Paying Back Medicare After a Lawsuit

Medicare LiensMedicare recipients who file personal injury lawsuits need to be aware that by law they will have to pay Medicare back from their judgment or settlement. Unlike cases where private health insurers seek repayment, cases involving Medicare liens offer lawyers very little (to no) wiggle room in negotiating the liens down. Medicare’s lien is often referred to as a “super lien” for this reason, and due to Medicare’s ability to seek repayment not only from the plaintiff, but also the defendant — even if the defendant has paid a settlement to the plaintiff. Medicare can even seek double the amount of its lien if it is not reimbursed. Accordingly, defendants have a particular interest in ensuring that a plaintiff’s Medicare lien is properly resolved. While calculating and resolving Medicare liens in most personal injury cases is a straight-forward and simple process, in many others lawyers will run into unresolved, unclear, or downright unfair legal issues which could drastically effect their abilities to settle the cases at all.

Paying Back Medicare in Most Personal Injury Cases

In personal injury cases involving one defendant who is entirely at fault and has adequate liability insurance policy limits to pay a fair settlement, plaintiffs must repay the full amount of the Medicare lien, reduced by the same percentage which the plaintiff had to pay his attorney in fees and costs. For example, in a case that settles for $50,000.00 involving a $20,000.00 Medicare lien and a 1/3 attorney fee and $1,500.00 in costs, Medicare will reduce its lien by 36% (the same percentage of the total settlement the plaintiff paid in attorney’s fees and costs), making the final amount the plaintiff needs to pay Medicare $13,333.33.

Medicare will not reduce its lien to account for the fact that you settled your case for less than full value. State anti-subrogation laws and common law rules commonly used to reduce health insurance liens, like the “make whole” doctrine, do not apply to Medicare. If you settled your case without using a lawyer, you can only obtain a reduction for your actual costs (on a percentage basis as described above) — you get no credit for the attorney’s fees you avoided incurring.

Of course, you only need to repay Medicare for accident-related treatment. Sometimes Medicare claims a lien for treatment which it believes to be accident-related (based on doctor’s billing codes), but really isn’t. Therefore, before submitting a request to Medicare to reduce its lien for attorney’s fees and costs, your lawyer needs to make sure that all the treatment Medicare has attributed to the accident is legitimate. Having Medicare remove the cost of unrelated treatment from its claimed lien is usually not too difficult, but may involve having to submit supporting medical records (or a doctor’s statement) proving that the treatment was not for an accident-related injury.

The time it takes to ultimately resolve a Medicare lien can vary from case to case, and it will be longer if Medicare is claiming a lien for unrelated treatment. Ideally, in straightforward cases that meet the criteria stated above, the lien should be resolved within 120 days (often sooner) of settlement. However, don’t be surprised if it takes longer. Your lawyer can help avoid delays by regularly requesting updated lien information and challenging unrelated items as they appear, rather than waiting until the case has settled.

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On January 10, 2013, the Medicare SMART Act was passed into law, which will hopefully make the lien resolution process move along more quickly. The SMART Act requires Medicare to set up a website that allows lawyers to obtain official up-to-date Medicare lien information, and use the information provided by the site resolve plaintiffs’ liens. This will save considerable mail and processing time over how this is currently handled. The SMART Act also imposes fixed deadlines for Medicare to provide lien information and to resolve disputed items — this provision became effective immediately and applies to current claims. The SMART Act also imposed a (previously non-existent) statute of limitations on Medicare filing suit over an unpaid lien — it has 3 years from the date it receives notice that the plaintiff’s case settled. This statute of limitations applies to all suits filed on or after July 10, 2013.

Paying Back Medicare in Small Cases

Medicare liens must be repaid in all cases that settle for more than $300.00 (they waive recovery for nearly all cases that settle for $300.00 or less), but Medicare has a special fixed percentage option for cases that settle for $5,000.00 or less. This may be particularly attractive for plaintiffs who are trying to settle small claims on their own. In these cases, regardless of the size of the Medicare lien, Medicare will accept 25% of the total settlement amount to resolve its lien. To ensure that you qualify for this option, see this document (pdf warning) (alternate download link) from the Medicare Secondary Payer Recovery Contractor (MSPRC).

For example, if a plaintiff has a $10,000.00 Medicare lien, but may have issues involving liability or something else which causes him to believe that a $5,000.00 settlement of his personal injury case is fair, he could resolve his full Medicare lien for $1,250.00 (25% of the $5,000.00 settlement). Note that if you have an attorney, Medicare will not further reduce its lien by the percentage you paid in fees and costs if you choose the fixed percentage option. So, if the same plaintiff who obtained the $5,000.00 settlement had to pay his attorney $1,700.00 in fees and costs, he would still have to pay Medicare $1,250.00 if he chooses the fixed percentage option. Of course, this is still a better deal for him than not choosing the fixed percentage option, as Medicare would only reduce its lien to $6,600.00 (a 34% reduction) under its ordinary reduction method.

Paying Back Medicare When the Plaintiff is Partially at Fault

Not all personal injury cases involve a defendant who is 100% at fault. If the plaintiff is partially at fault for his own injuries, a Medicare lien can make settling his personal injury case particularly difficult, if not downright impossible. This has to do with the difference between how Medicare considers a settlement agreement versus how it considers a judgment. While Medicare will accept an apportionment as to percentage of fault and types of damages (medical vs. pain and suffering) established by a judgment, it will completely ignore such an allocation agreed to by the parties in a settlement agreement.

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Therefore, even if your lawyer and the defense attorney agree that you were 50% at fault, and that only $15,000.00 of your $35,000.00 settlement is attributable to past medical bills — and even if this allocation is perfectly reasonable and not a clear attempt to avoid paying the full Medicare lien — Medicare will assert its lien up to the full amount of the settlement (minus attorney’s fees and costs). So, if you have a $32,000.00 Medicare lien and you settle the case as described above, you could wind up with nothing after you pay your lawyer and Medicare.

