicare Advocacy, a claim for $100,000 was settled for $50,000 while Medicare claimed reimbursement for the $25,000 it paid in medical bills.
Under the hypothetical case, the Medicare claim would be reduced by an amount equal to the fee paid to the victim's lawyer, plus actual costs incurred in the case.
With a legal fee based on 30 per cent of the settlement, Medicare would reduce its fee to $17,500. The lawyer would get $15,000.
That would leave the victim $17,500 going to the victim, according to the advocacy group.
If the negotiations for a master settlement with CMS fail, legal experts say, it is likely that a process similar to the hypothetical case will be applied to the individual claims of the 2012 outbreak victims.
Ellis did tell U.S. District Judge Rya Zobel that he expected initial payments for some 1,200 victims would be made in July.
Contact: wfrochejr999@gmail.com

  Example From the Center for Medicare Advocacy

Example: Ben Beneficiary received a settlement of $50,000 following an accident. His medical expenses were $40,000, of which Medicare paid $25,000; his pain and suffering were valued at $10,000; lost wages were $20,000; and his permanent loss of limb was valued at $30,000.
Despite the fact that Ben's settlement was only 50% of his $100,000 damages, Medicare will demand recovery of its entire $25,000 outlay, reduced only by its proportionate share of the procurement costs. Assuming a 30% contingency fee arrangement, Medicare will claim $17,500, Beneficiary's personal injury attorney will receive a fee of $15,000, and Ben will receive only $17,500, leaving him with $82,500 in uncompensated losses.


  1. Waiver of Recovery
    The beneficiary has the right to request that the Medicare program waive recovery of the demand amount owed in full or in part. The right to request a waiver of recovery is separate from the right to appeal the demand letter, and both a waiver of recovery and an appeal may be requested at the same time. The Medicare program may waive recovery of the amount owed if the following conditions are met:

    ** The beneficiary is not at fault for Medicare making conditional payments, and;
    ** Paying back the money would cause financial hardship or would be unfair for some other reason.

    If it is believed that both of these conditions apply, a letter should be sent to the BCRC that explains the reasons. When a waiver of recovery is requested, the BCRC will send the SSA 632 Request for Waiver form asking for more specific information about the beneficiary’s income, assets, expenses, and the reasons why waiver of recovery should be granted. A copy of this form and instructions on how to complete this form may be accessed in the Downloads section below. If the BCRC is unable to grant the request for a waiver of recovery, the BCRC will send a letter that explains the reason(s) for the decision and the steps to be followed to appeal that decision if it is less than fully favorable.

    Note: The waiver of recovery provisions do not apply when the demand letter is issued directly to the insurer or WC entity. See Section 1870 of the Social Security Act (42 U.S.C. 1395gg).

  2. I'm sorry but I don't think they or insurance liens deserve a dime. Even if it is the law. These laws need to be changed! It is not right to victimize victims all over again. Just my 2 cents.