Personal Injury Law

Medicare Liens Ruling

Medicare liens are the bane of personal injury lawyers trying to reach a settlement. Settlements don't and can't parse out pain and suffering damages for medical bills. What goes to the wrongful death claim? What goes to the survival action? If you get a verdict at trial, this all gets resolved. But with undifferentiated settlements it is hard to determine what money would have gone where.

Usually, the bigger problem is not that Medicare won't reasonably reduce its lien. It is the cart before the horse logistics - it is virtually impossible to settle the lien before the case resolves, leaving clients up in the air and at Medicare's mercy as to what their actual recovery will be. It would help settle personal injury cases with Medicare liens if clients could have a more clearly ceiling as to what the lien amount might be. The 11th Circuit Court of Appeals provided a little help on this with a recent opinion.

The case was a Florida nursing home bed sore wrongful death case that settled for $52,500. (This was apparently the nursing home's policy limit, which makes no sense to me.) Medicare had paid the medical bills so the plaintiff's nursing home attorneys invited Medicare to participate in the settlement. Medicare did what I would not expect it to do in Maryland, claimed the entire amount. It also declined to participate in the probate hearing to divide up the settlement. So the trial judge moved along, valued the case over $2.5 million and cut Medicare's lien to $787.50.

The 11th Circuit ruled that Medicare does not have the right to claim full reimbursement from an undifferentiated settlement. The court found that Medicare must participate in any state-authorized process to prorate its lien claim or accept the result when it refuses to participate.

Full post as published by Maryland Injury Lawyer Blog on October 11, 2010 (boomark / email).