However, if that same amount of past medical bills was determined at trial and resulted in a judgment, Medicare would only assert its lien against that $15,000.00. As you can see, this creates a serious impediment to settling certain cases involving Medicare liens. Therefore, some personal injury lawyers may refuse to handle such cases because they know that a trial would be required to obtain a fair amount for the client. It makes better business sense to them to avoid that case and only accept cases that can be settled.

From a policy standpoint, Medicare’s total refusal to honor allocations of damages defined in settlements could result in it not being repaid anything for such cases. If plaintiffs’ lawyers don’t want to take these cases because they necessitate trials, the plaintiffs may never recover anything from which Medicare can be repaid. Medicare itself just doesn’t have the manpower to discover and pursue such claims on its own, resulting in both the plaintiff and Medicare walking away empty handed. Medicare needs to adopt a process by which it can review and approve proposed settlement allocations to avoid this situation, but pleas for such a process from plaintiffs’ lawyers have to date gone unanswered.

Paying Back Medicare When the Defendant Doesn’t Have Adequate Insurance

A particularly nightmarish scenario for plaintiffs and their lawyers arises when the plaintiff has a Medicare lien and the defendant doesn’t have adequate liability insurance to pay a fair settlement or judgment. While private insurers will almost always take into account the fact that a plaintiff failed to make a fair recovery due to inadequate policy limits and reduce their liens accordingly, Medicare probably won’t. These types of cases may be impossible to settle (if your goal is to get the plaintiff any money) because of Medicare’s obstinance, resulting in lawyers rejecting these cases outright and Medicare recovering nothing at all.

While Medicare does have a process by which a claimant can request a waiver of repayment (in part or full), this process can’t even be started until after the claim is settled, making it a gamble that most lawyers aren’t willing to take. To make matters worse, you typically have to pay the full amount requested by Medicare while the waiver is being considered, as you can be responsible for penalties and interest if the payment isn’t made within 60 days of Medicare’s final demand and the waiver is later denied. Waivers are rarely granted, so don’t get your hopes up about getting one just because you think fairness requires it.

Medicare Set-Asides for Future Damages in Personal Injury Cases

A Medicare Set-Aside (MSA) is an amount of a settlement specifically placed in a special account to pay for future accident-related medical treatment. For years, MSAs have been required in all workers compensation cases where the claimant is either currently receiving Medicare or is likely to in the near future. Recently, there has been considerable debate in the legal community as to whether lawyers should create MSAs in personal injury cases. While Medicare has a specific process for obtaining prior approval of an MSA amount in workers compensation cases, it does not have any such mechanism for personal injury claims.

This is likely due to the fact that workers compensation settlements are easier to review. They require judicial/administrative approval, specifically set forth the amount of future medical expenses expected and the basis therefor, and don’t involve any pain and suffering damages. Personal injury settlements, on the other hand, normally don’t require judicial approval, don’t specify any allocation of the money to past/future damages (and when they do, they don’t have specific medical records cited in support of such an allocation), and include pain and suffering damages, which are extremely speculative.

Settlement tip

For these reasons, it seems that Medicare doesn’t want to have to review every settlement agreement in personal injury cases because it would involve scrutinizing tens of thousands of agreements per year in which both the plaintiff and defendant have an incentive to lie about the amount of future medical damages (lowball them) in order to settle the case.

This is why, despite the fact that MSAs are technically required for personal injury cases, they are rarely done — and rarely questioned by Medicare. This doesn’t mean that they aren’t legally required — just that if you don’t create one, odds are in your favor that Medicare won’t question the fact or cut off your future Medicare benefits.

I would caution plaintiffs with Medicare liens who take their cases to trial, however, that verdicts and judgments usually specify the amount paid to you for future medical care, making it easier for Medicare to determine the amount that should have been placed in an MSA. This may make it more likely that Medicare will cut you off if you don’t use that money to pay your future accident-related Medical bills.

Obviously, the safest course of action for plaintiffs is to create an MSA in every personal injury case involving a Medicare lien and expected future medical treatment (if you don’t need future treatment for your accident-related injuries, an MSA is unnecessary). However, most plaintiffs are willing to risk not doing so in light of Medicare’s lax and inconsistent enforcement of this requirement — and the fact that this can mean a difference of tens of thousands of dollars that they can spend on other things. If you take that risk, as most plaintiffs do, it would be wise to hold onto a portion of your settlement until you are convinced that Medicare isn’t going to cut off your benefits (see how it goes for several months, at least).

Do Medicare Advantage Liens Work the Same Way as Medicare Liens?

Medicare Advantage providers will often bluff plaintiffs and their lawyers by claiming that their liens are the equivalent of Medicare “super liens”. This is not true. Reimbursement of Medicare Advantage providers does not fall under the same federal law as reimbursement of traditional Medicare. Medicare Advantage liens are more like standard private health insurance liens than Medicare liens. This opens up the possibility of reductions to (or elimination of) Medicare Advantage liens under state anti-subrogation laws and common law rules like the “make whole doctrine”. As with traditional private health insurance liens, a lot depends on your state’s laws and the language of your Medicare Advantage policy.

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115 Responses to Paying Back Medicare After a Lawsuit

  1. eg says:

    Blue Cross of Michigan is putting a lien on my uninsured motorist settlement. Blue Cross of Michigan is my medicare advantage plan. My insurance company is waiting to see if there is another lien from orginal medicare before issuing the check. How could they both seek reimbursement if the medicare advantage plan is my medicare?

    • fl_litig8r says:

      As long as you receive all of your benefits, including the prescription drug benefits, through your Advantage plan, there won’t be a Medicare lien. Your insurer is just being extremely cautious because Medicare liens, commonly referred to as “super liens”, have severe penalties for non-payment. If they pay you and it turns out there’s a Medicare lien (which you don’t pay), they could be required to pay that as well, even if they’ve already paid out policy limits and gotten a full release from you.

  2. Gennie says:

    This is a question not related to medicare, but I’m not sure who else to ask. I was a passenger in an accident in late January 2011 in Arizona, with soft tissue injuries (neck). Medpay paid for everything (bills under 5K), and I stopped treatment in 2012. It’s time to settle with the at-fault driver’s insurance (I have a few weeks left before the statute of limitations runs out), but I’m still noticing pain (neck and hip). This could be from the accident, or from sitting too much at work, or both. The doctor wants to order an MRI. If I settle before getting the MRI, will medical providers and my health insurance attribute the MRI and any other bills to the accident and decide I need to pay the full amount myself because the claim has already been settled? Or do they stop attributing medical bills to the accident once the claim has been closed?

