If you get into a car accident, you’re likely going to suffer some pretty serious injuries. You’re going to need medical treatment. This may mean you need surgery or physical therapy. You may also need to get many series of medical tests done to see how bad your injuries are. Also, you may miss work for an extended period of time while you recover from your injuries.
Somebody has to pay for these medical expenses. In most cases, you’ll file a claim against the other driver’s insurance company. It may get paid within a week or two. Other times, however, the insurance company refuses to pay your claim.
Depending on the circumstances, your personal health insurance may cover the treatment. If they do, they’ll expect to be repaid at some point. But, sometimes, your health insurance isn’t going to be willing to cover your medical care. If they know there is a lawsuit involved, they may insist the other driver’s insurance be responsible.
In the meantime, you still need medical care. If your injuries go untreated, they can get much worse. They could even kill you. So, who pays for your treatment if there is no primary payer willing to do so? In most cases, Medicare steps in and handles this.
If you get hurt and insurance won’t pay for your medical treatment, Medicare may agree to make a conditional payment for your care. They may have to step in and make multiple payments, depending on how bad your injuries are.
Medicare doesn’t do this out of the goodness of their hearts. They expect to be reimbursed at some point. When you ultimately settle your case, you’re going to have to pay Medicare back. This isn’t optional. In fact, Medicare makes sure of that.
When Medicare provides conditional payment for your medical care, they file a lien against your personal injury case. These liens will have to be repaid once your case settles or you get a jury award. If your personal injury attorney doesn’t do this, Medicare will come after you personally for the money. This is where the Medicare Lien Resolution attorneys at Massive step in.
What is a Medicare Lien?
Let’s say you get into a car accident. The other driver’s insurance company denies your personal injury claim. Your personal auto insurance policy only covers the first $50,000 in medical bills. By the time you’ve been treated for all of your injuries, you’ve racked up over $400,000 in medical bills.
You can’t pay these yourself. Very few people could. The good news is, you don’t have to. If your insurance won’t pay any or all of your medical care, there is a solution. Medicare or Medicaid will step in and help.
If there is no primary payer willing to pay for your medical treatment, Medicare will make conditional payments on your behalf. The primary payers who normally pay for these expenses but won’t in a personal injury case include:
- No-fault insurance
- Workers compensation
- Liability insurance
Now, Medicare is only going to pay for medical treatment related to your accident. They’ll track every payment made. This is because they expect to be reimbursed at some point. They’re not going to simply write off the money they put out on your behalf.
The way they secure their repayment is by filing a lien against your personal injury case. Personal injury attorneys understand this process and are used to dealing with Medicare liens. It used to be very difficult to track which expenses Medicare paid and which ones they didn’t.
In 2013, a new law was passed that makes this a lot easier for personal injury attorneys. Thanks to the Strengthening Medicare and Repaying Taxpayers Act (SMART), Medicare offers online access so your lawyer can track how much has been paid on your behalf.
Your lawyer needs this information if he intends to settle your case. Since Medicare typically requires that the full amount of the lien be repaid, your lawyer needs to account for this in any settlement negotiations. He needs to make sure your settlement amount is higher than the Medicare lien amount.
For example, in the above case, let’s say your medical bills were $400,000 and Medicare made conditional payment of these bills. You sue the defendant for $800,000. Your attorney starts settlement negotiations with the defendant’s lawyer. You know you’re going to have to pay Medicare back the $400,000. You don’t want to settle too low or you won’t have anything left after reimbursing Medicare.
What Happens When You Settle Your Case?
If you get into any kind of personal injury accident, you’re probably going to settle your lawsuit. More than 90% of all cases eventually settle. Very few actually make it to trial. This is because trials are expensive and time consuming. It’s in everyone’s best interest to settle out of court.
Whether you settle your case or get a jury award, Medicare will be notified. The agency that handles Medicare liens is called the Benefits Coordination and Recovery Center (BCRC). As soon as they learn that your case has been resolved, they’ll issue a demand letter.
This demand letter will state the total amount of the Medicare lien. They’ll notify your attorney that this amount needs to be repaid within sixty (60) days. They’ll start charging interest on the date the demand letter is issued.
If you pay the full amount within the 60 days, the interest won’t be added to your case. However, if you don’t pay it on time, the interest will accrue and will have to be repaid. If it isn’t, your Medicare lien won’t be replaced.
When you get your demand letter, you’ll have a few options. The Medicare lien resolution specialists at Massive know all of the options and will advise you of the best course of action for your specific case.
What Options are Available to Resolve Your Medicare Lien?
Once a Medicare lien is placed against your personal injury case, it has to be resolved. This means it has to be paid or resolved in some other way. When it comes to resolving your Medicare lien, your personal injury attorney does have a few options.
The first thing he can do is fill out a waiver request. In some cases, you can ask Medicare to waive part or all of their lien. In order for them to do this, you have to meet one of the following two requirements:
- It was not your fault that Medicare made the conditional payments in the first place or
- Repaying the lien will cause a financial hardship
It is very difficult to prove either of these criteria. And, if you’re found partially at fault for your injuries, there is no chance of getting a waiver.
The other option is to try to negotiate a reduced settlement amount of your Medicare lien. This is more feasible. Your attorney will reach out to the BCRC and try to get the amount reduced. The best way to do this is to show that some of the expenses covered under the lien were not related to your personal injury case.
For example, let’s say your personal injuries were related to your back. During the course of treatment, the doctors discover you have something wrong with your wrist. They perform tests to see if this is true. Medicare pays the expenses for these tests even though they’re not related to your accident. You won’t be responsible to pay back this part.
Your attorney will have to go through the SMART report to see if any of the conditional payments were for unrelated medical care. If so, he may be able to get the lien reduced.
How is Medicare Paid?
When you receive your settlement payment, you have to take care of the Medicare lien. This is pretty straight forward.
If your settlement is less than $5,000, you can opt to pay a fixed percentage of your settlement amount. This percentage is 25%. So, if you settle for $5,000, you’ll have to pay Medicare $1,250.
In other cases, you’ll have to pay back the full lien amount less your attorney’s contingency. Most attorneys charge around 33% contingency fee. So, if your Medicare lien is $50,000, you would pay back the $50,000 less the 33% you paid your attorney. So, you would have to pay back roughly $33,000.
Your attorney should set aside the funds to make sure Medicare is paid off the top. Because they are considered a super lien holder, they are paid before anyone else. Here is a typical breakdown of an example settlement:
- Settlement Amount $100,000
- Attorney’s Percentage $33,000
- Medicare Lien is $20,000
- Subtract the 33% of the lien, which is about $6,600
- You pay Medicare the difference of $13,400.
- The rest is yours. So, out of your $100,000, you have to pay out a total of $46,600. You’ll get the difference of $53,400.
Of course, this is a simple example. But it should give you a good idea of how your settlement proceeds are paid out.
If you’ve been involved in any sort of personal injury and are dealing with a Medicare lien, call a Medicare lien resolution attorney right away. Our lien resolution lawyers can review your case and handle all of the lien issues. Call Massive today and schedule your free initial consultation.
Contact the Medicare Lien Resolution Attorneys at Massive
If you’ve been involved in any sort of personal injury and are dealing with a Medicare lien, call a Medicare lien resolution attorney right away. Our lien resolution lawyers can review your case and handle all of the lien issues. Don't wait until Medicare is taking collective action on your lien to call, it may be too late. Additionally, interest begins accruing as soon as the demand letter is sent. On liens involving large dollar amounts, this interest can accumulate quickly and will further deduct from the amount you receive from your settlement. Call Massive today and schedule your free initial consultation.