Medicare Reimbursement: What Happens When You Overpay Medicare?


In a personal injury lawsuit, there is a health insurance carrier responsible for health care bills. If your client is covered by Medicare at the time of your injury you must report the injury to Medicare and your client will likely owe them for part of that care. If you happen to overpay Medicare during this process you are likely to wait a long time for a refund. Of course, if you owe them money they will notify you and institute swift, severe action against you or your client to collect on money owed to them. Medicare can report the debt to the U.S. Department of Treasury which may cause a hold or suspension of your medical benefits, a hold on your tax refund, and will apply accrued interest charges to the money they deem to be owing to them. Needless to say that amount may not be accurate at the time of these actions and cause further delays in ascertaining that amount.

MASSIVE had a case where we completed lien resolution with Medicare and the MSPRC had issued a final lien demand. Once a final lien demand is issued the plaintiff must pay Medicare in full within 60 days, otherwise interest on any remaining balance accrues at a rate of 11.25% per year. As the plaintiff’s attorney, you do have the right to file an appeal or waiver (within 120 days); however, you nonetheless must pay the amount owing to the MSPRC within the 60-day time frame to avoid interest charges. Keep in mind a response on any appeal or waiver usually takes well beyond the 60 day payment time frame. In this case, we paid the full amount of the lien within the required time frame. In the meantime, we successfully appealed the lien, reducing it down by almost $10,000, or, 75 percent. This meant that Medicare owed our client $10,000. Most of the time, a lien reimbursement check takes about six weeks to process from the MSPRC accounting department. The MSPRC official time frame remains 10-14 weeks for a reimbursement check. At MASSIVE, we are familiar with the practices at Medicare and always follow-up to make sure that actions are completed within the requisite time frames. We followed up in this instance only to find out that the MSPRC had not only been late in preparing the reimbursement check, but also that it had failed to process the check at all. At this point it had been almost 6 weeks since the reimbursement had been agreed to by the MSPRC. It had been 10 weeks since MASSIVE sent the Medicare lien dispute. We requested a discussion with a MSPRC supervisor. Unfortunately, he told us that there was no way to rectify the mistake and that it would take another 6 weeks to issue the check. Based on the current rules and regulations, this is the best possible outcome. Too bad the client had to wait for his money.

The MSPRC and Lien Resolution’s Double-Standard:
This is where the double-standard becomes relevant: What happens to the interest the Federal Government collects on that money that rightfully belongs to the client? The MSPRC received it promptly from the client. The client did not let it sit in his own account, accumulating interest for 12 weeks. But the MSPRC will have had this money that does not belong to it in its accounts for nearly a quarter of the year. It will collect interest. I asked the representative from MSPRC about the interest that had accrued and if our client would be reimbursed for that loss. He thought this was humorous. Needless to say there should be some way to hold MSPRC accountable for these kinds of errors. I have considered a lawsuit under the Federal Tort Claims Act. What can you do to avoid these consequences for you and your client?

MASSIVE can assist you and your clients in maximizing collection of settlement funds, allow for a faster distribution and enable you to focus on your cases without the time and expense of interaction with Medicare officials once this scenario occurs and hopefully avoid it all together. Contact MASSIVE for all your healthcare subrogation needs.