    Thanks so much for your help!

    • fl_litig8r says:

      Usually, health insurers who have been paid back for past treatment at the time of settlement won’t try to stiff you with respect to future treatment, even if it might be accident related. I discuss this in some of my responses to comments on this article, which deals with paying back private health insurers. In your case, where there has been a significant gap in treatment from the last time you needed to see a doctor for your neck, I would think that the risk of the health insurer refusing to pay is minimal to non-existent — they just wouldn’t want to risk you suing them because you have a fair argument that the treatment is not accident-related.

      The risk of them seeking reimbursement for the MRI and subsequent care should you settle after receiving that care is greater than the risk of the health insurer refusing payment if you receive the care after your claim has settled. The better bet is to settle and then get the treatment you need — I don’t think the insurer is likely to question your future care as long as you paid them back for any treatment received prior to the settlement (assuming you are required to repay them by law, which varies, as discussed in this article).

  3. chow says:

    In August 2011, I was involved in a car accident. I received medical care and exhausted all of my medpay effective January 2012. In May 2013, I filed for Chapter 7 and listed the medpay intended for reimbursement to the insurance company on Schedule F. The insurance company did not show up at the meeting of the creditors to dispute the action. In August 2013, the Trustee indicated that the potential proceeds from the personal injury case was not enough to cover the excessive liability that I had and the bankruptcy was fully discharged. Am I entitled to the medpay, since it is covered under the bankruptcy?

    • fl_litig8r says:

      I’m a little unclear as what you’re asking. You said that your medpay was exhausted, but then you ask if you are “entitled to the medpay” in your question. Are you asking whether you can keep the portion of the settlement which would have gone to paying back your medpay carrier due to the medpay carrier’s lien being discharged through the bankruptcy? If so, then it really depends on whether the terms of your bankruptcy allow you to keep any of the settlement at all. Often, settlement proceeds just go to the general creditors of the estate, even if they are inadequate to fully extinguish the debt.

      • chow says:

        Yes, I’m asking whether I can keep the portion of the settlement which would have gone to paying back my medpay carrier due to the medpay carrier’s lien being discharged through the bankruptcy. When the Trustee reviewed the PI case in conjunction with the ch 7, he determined that the potential settlement wasn’t enough to repay the creditors. He thus discharged all of the debt, including the medpay carrier’s lien that was listed on schedule F.

        • fl_litig8r says:

          If your lawsuit proceeds were not included as money that must be used to repay your creditors, and your medpay lien was discharged in the bankruptcy, then I would expect that you would keep the settlement proceeds and not need to repay the medpay carrier. Of course, I’m not a bankruptcy lawyer, so take my opinion for what it’s worth.

  4. deborah says:

    my question is this had gotten a loan from a loan funding co which now im getting a ettlement but im disable now and have a irrevocable aspecial need trust account can this company which is third party could they still get there money i was loan 2,000ut now it 17,000 how do i protect myself could i through my trust or what do you think?

    • fl_litig8r says:

      The problem will be that before your settlement money can be paid into your trust, it will be put in your attorney’s client trust account. You could be be putting your lawyer in a very tenuous ethical quandary if you instruct him not to honor the lawsuit loan. Ethics opinions from different state bars are all over the place about what a lawyer put in this position by his client should do. It may be that he has to pay the disputed amount into the court, through a process known as interpleader, and let you and the lawsuit loan company fight out on your own who the money belongs to.

      As to whether the loan company can get to the money if it is paid into a special needs trust, I really don’t know.

  5. Debbie says:

    Hi! My question isn’t related to this article, but I didn’t know where to put it. I’ve been assigned a paralegal for my personal injury case. a month and a half ago, i emailed her and asked her to request a disability rating. She told me she would update her records with the information i gave her and request the rating. Another dr wants to see the rating, so I asked for the rating 2 weeks ago. She said she would need to check, but she didn’t think it had come in yet. I asked again last week, she said it hadn’t come in, but i could call the dr. So, I called the dr, and they sent me everything they had.. but no rating. I emailed the paralegal and asked if it had been requested. She finally admitted that since someone quit she has been busy and hadn’t had time to request the rating yet. I feel like that is something that should have mentioned when i FIRST asked, not now. Is it acceptable to wait a month and a half for her to request something? Even if it is, she should have told me the truth when i first asked. How should I handle this? Do I email her and CC the lawyer?

    • Debbie says:

      oops! Sorry, i just realized i should have posted this in the article about paralegals. Sorry!!

    • fl_litig8r says:

      I’m not saying that what she did was right, but she did ultimately come clean about dropping the ball, which is a good sign. In truth, she may even have been covering for the lawyer, as most doctors charge the lawyer for writing a final report with a rating, so she may have been waiting on his approval to request the report. I think you’ll buy more good will with the paralegal, which will hopefully translate to her paying better attention to your case in the future, by just letting this one go, as opposed to making an enemy of her by trying to get her in trouble with the lawyer. If you make her dread communicating with you, she’ll probably try to avoid you in the future, which won’t help you move your case forward.

      If this type of problem happens again, then I’d make an issue of it. I’d either confront her with it directly or let the lawyer know that you’re not happy with how she’s handling your case. I wouldn’t CC the lawyer on an e-mail to the paralegal complaining about her performance — that seems pretty passive-aggressive. When you feel that the issue is bad enough that the lawyer needs to do something, just e-mail him directly and let him know. I would really try to work it out with the paralegal first, though. Take an understanding, but firm approach. Tell her “Look, I know your job is probably very stressful and hectic, and I don’t want to be that client that makes your life harder, but I really need you to be honest with me if a ball gets dropped, and I’m just asking that you fix it as soon as possible.” As long as she knows you’re not going to bite her head off, she’ll be more willing to let you know when things get delayed or inadvertently forgotten.

