If you have reached an asbestos cancer settlement with the company or companies that exposed you to this deadly human carcinogen, you probably are relieved. You will soon be able to obtain just compensation for your mesothelioma medical bills, lost earnings, and pain and suffering.
However, sometimes settling an asbestos claim is the most straightforward part when there is a Medicare lien involved. Medicare is called the payor of last resort. This means that every entity with a duty to pay, such as an insurance company, must pay before Medicare does. (Insurancejournal.com).
Payment will not be completed by Medicare if it could have been paid by another entity. If Medicare has made a payment, it has a right by private cause of action or subrogation to recover such payments. If you are a recipient of Medicare, you may need to reimburse the government agency before you are entitled to your asbestos claim settlement.
More information is below to understand how a Medicare lien can affect your asbestos claim.
Medicare, Medicaid and SCHIP (MMSEA) of 2007
MMSEA brought us what is argued to be the most significant and most demanding reporting requirements in the history of Medicare. MMSEA requires that all entities that pay judgments to any personal injury plaintiff (included a mesothelioma victim) report the information to the Centers for Medicare and Medicaid Services (CMS). (Allsupinc.com)
The reporting requirement puts anyone who handles the proceeds of a personal injury settlement at risk for damages and civil penalties. If the wrong person is paid, problems may arise. Therefore, parties to an asbestos claim settlement are not shielded by indemnity or hold harmless clauses in the release. Medicare’s right to recover is above every other interest.
U.S. v. Stricker
The U.S. government in December 2009 filed a lawsuit against two insurance companies and other defendants for violating the Medicare Secondary Payment Statute (MSP). The MSP is part of the Social Security Act that Medicare uses to assert the payer of last resort status it enjoys.
Defendants had reached a settlement agreement that resolved a significant toxic tort lawsuit that did not reimburse Medicare for conditional payments it made for personal injuries to several Medicare beneficiaries.
The U.S. government went after insurance and corporate payors instead of the individual Medicare beneficiaries. The case was dismissed because the federal government brought the lawsuit outside the statute of limitations. But it is essential to understand for asbestos claimants because it offers insight into how the U.S. government will proceed against any entity that is accused of violating the MSP.
The total settlement was $300 million. The federal government stated the defending companies knew or should have known that one or more claimant was eligible for Medicare and Medicare was eligible to recover conditional payments.
For the violations, the U.S. government wanted:
- Reimbursement for Medicare conditional payments
- Double damages
- Declaratory relief against all defendants, which required them to provide notice to CMS of any future payments to Medicare beneficiaries.
A Guide and Warning for Asbestos Claimants
The Stricker decision shows that insurers, attorneys and their asbestos exposure clients need to use caution when settling mesothelioma claims where there is a possibility that Medicare beneficiaries are included.
If you are attempting to settle an asbestos claim, your attorney should determine if anyone involved is a Medicare beneficiary. This can be done by using a formalized process to resolve, verify, and satisfy conditional payment reimbursements.
Stricker leaves many questions about CMS policy and procedures. Will the agency attempt reimbursement on a $25,000 asbestos claim settlement? It is something your attorney must be aware of, as it could affect how you are compensated.
How to Protect Yourself From a Medicare Lien
With the help of your asbestos exposure attorney, here are some tips to guard yourself from a Medicare lien in some situations:
- Determine if any of your medical expenses were paid by Medicare.
- Your attorney may try to write the settlement as paying for pain and suffering damages only. This is a way to circumvent a lien, but defense counsel may not allow this. Doing this also can be advantageous for tax purposes. Your attorney can tell you if this is advisable in your asbestos claim.
- The defense may try to put language in the agreement and release that you are responsible for payment of medical liens. If you see this language, talk to your attorney immediately.
- The settlement agreement will probably say that Medicare must be a co-payee because of the statutory lien. Your attorney may then consider proper Medicare reimbursement in his evaluation of the settlement.
How To Reimburse Medicare With Your Asbestos Claim Settlement
If you owe Medicare for some of your medical costs, you and your personal injury attorney should review all charges to ensure their accuracy. If they are right, your attorney will give a portion of your settlement to Medicare by check. Only after the settlement reimburses what is owed to Medicare are you entitled to the rest of the settlement. (CMS.gov)
Remember that once you have received your asbestos claim settlement, you may have to repay benefits and awards you got as a recipient of Medicare. If you do not pay these amounts, Medicare will have a lien and claim against your settlement.