The Medicare Secondary Payer Act and How It Impacts Your Florida Personal Injury Recovery
When you’ve been injured due to an accident and you’re pursuing damages in a personal injury lawsuit, perhaps the greatest single factor that can impact your settlement is whether or not Medicare has ever paid for any portion of your treatment. If you receive Medicare benefits, the Medicare Secondary Payer Act (MSPA) significantly controls when and how your settlement will be paid as well as possibly how much percentage Medicare can recover on your settlement.
If you fail to navigate this process correctly, you may end up with serious financial issues, such as delayed payments, decreased compensation, and even legal action against you by the federal government. As a Florida accident attorney, I have witnessed firsthand how complicated this matter can be. This blog is designed to explain the basic of this process so you are aware of your rights and responsibilities when settling your claim and avoid these potential pitfalls.
What Is the Medicare Secondary Payer Act?
The Medicare Secondary Payer Act (MSPA) is a federal law enacted to prevent Medicare from being the primary payer in situations where another party—such as an insurance company or a tort award for personal injury—is responsible for paying medical expenses. Instead, Medicare is a secondary payer and can get back any payments it has made on behalf of an injured person once that person is paid by a third party.
In essence, if you’re a Medicare beneficiary and you receive a personal injury settlement, you owe Medicare back any medical expenses it paid on your behalf due to your injury prior to receiving full payment from your settlement.
How the MSPA Affects Your Personal Injury Settlement
If you are a plaintiff on a personal injury case and Medicare has paid for any of your treatment, the MSPA may impact your case in the following ways:
- Medicare Has a Right of Reimbursement
Medicare automatically takes a lien (a Medicare lien) on the award or settlement that you receive. It means that before you can receive your full settlement value, Medicare must be reimbursed for any medical bills related to the accident that it paid out. Failure to do so can lead to legal and financial penalties, including double damages or additional fines.
- Settlement Delays in Disbursement
As Medicare’s recovery process involves verifying the amount owed, it could occasionally hold up your settlement. The reimbursement amount will have to be reviewed and approved by the Centers for Medicare & Medicaid Services (CMS), which can take several weeks or months. Therefore, it becomes essential to hire a skilled personal injury attorney early enough so that everything regarding Medicare is handled efficiently.
- Potential Reduction in Your Net Compensation
After attorney fees, medical bills, and Medicare reimbursement are subtracted, your final settlement amount might be significantly less than you had hoped. But in some cases, attorneys are able to negotiate with Medicare to reduce the amount you must pay, leaving your take-home portion of the settlement as large as possible.
How to Handle Medicare’s Involvement in Your Settlement
Because Medicare has a right of reimbursement by operation of law, it’s best to actively manage its participation in your case to prevent unnecessary delay and surprise cost. Here’s how you can manage it:
- Notify Medicare of Your Injury Claim As Soon As Possible
When making a claim for personal injury, notify Medicare promptly when you file. Notifying enables Medicare to track the case and observe what it has paid out with regard to your injury. This omission may enable Medicare to recover money in the future by suing you.
- Request a Conditional Payment Letter
Medicare will issue a Conditional Payment Letter (CPL) that outlines the sum of the medical expenses it incurred on your behalf. Having your lawyer check the document ensures that only accident-related expenses are included, to avoid overpayment to Medicare.
- Negotiate the Medicare Lien
In some cases, your attorney can also attempt to negotiate a lower reimbursement from Medicare. There are some provisions under which Medicare will accept a lower lien, such as hardship considerations or if you can demonstrate that you would be left with an unreasonably low settlement if you were required to pay the full amount.
- Create a Medicare Set-Aside (MSA) for Future Medical Costs
If your injury requires ongoing medical care, Medicare can require you to establish a Medicare Set-Aside Arrangement (MSA) to cover future accident-related medical expenses. This is common in workers’ compensation and catastrophic injury cases, where extended medical treatment is expected.
Mistakes That Hurt Your Settlement
It’s rare that the victims of personal injury are aware of errors they commit that harm their settlement when Medicare is involved. These are some of the key blunders to be on the lookout for:
- Failure to Report Your Claim: If Medicare does not receive timely notice, they can deny payments or pursue action against you in the future.
- Disregard for the Medicare Lien: If you exhaust your settlement without reimbursing Medicare, you can be held personally responsible for double the debt.
- Failure to Review the Conditional Payment Letter: Medicare’s errors in estimation can lead to overpayments—double-check all of the items on the list.
- Late Payment to Medicare: Medicare is highly timely. Late payment failure could result in penalties, fines, or lawsuits.
How a Florida Personal Injury Attorney Can Help
It is not easy to navigate the Medicare Secondary Payer Act, and noncompliance will cost you a big penny. That is why it is best to have an experienced Florida personal injury lawyer handle your case. Here is how this attorney can help:
- Ensure Medicare Compliance: Your attorney will handle all the communications with Medicare so that your settlement process is federal-regulation-compliant.
- Negotiate Decreases in Liens: Veteran attorneys are better able to negotiate the reduction of Medicare’s claim so that you receive more of your settlement.
- Avoid Settlement Delayed Payments: An experienced attorney will make the reimbursement process faster so that you get your money sooner.
- Keep You Safe from Legal Liability: Your attorney will ensure that Medicare’s lien is satisfied so you won’t be subject to possible lawsuits or fines.
Conclusion: Be Proactive and Protect Your Settlement
If you are a Medicare beneficiary pursuing a personal injury claim in Florida, it is well worth understanding the Medicare Secondary Payer Act to avoid expensive mistakes and delays. Medicare’s right of reimbursement makes it so that failing to address its lien appropriately can have a devastating impact on your ultimate settlement.
With the guidance of an experienced personal injury lawyer, you will be able to navigate through the Medicare payment process effectively, reduce your payment obligation, and make sure you recover the full settlement you deserve.
If you’ve been involved in an accident, call Jaime “Mr. 786Abogado” Suarez today to Get You Paid!