      While anger may be a justifiable response, it will often be counter-productive to your goal of open and honest communication in the future. Try to be gentle, but firm.

      • Debbie says:

        Ok, we have strike 2. I just got a call from the dr’s office. She requested the rating from the Dr i had seen months ago, not the dr i saw most recently and specifically requested a rating from (they are at the same practice)… despite MULTIPLE emails where i have specifically used this dr’s name. At this point, I’m just not sure I can trust her to get things right. What do i do?

        • fl_litig8r says:

          Well, that clearly depends on how much slack you want to cut her. It appears that she’s making an effort, but she may not be suited for detail-oriented work (or she could be overburdened with cases from a paralegal leaving and is getting sloppy). Obviously, you need to correct her. I’m more of a soft touch, myself, so if I didn’t think that telling her that while I appreciate her effort, she really needs to pay closer attention to details because her mistakes are really slowing down my case, I would ask the attorney to assign another paralegal to the case. There’s no need to be rude about it. Just tell him that this is the second time that her inattention to detail has caused a delay in getting this report, and while she may have own stuff that she’s dealing with, you’d feel better having someone else handle your case. If there is no one else, then I’d ask the attorney to personally pull her aside and have a talk with her about not sacrificing accuracy for speed.

          • Debbie says:

            Thank you for all your advice! I think it’s time to talk to the attorney. I have tried my hardest to be as polite as possible (even though it’s getting hard), but she’s not getting it. She actually asked me why i needed a rating from the Dr i requested and why i couldnt just get a rating from the Dr she requested it from. Enough is enough at this point. Its been 2 months since I requested this rating and we’ve gotten nowhere. Thank you again!!!!

          • fl_litig8r says:

            Because she wasn’t completely apologetic and instead asked why you couldn’t just go with the doctor she mistakenly sent the request to, I agree.

  6. k h says:

    We went through a facilitation. My attorney settled for 75,000.00 based on the assumption that medicare lien is in the amount of 5,213,77. I just received a payment summary from medicare stating liens are 21,000.00. How did my lawyer come up with such a low and exact amount? Nuquest bridge pointe is doing the negotiating. I personally haven’t signed anything yet. What are my options?

    • fl_litig8r says:

      By facilitation, I assume you mean mediation. As an initial matter, you’re not going to be able to get out of the settlement agreement if your own lawyer made a mistake about the medicare lien amount. The defendant will be able to enforce the agreement because it did not make the misrepresentation.

      I can’t say whether your lawyer or medicare is wrong with respect to the lien amount. Medicare may have included post-accident treatment you received that is unrelated to the injuries you suffered in the accident, and it will remove those charges from its lien once it is convinced that the treatment isn’t accident-related. For example, if you hurt your back in the accident, but while your claim was pending you also had knee surgery for an unrelated injury, medicare may have mistakenly assumed that the knee surgery was caused by the accident, and it will remove those charges once it is presented with proof that the knee injury wasn’t from the accident.

      If your lawyer did make an error, it’s possible that he reached his very specific figure by adding up amounts paid by medicare on medical bills in his possession and not by receiving the lien information from medicare itself prior to the mediation. If he didn’t have all the bills paid by medicare, he may have missed some significant charges. Either way, medicare will reduce its lien automatically to account for the percentage you paid your lawyer in “procurement costs” (the percentage of the total settlement going to attorneys fees and costs). So, if you are paying your lawyer a 33 1/3% fee, the $21,000 will be reduced to $14,000, so the damage isn’t as bad as you think.

      If it turns out that your lawyer made the error, and not medicare, I’d see if the lawyer is willing to eat some of the difference in the lien amounts by reducing his fee. I doubt that he’d be willing to eat the whole thing, because you’re still making a significant recovery over what your medical bills were, but I wouldn’t be surprised if he agreed to eat half of the difference. If you wanted to press the issue and try to make him pay the whole thing from his fee, that would likely require a legal malpractice case and/or a bar complaint, both of which could tie up the disputed settlement amounts for some time. If you would have settled for $75,000 even if you knew the lien was $21,000 ($14,000 after reduction for procurement costs), then I would suggest trying to compromise is amicably with your lawyer. If he did screw up, and this isn’t a mistake by medicare, then he’ll probably want to make it right.

      • k h says:

        Thank you for your response. The lawyer representing the nursing home is the one that negotiated with medicare through Nyquest. Apparently my lawyer never received copies of medicare summary. But my lawyer did state in settle agreement that we only except assuming that the lien was $5,213.77. What can I expect defending lawyer do to make this right!

        • fl_litig8r says:

          While you may be able to challenge the settlement based on the misrepresented lien amount by the defense attorney, I don’t know how sympathetic a court would be to your own attorney, who should have verified the lien amount himself. Whether the defense attorney is willing to do anything really depends on what he thinks your odds are of challenging the settlement and whether he can convince his client to pay more because of his inaccurate representation of the lien amount. He sure won’t pay anything himself.

  7. Sedalia says:

    Question for you: A friend had a brain injury nearly 15 years ago in a car accident. Can’t work again, on disability and Medicare, and was receiving personal injury protection benefits from his insurance company up until a few months ago when they cut him off because he filed a lawsuit asking for other benefits he hadn’t been getting. Now it has settled and the insurance company wants him to put in the settlement agreement that he will make the effort to inform any future medical providers not to bill Medicare for any accident-related injuries. In the same agreement, they now dispute that he even has any accident-related injuries. He is concerned that he will not be able to get treatment for his brain injury paid by Medicare and that they will cut him off for any injuries Medicare believes were sustained in the accident. Is this the case? To his knowledge, no provider has ever billed Medicare for his accident since he had insurance, and his current doctors have all said they can code it as the diagnosis (i.e., TBI, and any associated disorders) rather than as an accident-related injury. He has been advised that as long as long as he does not state the source of his injuries as an accident, then there should not be an issue, but he is extremely concerned. Medicare is now aware that he is about to settle and he is waiting for a conditional payment letter from Medicare which he thinks will say he doesn’t owe Medicare anything since the insurance company had been paying all these years. Help, please.

