How Many Files Can Medicare Open for One Lawsuit?
Most lien holders have one file for all of an individual plaintiff’s settlements. Medicare can have multiple for each of an individual plaintiff’s settlements.
Medicare’s process has its roots in something called Section 111, or Mandatory Insurer Reporting. That law requires all defendants notify Medicare of payments they make, whether they are paying voluntarily (like Med-Pay or PIP), through a settlement, or through a judgment. The table below shows how the various types of scenarios that lead to a Medicare file:
|Defense Payment Type||Medicare File Type||Who is Responsible?|
|PIP/Med-Pay (Voluntary Pay)||CRC – No-Fault||Carrier|
|PIP/Med-Pay (via Settlement/Judgment)||BCRC – No-Fault||Plaintiff|
|Work Comp (Voluntary Pay)||CRC – Work Comp||Carrier|
|Work Comp (via Settlement/Judgment)||BCRC – Work Comp||Plaintiff|
|Liability or Bodily Injury (via Settlement/Judgment)||BCRC – Liability||Plaintiff|
|Underinsured Motorist Coverage (via Settlement/Judgment)||BCRC – Liability||Plaintiff|
|Uninsured Motorist Coverage (via Settlement/Judgment)||BCRC – Liability||Plaintiff|
|Additional Defendant in Liability (via Settlement/Judgment)||BCRC – Liability||Plaintiff|
Click here for an explanation of Medicare’s different agents, including the CRC and BCRC.
While it is impossible for all eight scenarios to occur together, we frequently see 2-3 of those occurring in motor vehicle accident cases. For example, a Michigan driver may have his own PIP coverage, litigation against the defense’s bodily injury/liability coverage, and litigation for his own underinsured motorist coverage. This trio of coverages leads to a need for four Medicare files:
- CRC – No-Fault;
- BCRC – No-Fault (upon settlement);
- BCRC – Liability for the bodily injury/liability coverage; and,
- BCRC – Liability (another) for the underinsured motorist coverage.
In medical malpractice cases, a plaintiff may sue the hospital and a doctor separate for her injuries. That scenario may lead to two separate settlements with two insurance carriers. Those two carriers will report settlement separately. There are some tricks to stick to one Medicare file, but without those tricks you will see:
- BCRC – Liability (for the hospital’s coverage); and,
- BCRC – Liability (for the doctor’s coverage).
Can Medicare Come After My Settlement?
The answer is always YES – with a few exceptions. All of those exceptions start with one question: did you recover for medicals in your settlement?
There is considerable case law making this question far more complex than it’s eight words alone. That case law boils down to something like: if you could legally claim medicals, and you at any point claimed those medical damages1, or you legally released those medicals (including a general release) then Medicare believes it has a right to recover. Disagree? You’ll have to go through four levels of Medicare appeals before you can file suit in federal court. Those appeals can take five years.
If you are willing to play by Medicare’s rules, your proof that no medicals are included in the settlement is simple. You will need to include a copy of the release (settlement agreement) showing that medical damages are not part of this settlement.
Certain circumstances prevent a plaintiff from legally claiming medicals in a case. The easiest example is in Michigan, where certain drivers carry unlimited No-Fault/PIP policies for their auto insurance. If PIP is unlimited, a Michigan driver generally cannot claim medical damages in her bodily injury (liability), underinsured motorist, or uninsured motorist cases. Medicare will accept this scenario; however, only after opening its file and making a claim.
Wrongful death scenarios are statute dependent. Does the statute allow you to claim medical damages in the wrongful action? If yes, case law suggests you must never claim medical damages and never release them otherwise Medicare can claim its lien.
Changes in Michigan Law
Interestingly, Michigan recently changed from requiring all drivers to carry unlimited PIP, to making the unlimited nature optional. In these circumstances where a plaintiff’s PIP is limited, Medicare and other lien holders will now be entitled to its lien for all settlements, even in liability. This rule is the same as the other 49 states who have limited (or no) PIP/Med-Pay coverages.
Ryan Weiner, COO of MASSIVE will present at Michigan Association for Justice (MAJ) virtual Lunch and Learn on “Liens After No-Fault Reform”. Be sure to register so you don’t miss this chance to learn how to properly investigate and resolve the many insurance liens possible so that you can protect your clients and your law firm.
1 “If you at any point claimed medical damages” includes initial complaints that are superseded by amended complaints.