Heyl Royster

 


Heyl Royster

 

Personal Injury Firm Settles with Gov't. for Failure to Reimburse Conditional Payments to Medicare

written/published: January 2020

By: Brad Peterson, bpeterson@heylroyster.com

A recent settlement between the United States Department of Justice and a Philadelphia personal injury firm serves as a stark reminder how careful litigants must be when it comes to potential Medicare conditional payments. Medicare has a priority right of reimbursement for any medical expenses it paid that should have been paid under workers’ compensation or which was recovered in a civil settlement. Responsibility for satisfying the conditional payments is demonstrated by (1) a judgment; (2) a payment conditioned upon receipt of compromise, waiver or release; (3) any other means including, but not limited to a settlement award or contractual obligation. 42 CFR § 411.22 (b). The legal duty to reimburse Medicare for its conditional payments applies not only to insurers, but to anyone receiving proceeds from the settlement or judgment including claimants and their attorneys. As a Philadelphia law firm has recently learned, the amounts need not to be significant to trigger the U.S. Attorney’s Office to seek enforcement of the Medicare Secondary Payer Act.

On January 8, 2020, United States Attorney for the Eastern District of Pennsylvania announced a settlement with the firm of Simon and Simon, PC, for the firm’s failure to reimburse conditional payments. Between 2014 and 2019, Medicare made conditional payments satisfying injury related medical bills for 8 of the firm’s clients. The U.S. Attorney noted that any entities who receive the settlement or judgment proceeds, such as the injured party’s attorney, are obligated to repay Medicare within 60 days for its conditional payments. According to the press release, Simon and Simon failed to reimburse conditional payments totaling $6,604.59. Take note that this amount involved 8 clients and therefore the average amount per client was less than $1,000. Notwithstanding the U.S. Attorney’s Office pursued Simon and Simon for their failure to reimburse conditional payments. According to the press release of January 8, 2020, the firm agreed to reimburse Medicare for the sum of $6,604.59. In addition, the settlement agreement obligated the firm to “(1) name a person responsible for paying Medicare Secondary Payer debts; (2) train the employee to ensure that the firm pays these debts on a timely basis; (3) review any outstanding debts to insure compliance; and (4) provide written certification of compliance.”

The press release from U.S. Attorney William McSwain concludes with the following reminder: “This settlement agreement should remind personal injury lawyers and others of their obligation to reimburse Medicare when they receive settlement or judgment proceeds for their clients. Lawyers need to set a good example and follow the rules of the road for Medicare reimbursement. If they don’t, we will move aggressively to recover the money for taxpayers.”

It should be noted that the U.S. Attorney apparently did not seek double damages under the settlement as could have been sought under the Medicare Secondary Payer Act. This case serves as a valuable reminder for all that potential conditional payments must be explored in every case and taken very seriously.