    • fl_litig8r says:

      I’m a bit confused as to what type of claim is really being settled here. Personal injury protection insurance is a type of auto insurance that usually doesn’t have enough policy limits to last through 15 years of treatment. I suspect that this is some form of disability insurance, but that leaves me wondering why it would care about Medicare, as disability insurance doesn’t pay medical bills. Is this a workers compensation claim? Could you be more specific as to what type of claim your friend is settling, because I’m having a hard time believing that it’s a PIP claim, and this information will give me some insight into why they care about future accident-related claims not being submitted to Medicare.

  8. Mike [last name removed by admin] says:

    Do I have to re-emburse medical expenses to medicare, if I receive compensation only for pain and suffering only from the guilty party, without a lawyer?

    • fl_litig8r says:

      The problem you face, as stated in my article, is that if Medicare paid for accident-related medical treatment and you subsequently settle with the tortfeasor, you don’t get to claim that the settlement is just for pain and suffering (or wage loss, or anything else), even if the tortfeasor goes along with you. That type of a settlement agreement is a pretty obvious sham to deprive Medicare of its legal right to reimbursement, and it will be easily caught.

      In other words, don’t try to settle for just pain and suffering if you have a Medicare lien. Don’t let a defendant or insurer convince you that this is a way to avoid repaying Medicare. It’s not. Settle for an amount that takes into account the Medicare lien and pay them back like you are required to. Otherwise, you risk losing your benefits and having Medicare come after you for reimbursement. They’ll go after the defendant, too, even if you signed a release, so I’m kind of surprised if you’ve found a defendant suggesting such a settlement.

      If you thought this was a good idea, maybe you should hire a lawyer. This would have been a huge mistake — one which I hope you didn’t already make.

  9. Mike says:

    Thank you very much for the reply.
    Is my understanding correct, that if I sign the release, settle the claim and pay medicare all the expenses, medicare will not pay for any future expense related to the accident?
    Regards,
    Mike

    • fl_litig8r says:

      Technically, Medicare could refuse to pay for future accident-related treatment if you don’t implement an approved Medicare set-aside. The current reality is that (at least for personal injury cases — not for worker’s comp cases) as long as you pay Medicare back for past medical treatment, it will pay for future accident-related care. While there may be some unlucky people out there who have had Medicare deny their future accident-related care, even after repaying the Medicare lien from their settlement, I’ve never seen this happened personally. If it were happening on a wide-spread basis, I’d expect more chatter among PI lawyers about now having to do Medicare set-asides in all cases. Right now, it seems to be more a theoretical concern (i.e., Medicare could one day crack down on post-settlement care) among lawyers than a practical concern.

  10. Jeff says:

    Here is our situation. My wife and I were involved in an auto accident 6/29/14 in which we were hit from behind and suffered soft tissue damage to our neck and back. My wife is disabled and on medicare and I have private insurance. The driver was 100% at fault and was actually cited in the state police accident report for failure to report an accident and leaving the scene.

    We continue to go to physical therapy and as of now have medical bills in excess of $15,000. I am trying to go through this process without using an attorney if possible. I have been in contact with the liable party’s insurance company and they just said to wait another 30 days and then get our bills together and call back. I guess I have 2 main questions:
    1. My wife has lupus and other overlapping medical conditions which have become worse since the accident. How long should we continue her therapy given the fact that her underlying disease is degenerative?
    2. After reading information on medicare and reimbursement liens, delays, paperwork, etc… should we file separate insurance claims so my case can be settled without involving Medicare?

    Thanks in advance for any advice you can give us.

    • fl_litig8r says:

      1. I always say that before trying to settle a case, you should make sure that you’re at maximum medical improvement (MMI). Many times, it will take at least 6 months to get there, because before then it is too difficult to tell whether any of your injuries have resulted in a permanent impairment. You need time to see if the treatment prescribed is working as expected — otherwise, you’re just gambling that you’ll recover as expected and you could wind up needing far more treatment than you thought. Your wife’s preexisting conditions certainly complicate this evaluation process, but I still think it’s better to wait until the doctor thinks that her accident injuries have been fully evaluated so he can make an informed judgment about the amount of care she’ll need and how long any accident-related impairments will last.

      2. I don’t know that the insurer would be willing to settle your cases separately. While it will evaluate them separately and assign a separate value to each claim, when the time comes to settle, they’re going to want to settle with both of you at the same time. I would expect that they would issue separate checks for each claim, so you shouldn’t be faced with a situation where Medicare is claiming a lien on your part of the settlement. The only time they’d issue a single check would be if one of you only had a consortium claim, not when both of you have your own injuries.

  11. mark says:

    If an attorney settles a case that contains a Medicare lien, where does the money used to pay Medicare come from in relation to how the settlement is disbursed? Does the money come from the entire settlement first, and then the rest of the money is disbursed between the attorney, the client, and the other lien holders; Does the money paid to Medicare come out of only the client’s share of the settlement; Or can the money paid to Medicare be deducted from the settlement share for the medical providers and medical professionals?

    • fl_litig8r says:

      Typically, medical liens, including Medicare liens, are taken out of the client’s share of the settlement, after attorney’s fees are deducted. There is no such thing as a settlement share for medical providers. You have the attorney’s share and the client’s share, based on the fee contract. Medical and insurance liens are typically taken from the client’s share. I don’t know any lawyers who deduct a Medicare lien from the gross settlement before calculating their fee, but I can’t say definitively that no one does this.

  12. Jeff says:

    Thanks for the information and advise. We will continue going to see the doctor’s as long as we have symptoms from the accident. It is a nebulous timetable given my wife’s condition, but we will do our best to make sure she is MMI.

    I have been in contact with our psychical therapy medical billing department and they said all of the invoices for my wife would be sent to Medicare directly. So how does that work? Medicare pays the bills as they normally would and then they put a lien on the settlement for the amount they paid to the insurance company?

    Also, am I correct that Medicare has to be informed of a personal injury case only when it is settled? I am hoping I can deal with the paperwork myself as opposed to hiring a lawyer since the liability is clearly on the driver that hit us. Will the Medicare lien process hold up the settlement? Anything we can do to be proactive about working with Medicare?
    Thanks again!

