By Antoinette B. VanSchaick, PP, PLS-SC

So, you took on Mrs. Jones, a 70-year-old woman, who was in a rear-end collision and was badly injured. You have prepped the case for trial, and jury selection is about to begin. Then defense counsel makes an offer you cannot refuse—his client’s entire insurance policy in the sum of $300,000!

Good news, right? Of course, it is. Your firm is spared hours of continued trial preparation and thousands of dollars in expert witness fees. Your client is spared the emotional turmoil of a trial, and the firm is finally collecting its contingency fee.

All good news . . . unless Mrs. Jones is a Medicare beneficiary. So what, you may ask. So, Medicare gets a piece of Mrs. Jones’ settlement if it paid any of your client’s medical expenses related to the treatment for the injuries she suffered as a result of her car accident.

If Medicare is not reimbursed for what they paid out, what can happen? Mrs. Jones and/or the attorney (and firm) can be held financially responsible for those expenses and Medicare can refuse to pay for any further treatment related to the injuries she sustained in the accident, like future surgeries, etc.

How can you make sure this does not happen?

First, make sure that you check with your client to see if she is a Medicare beneficiary and if Medicare paid for any of the medical treatment related to the injuries she sustained in the accident. If the answer is yes, you need to report your client’s case to Medicare Secondary Payer Recovery Contractor (MSPRC) and have the case established.

Once the case has been established, MSPRC will send a letter to you that does the following: confirm that the case has been established in their system and a case number has been assigned; explain your client’s rights and responsibilities; and inform you that they will provide you with the amount your client owes within 65 days from the date of this letter, which is usually referred to as the “Rights and Responsibilities Letter.”

After you have received a Conditional Payment Letter with the amount that MSPRC claims is owed, go over the amount with your client. Make sure the amounts paid are specific to the accident-related injuries. If they are, you must enter this as a lien on the settlement proceeds.

As the case progresses, you can request periodic updates but, each time you request an update, it will take approximately 65 days to get that information from MSPRC.

The good news is that you have options once MSPRC provides you with the amount your client owes. First, if the settlement is less than $25,000, you can self-calculate the client’s final conditional payment. For more information on this, check out www.msprc.info.

If the settlement is more than $25,000, you need to provide MSPRC with a copy of the settlement agreement from the third-party payer showing the total amount of the settlement and the client’s closing statement reflecting the actual amount of the attorney’s fees and costs (excluding medical bills). MSPRC may reduce the payment amount based on this information. Again, for more information, check out www.msprc.info.

If MSPRC will not reduce the settlement or accept the self-calculated amount, you may appeal but you would be required to continue to hold a percentage of the settlement from distribution until the appeal has been resolved.

If you did not contact MSPRC to obtain this information in the early stages of the lawsuit, your firm should hold a percentage of the settlement from distribution until you have received the Conditional Payment Letter from MSPRC.

The moral to the story is:  don’t forget Medicare or else! How? If you do not already, make MSPRC a part of your intake and file set-up routine, and be sure when you are sending out those HIPAA-compliant authorizations for medical records, you request your client’s medical records too! You will save yourself and your firm a lot of time and reduce the amount of stress when it comes time to distribute the settlement funds.”

Image credit: Flickr/TheMayFirm2