Skip to main content
Best PracticesMedicare

Addressing Medicare Supplement Liens

By September 2, 2021February 24th, 2022No Comments
Judge gavel and a blood pressure gauge

Q: If a person is on Medicare and a Medicare supplement plan like AARP, is the AARP plan also entitled to get reimbursed?

A: With Part D prescription plans, reimbursement is typically pursued. However, in New York State, Medicare Supplement plans are regular insurance with no rights in NYS under GOL 5-335 and therefore, no lien exists. Call us at 888-961-LIEN to discuss the specific laws in your state.

Q: When does a Medicare lien get triggered?

A: Medicare does not assert their recovery rights until they have received notice of the settlement of plaintiff verdict in a case.

In order for Medicare to have a lien, a number of conditions must be present:

  • The injured party must be Medicare-eligible;
  • Medicare must have paid for some accident-related admission or treatment; and
  • There must be settlement or plaintiff verdict.

While the case is ongoing, Medicare issues “conditional payment amounts.” These amounts are repayable to Medicare on the condition that the case settles or there is a plaintiff verdict.

Once settlement is reported to Medicare (be sure to report the gross settlement figure along with attorney fees and expenses) Medicare will perform its last and most thorough scan of charges and provide plaintiff with a “final demand amount” which does reduce the conditional amount by a percentage based upon attorney fees and expenses, pursuant to 42 CFR 411.37.

This Final Demand Amount does become a priority recovery. In fact, if the settlement proceeds have been received, and the demand goes unpaid, the debt, with monthly interest accrual may be referred to the Department of Treasury. Monthly Social Security payments can be offset by the debt. Also the government can pursue a claim for double damages.

Medicare will always find out about a settlement due to the insurer’s duty to report under Section 111 of the MSP Statute. It is best to get ahead of the mandatory reporting and take control of the recovery case or allow a third-party to handle it for your firm.

Best Practices Tip:
Even if an appeal or post-demand dispute has been submitted by Medicare, it may be best to pay the final demand debt if proceeds have been received.Paying of the demand amount prohibits interest from accruing or a referral to the Department of Treasury.
If the appeal is deemed successful by Medicare, they will issue a refund check for the difference of the amount paid and the reduction of the demand amount.

Q: What documents does Medicare need to open a case and issue a conditional payment letter?

A: Reporting cases to the Medicare contactor can be done in two ways: through the Medicare portal or by calling the Coordination of Benefits and Recovery Contractor.

In order for Medicare to open a recovery case you will need to relay the following details:

  1. Beneficiary’s Medicare number or Social Security Number;
  2. Beneficiary’s Date of Birth;
  3. Beneficiary’s Address (the address on file with the Social Security Administration);
  4. Date of Incident;
  5. Specific injuries claimed.
  6. Type of case (liability, no-fault or workers’ compensation).

With the above information Medicare will open a liability case and begin pulling claims for accident-related treatment provided to the beneficiary on or following the provided date of incident. These ledgers will be sent to the beneficiary at the address provided.

If you wish to receive copies of these ledgers, you will need to fax or mail to Medicare either an executed retainer agreement or a Proof of Representation agreement, executed by both the beneficiary and the attorney/firm.

The Proof of Representation will contain the firm’s address, and correspondences will be sent to the address provided in addition to the beneficiary.

If the beneficiary is deceased, certificate of death, letters testamentary and other documentation may need to be provided prior to being authorized on the case.

Meet the Author