    • fl_litig8r says:

      Yes, Medicare will pay the bills as it normally does and they will be included in its lien. The good thing about this is that your wife gets the benefit of Medicare’s reductions to her bills and she only has to pay back the amount Medicare actually paid — not the amount billed before reductions.

      While Medicare definitely needs to be informed of an injury claim after it’s settled, I wouldn’t wait until then. It will just cause further delays in trying to resolve the liens. Also, if you don’t tell Medicare early and start getting their lien information before you settle, your wife might settle for too little and wind up paying Medicare all of her settlement. I would notify them now so you can see where the lien currently stands. Before you settle, be sure to get updated lien information. Also, be sure to check Medicare’s lien statements for accuracy, as it may mistakenly attribute lupus treatments to the accident because they overlap in time. You can challenge those and have them removed from the lien, but it’s best to get this process started early to avoid any needless delays.

  13. Jeff says:

    Thanks again for the information. Not to get too far ahead of ourselves, but I have been reviewing sample settlement letters and I was unsure if I should mention her disability and the fact that she has lupus and that her injuries have magnified the pain and suffering of her per-existing disease. Is it true that most injury settlements are between 3-6 times the total medical bills? What is your advice on this?

    • fl_litig8r says:

      They will find out that she has lupus anyway, so I see no harm in bringing it up in the demand. While they may try to attribute some of her pain and treatment to the lupus as a preexisting condition, you can counter that she is an “eggshell plaintiff”, and that they are responsible for any additional pain and treatment the accident caused due to her disease.

      No, it’s not true that most injury settlements are between 3-6 times medical bills. I give my general rules of thumb for evaluating the value of a case in this article, but that’s all they are — rules of thumb. Cases with a low amount of medical bills will rarely warrant a settlement of 3-6 times that amount, while cases with a large amount of medical bills may warrant even more. It really depends on a number of factors, such as the cost of anticipated future care, lost wages and the degree of permanent impairment and pain and how that will affect the plaintiff’s quality of life. I wouldn’t get hung up on multipliers, except maybe as guidance from which to start negotiations.

  14. aaron says:

    This is a tricky personal injury situation where the injury was caused by a leaking condition in the victims home that lasted several years that was neglected by the Home Association and the Management Company. Thus the claim for damages involves LARGE property damage claims and permanent injury claims. The victim was put on Medicare Disability.

    As usual, the defense is pushing the fact that most of the injuries where pre-existing although the property damage claims and the Inhabitability claims are clearly obvious. The Defense is looking to settle for a ridiculously smaller amount than the actual Property Damages alone let alone the significant personal injury damages.
    In this case, it makes no sense for the victim to settle because a settlement of such a small size that the Defense is considering would all go back to paying Medicare for all the surgeries, exams, tests etc. Unless……

    Is there a way that the victims Attorney and the Defense Attorney can list the settlement as strictly for the LARGE property damage/Inhabitability claims and specifically note that none of the settlement is for medical or Personal Injury claims since they are firm on their stance that the injuries where pre-existing. Will Medicare try to fight this?? This classifying of the settlement is the only way the victim will see any money i.e. if the Defense feels that they can prove that the injuries where pre-existing than the money they are willing to pay is for the property Damage/Inhabitablity situation that the victim was forced to live in for several years. Any other tools or strategies, clauses etc. that the victim can use to help put more money in her pocket for an already unjust situation. (Also, since it involves Medicare I believe all the pertinent laws are Federal but if it helps the case in in California.) YOU’R ADIVCE AND SITE ARE AMAZING AND I GREATLY APPRECIATE ANY HELP!!

    • fl_litig8r says:

      If this matter is settled solely as a property damage claim, and the amount paid is reasonably related to the amount of property damage alone (i.e., not clearly concealing a personal injury settlement), then I wouldn’t expect Medicare to question the settlement. If you’re looking for a guarantee, though, I can’t give you that. If you’ve exchanged settlement offers in writing which included a claim for personal injury, Medicare would always have an argument that this was part of your claim, despite your later representation that this part of the claim was dropped before settlement.

      One way to ensure that Medicare would accept this as a “property damage only” settlement would be to not release your potential personal injury claims in the settlement agreement. The release would say that it is limited to property damage claims and/or that the plaintiffs specifically do not release any claims they may have for personal injury. As you might imagine, the defendant probably won’t want to settle in such a way because it doesn’t want to leave itself exposed to future claims, but if you think about it, the refusal to release only the property damage claims kind of proves that the settlement is for more than property damage. Separate releases for property damage happen all the time in auto accident cases, where the claim for the car is completely resolved while a personal injury claim is still pending. I see no reason why it couldn’t happen in a case such as yours, other than the defendant fearing a personal injury claim as well.

      As I was writing this, I had another idea. If the defendant wants to release all claims, and you have no problem releasing your personal injury claim for a pittance, you could do two separate settlements at the same time: one for the property damage and one for the personal injury. The personal injury settlement would be for whatever nuisance value you two can agree upon. While this method still runs the risk of Medicare challenging the division of the settlements, it feels safer to me than a lump sum settlement for all claims, though not as safe as a single settlement for just the property damage that leaves the personal injury claim open.

  15. K. Benton says:

    Hi – My question is When a Insurance Co wants to settle a lawsuit Do they give the injured party’s attorney a settlement amount? I was injured (1 yr ago) when a 6′ iron gate fell on me (I kno the property owner) & caused injury to my shoulder, I went to the ER (no broken bones), I had physical therapy & a MRI – they didnt see any significate damage however I still have pain after a yr – Now my attorney said the Owners Ins Co wants to settle but when I ask my attorney how much is the settlement for my attorney told me they dont know the amt yet.
    Ive read some of your other post & I didnt see a question like mine – I think my attorney do know the settlement amt but just dont want to tell me until its time to sign the agreement. They also told me that I will get my settlement in December, 2014.
    Do I have to accept the offer or Can my attorney agree to a settlement amt w/out me agreeing to it?

