When you make a personal injury claim, your health insurance coverage can play an important role in bringing the case to settlement and covering your medical needs before your case is finalized and damages awarded. For example, your medical insurance may cover injuries from a car accident and later recover its payments from the other driver’s car insurance. The process of settling a personal injury claim may vary depending on your insurance company. Medicare, on the other hand, is a whole different ball game. Medicare is the federal health insurance program for people 65 or older, people under 65 with certain disabilities, and people with End-Stage Renal Disease who require dialysis or a similar treatment. How does Medicare interact with a personal injury settlement?
There are multiple “parts” of Medicare that help cover three main types of healthcare services. The most commonly known and utilized parts include:
- Medicare Part A, which is hospital insurance that covers inpatient hospital stays, nursing facilities, hospice care, and some home health care.
- Medicare Part B, which is medical insurance covering certain services from doctors, outpatient care, medical supplies, and preventive services.
- Medicare Part D, which helps to cover prescription drugs and vaccines.
Less frequently, some Medicare patients may carry Medicare-approved plans from private insurance companies, which are typically referred to as Medicare Advantage Plans or Medicare Part C.
For the most part, a Medicare health plan is provided by a private company that contracts with Medicare to provide Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) benefits.
How does Medicare affect personal injury cases?
When a Medicare recipient receives a personal injury settlement after using Medicare funds to pay for health costs related to the injury, they are required to repay Medicare for all of the medical expenses that are related to the personal injury claim.
However, Medicare can only take money to cover its costs related to your personal injury claim. For example, if you were also receiving treatment for an illness unrelated to your personal injury claim, Medicare cannot recover that money. Hypothetically, this means that Medicare can’t attempt to seek reimbursement for something like dialysis treatment just because a patient is also using Medicare to receive treatment for injuries sustained in a car accident.
How much of my personal injury settlement can Medicare take?
Medicare will require from your settlement the amount of money it paid for your injuries. If Medicare’s claim exceeds the settlement amount, it has a right to recover the entire amount, subject to a deduction for attorneys’ fees. Simply put, this means that Medicare can choose to recover an entire settlement and leave the victim with nothing, should they have expended more than the settlement amount.
If someone has died as a result of injuries after Medicare has paid funds for care and treatment, Medicare can still seek reimbursement for any expenses covered by Medicare related to the patient’s treatment from a personal injury award, an insurance company, or from the negligent party.
Ongoing treatment for a personal injury may also alter the way your case will interact with Medicare. A “Medicare Set Aside” (“MSA”) might be necessary to pay for medical care. Because interacting with Medicare during the course of treating a personal injury can be complicated by complex procedures and confusing rules, It is best to speak to an attorney to have a better understanding of how exactly your case would relate to Medicare.
Does Medicare subrogate?
Subrogation means to substitute a person for another entity. In personal injury claim issues, it means that Medicare can file a claim against a third party to recoup its costs. In other words, Medicare can recoup the monies it pays for your medical care for a personal injury from the party (or their insurance company) found to have caused the injury.
When Medicare has paid for medical expenses due to a personal injury, Medicare can take some subrogation payments from a personal injury judgment or settlement. Medicare subrogation rules take the plaintiff’s costs and other conditions into account.
How do you negotiate a Medicare lien?
Medicare has the legal right to reimbursement for injuries pertaining to a personal injury claim. If Medicare makes payments in support of an injured person’s recovery, Medicare can assert a lien on any compensation received from the personal injury claim in order to recover their expenses. Asserting a lien gives Medicare a claim to the settlement funds and/or judgment and this lien takes priority over any other person, entity, or insured party. Private health insurance can be flexible in negotiation. However, Medicare is typically not flexible on negotiating its lien or the amount it’s filing the lien for without the assistance of an experienced personal injury attorney. A personal injury attorney can help audit Medicare liens and separate out treatment not related to the personal injury action in order to maximize the client’s share of the settlement. It is for these reasons that choosing a qualified and experienced legal representative is invaluable in personal injury actions involving Medicare.
Medicare’s Rights to Recover
Medicare’s right to recover comes from the Medicare Secondary Payer (“MSP”) statute, section 1862(b) of the Social Security Act, 42 U.S.C. § 1395y(b). The purpose of making these legal rights was to ensure that Medicare was not paying for medical bills that someone else should be paying. The Medicare Secondary Payer grants Medicare the right to claim (i.e., assert a lien) reimbursement from any judgment or settlement proceeds that include compensation for medical bills paid by them.
Do personal injury cases affect your Social Security benefits?
If you receive Social Security Benefits–a monthly payment based on years worked–your benefit payment is not affected by a personal injury settlement.
If you receive Social Security Disability Insurance benefits, your benefits are also not affected by a personal injury settlement. A personal injury case does not affect your social security disability insurance benefits (SSDI). You can also apply for social security disability insurance benefits at the time of your personal injury case if you meet Social Security’s definition of “disability.”
On the other hand, if you receive Supplemental Security Income (SSI), a personal injury settlement is likely to affect your payments, either reducing the amount or in some instances causing SSI payments to be canceled entirely. Supplemental Security Income is a needs-based welfare program that is not related to work history and can be reduced or even eliminated by a substantial enough change in circumstances.
Do I have to report a personal injury settlement to Social Security?
Yes, a settlement report has to be provided to the Social Security Administration no later than 10 days after the settlement has been received. However, as mentioned before, reporting your settlement to the Social Security Administration, at least in most instances, shouldn’t impact your benefits eligibility or the amount of the payments you receive.
Help for working with Medicare
At Trent Law Firm, we follow a special procedure when one of our clients is a Medicare beneficiary. To avoid any potential penalty, we work with Medicare’s Benefits Coordination and Recovery Center (BCRC) to report the case. There is quite a bit of information needed, including:
- Name, gender, and date of birth
- Medicare number
- Address and telephone number
- Type of claim you may have (car accident, premises liability, product liability, medical malpractice, or other)
- Details about the injury
- Details concerning the accident, date and hour
- Attorney contact information
After we notify BCRC of the case, they determine the conditional payments made for the personal injury or the treatment they had to cover. They’ll send a conditional payment letter with the information of the claim’s costs to the Medicare beneficiary.
This conditional payment letter is not final. Medicare can modify the amount while the beneficiary’s claim is still pending. A formal recovery demand letter will be sent by BCRC after a settlement has been made and the payment has been reported to Medicare. The final letter from BCRC specifies the time frame in which payments must be completed and specifies the Medicare lien amount.
How can Trent Law help?
Dealing with Medicare after a personal injury can be a complicated and frustrating process. At Trent Law Firm, we can help ease the process and take the heavy load for you. We ensure that you are always in compliance with Medicare rules and deadlines so that you have no penalties assessed against you by Medicare.
If you or a loved one has suffered from a personal injury, we take legal action with the goal of compensating those affected by the other party’s negligence. Compensation in personal injury cases can be used to pay medical bills or to reimburse Medicare for its costs. Compensation can also address lost wages as the result of injury, to help you recover, for emotional distress, and more.
Our office is unmatched in its determination to help you get the compensation you deserve for your serious injury.
Contact the offices of Trent Law Firm, P.C., today to discuss your case and how our experienced personal injury attorneys may be able to help. Call (866) 599-8601 for a confidential consultation.