    Thank you in advance

    • fl_litig8r says:

      Traditionally, the plaintiff makes the first settlement offer — though this isn’t a hard and fast rule. A defendant can let the plaintiff’s lawyer know that it is interested in settling without giving a dollar amount. I’ve had many instances where the defendant’s insurer tells me that it wants to settle and it “invites” me to make an offer to get the ball rolling. This is pretty common, and it may be what’s happening in your case.

      I do take some pause from your lawyer’s projection that you get your settlement in December. That seems like a pretty specific prediction for a settlement that hasn’t been finalized. Your attorney needs your authority to settle or to make offers on your behalf. This can be in the form of you giving him a minimum amount you’ll accept or sometimes (and I don’t recommend this) the client tells the lawyer to get the most he can, leaving settlement discussions to his discretion. If you’ve done neither of these things, then your lawyer shouldn’t be making any offers on your behalf. You should talk to him about this as soon as possible, as even though him making an offer without authority from you is an ethics violation, it can still result in a binding settlement — your only recourse in such a case would be a bar complaint and a legal malpractice suit.

      In short, make sure your lawyer isn’t making offers on your behalf that you haven’t approved before it’s too late. Ethically, he needs your approval to settle, but this is of little comfort if he violates the ethics rules and ropes you into a bad settlement that requires you to seek recourse through a malpractice case. It’s better to prevent this problem from happening in the first place than to try to clean up the mess after it happens.

  16. not my name says:

    My settlement payment was conditioned on a form b submission to Medicare, which has now delayed any payment by defendant. I receive SSDI and Medicare for my chronic bipolar depression. The case is based on discrimination, both housing and employment. Was my employment lawyer wrong to allow this condition? and what could this now mean? i begged him to remove the term, but he claimed i was trying to get ‘free’ treatment for my existing lifetime disability and would report me as ‘unethical’ if i didn’t sign. my health is my own concern & Medicare is not a free service. I am very concerned to what may happen to my settlement. It is not what i needed to feel whole; but if they feel my pre-existing condition and its treatments are somehow related to “pain and suffering” then i imagine that i can lose it all. This doesn’t seem fair that someone treated and then discriminated for their mental condition, must now be considered as injured rather than ill. Is this condition normal for ALL cases with a disabled plaintiff, with or WITHOUT any ‘personal injury’ claim?

    • fl_litig8r says:

      Without knowing the nature of the damages you claimed in your suit, I can’t say whether the defendant’s requirement that you report your claim to Medicare was unreasonable. From the nature of your claim (discrimination), I wouldn’t think that you’d been compensated for treatment that Medicare had paid for, but if you alleged that the discrimination caused emotional distress that required medical treatment, it may be appropriate. So, while I wouldn’t say it’s “normal” to require Medicare reporting in cases that don’t allege personal injury, it is normal to require it in any case which alleges damages that may have resulted in treatment (including mental health treatment for emotional distress) paid for by Medicare.

      In your case, where you have already been receiving mental health treatment prior to the incident, Medicare should only claim a right of reimbursement for any additional care above and beyond what you had already been receiving that was caused by the alleged discrimination.

  17. Richard [last name removed by admin] says:

    First of all, thank you for providing the information in your web site.

    I just learned of Medicare liens and subrogation, and I am wanting to know if a personal injury lawsuit in 2004 could affect my Medicare that began this year, July of 2014. The attorneys in that lawsuit called my insurance company and told them that they were willing to go to court to ask that my insurance company not be paid out of my settlement, other than a nominal amount. My insurance company agreed, and took the very small amount, it was not necessary to ask the judge for relief. The reason for fighting subrogation was discovering a history of an injury from tennis that could be argued proved a pee-existing condition, and not injury from a slip and fall on a cruise ship.

    I just discovered that the reason that my health insurer has not paid claims from pain management provided by a psychiatrist is due to my settlement for the slip and fall, that was largely discounted due to hurting my shoulder playing tennis.

    Then, around 2006-2008, long after the settlement, I discovered that I have severe scoliosis that is causing my spine to collapse, such that metal vertebrae were recommended for two level by one doctor, three vertebrae by another, including metal rods and all. I have refused to do the surgery on the advice of my pain doctor, who says that most of those surgeries fail, and the patient is much worse off later.

    I quit that pain doctor in 2013 due to visits that cost $160 to $200 per visit, out of pocket. I had thought that my previous insurance did not cover psychiatric (I was told that the insurance company automatically coded pain management as psychiatric because that was his practice), only to learn that they were not paying due to my court settlement. My attorneys from ten years ago thought they should have been paying me this entire time!

    My former pain doctor, that I now want to resume seeing now that I have Medicare coverage with Supplemental, says that he has had some medicare patients have to reimburse Medicare for previous awards from settlements. Can Medicare apply an award from ten years ago? Especially since the award was for a broken neck suffered in the fall, that was all but thrown out due to my having pain from tennis from strained tendons in my shoulder, and I had slipped and fell on ice years earlier and fell on the very end of my tail bone, and had to sit on an inflated “donut” for six weeks. The cruise company claimed that all injuries were pre-existing, resulting in a very small award.

    1. Am I in danger of having Medicare refuse to pay for pain management because of my award ten years ago? Especially since my pain now includes very bad scoliosis, that was not included in the settlement? Any my insurance company 90% waived subrogation, because I was not paid in full in my settlement, due to claims of a pee-existing condition, prior to my broken neck, that required cervical surgery? My pain doctor now says that he does a drug screen every month, which was costing around $250, so his fee will be around $400 per month for both the pain consultation and his drug screen.

    My old pain doctor’s office said that they may be disadvantaged, since they were previously advised that they would receive no payments for my pain management. I am concerned now that this whole matter could open up a case of worms with more extensive repurcussions. My hurting my shoulder from powerful serves in tennis, and slipping and falling and having a hurt butt for six weeks, has been a very costly combination, as if a broken neck is not proof of new injury.

    2. Is it possible to go back on my old insurance company and file pain management claims, based upon their previous agreement to make an exception to the subrogation policy, based upon my attorney’s phone call back then threatening to go to the judge and argue that my award was so small, due to “pre-existing” conditions, that the insurance company is not entitled to continue subrogation 100%

    I greatly appreciate your helpful web site, and trying to help out people that have little place to go for help.

    • fl_litig8r says:

      1. While there are no guarantees, I really doubt that Medicare is going to refuse to pay for your pain management because of a settlement that occurred 10 years ago, not even considering the arguments you have regarding the relatedness of the condition to the settlement. Such a refusal would presume that you should have created a Medicare set-aside as part of that settlement, and as I discuss in the article, that hardly ever happens in personal injury cases, even today. Medicare set-asides are pretty standard in worker’s compensation claims, but not in typical personal injury claims. When your doctor refers to patients who are paying back Medicare from their settlement, he must be referring to people who received treatment paid for by Medicare prior to their settlement. That’s the only time someone would pay Medicare back — future care subject to a set-aside would either be paid out of the set-aside funds or denied by Medicare. Medicare wouldn’t pay and then ask for reimbursement in a situation involving treatment after a settlement has occurred. In short, I don’t think you’re going to have any issues with Medicare paying for your treatment — at least any that relate to your prior settlement.

      2. You may have some real problems getting your health insurer to pay these old claims. If you submitted them and they were denied, you usually have a very short window to appeal that denial (especially if your insurance is an ERISA plan). If you never submitted the claims, or you stopped submitting them after the first few were denied, you’d also face contract defenses for untimely filing your claims. To top all that off, your claims will definitely be limited by the statute of limitations for written contracts in your state — so any claims older than the statute will be barred. If you still have some claims that are within the statute of limitations, you could try running it by an attorney who handles health care claims (you’ll want one who specializes in ERISA if it’s an employer-based health care plan). However, I’m not terribly optimistic about your chances of getting reimbursed at this point. This is something that could have been addressed more effectively the first time they refused to pay.

  18. teddy says:

    I have until the 8th of Nov to file a lawsuit against a bar under the Dram law for my husbands injury. It has been two years. He was over served and fell on their property. He is in a nursing home now and completely dependent for all his care. Does it make any sense to persue this? Wont medical assistance he has received take any settlement I would receive?

    • fl_litig8r says:

      I doubt if you could find a lawyer willing to take this case so close to the statute of limitations. It doesn’t really give them a chance to review the facts to see if it’s worth pursuing. Dram shop cases are problematic at best, so unless your husband suffered fairly catastrophic injuries from his fall, making it worth a lawyer’s time to take a risk on his case at this late date, I doubt you’ll find a lawyer interested in taking the case. The repayment of your husband’s medical bills/insurance is the least of the problems, as long as the bar had adequate liability insurance.

      If you’re having any doubts, then you should start calling lawyers first thing tomorrow. This isn’t a case you can successfully pursue on your own. Keep calling until you get a lawyer to take the case or you’re convinced that it isn’t worth doing at all.

  19. Alex [last name removed by admin] says:

    2 questions regarding a medicare lien: I’m in Michigan. What will be my net repay amount after EVERYTHING involving my attorney assisted lawsuit? Also is their a LEGAL precedent as to how the settlement proceeds are distributed, i.e. who gets paid 1st the attorney or Medicare? All my contract says is the standard atty gets one third AFTER costs, BUT says NOTHING about liens and their payment priority. Thanks in advance.

    • fl_litig8r says:

      Typically (this can be changed by contract, as it appears yours is as to costs), the order of calculations for figuring out the net to the client is:

      1. Gross settlement x fee percentage = attorney’s fee.
      2. After fee is deducted, attorney costs and liens are paid from the remaining client’s share.
      3. Client gets whatever is left.

      In your case, from what you’ve said, move the cost deduction to step 0, before fees are deducted. Obviously, this increases your net recovery because now your lawyer is paying a percentage of your costs.

      The attorney is paid before Medicare. As I state in the article, Medicare reduces its liens based on the client’s procurement costs, so it will reduce its lien by the same percentage of the settlement you paid your lawyer in fees and costs.

  20. John says:

    What if the plaintiff has no Medicare lien (she is not yet 65), but has expected future medical expenses of, say, $50,000, which will most likely be paid by Medicare once she becomes Medicare eligible? What if, on top of that, the plaintiff’s current tort case (which has not yet been put into suit) can be settled for an amount substantially less than the future medical expense estimation? Do we need an MSA, and if so, does the MSA essentially eat up the entire amount of the short money settlement the plaintiff is agreeable to? Finally, what if the principle reason the case is being settled so cheaply is that the defendant does not believe the future medical needs of the plaintiff have anything to do with the accident that resulted in the claim? Can Medicare still go after the defendant (and/or its insurer) for reimbursement if there is no MSA, and the plaintiff elects to have her corrective surgery after she turns 65?

    • fl_litig8r says:

      As I state in the article, MSAs are currently not done in most personal injury cases, even when technically they may be required, because Medicare really doesn’t have the apparatus set up to research and enforce them (or even approve MSAs in advance). Using your mother’s case as an example, where the future care she requires may or may not be related to the accident, it would take personnel with some serious medical knowledge to be able to prove relatedness (and it may not be provable to any reasonable degree even by someone knowledgeable). Cases like this, and those including disputed liability, make it very difficult for Medicare to deal with the individual issues in personal injury cases. Settlements usually don’t lay out such issues (not that Medicare would honor the parties’ agreement with respect to liability or causation), so Medicare would need to take a detailed look at every case that settles involving someone who may require future accident-related care after they become Medicare-eligible. That’s a tall order, which is why it really isn’t done at all.

      Could Medicare swoop in and say that your mother’s treatment is all accident-related and should have been covered by a set-aside (even if that set-aside would devour her entire settlement)? Yes, but it is extremely unlikely, at least with the way Medicare has been responding to personal injury cases currently. As long as personal injury (non-worker’s comp) plaintiffs pay back Medicare benefits for past treatment, they usually don’t hear from Medicare about future care. Nor do defendants, who also may be liable for unpaid Medicare reimbursement. Defendants will usually have an indemnity clause in their releases allowing them to be repaid by the plaintiff if such a lien is enforced, so I wouldn’t get too excited about Medicare going after the defendant, either.

      I would think that your mother is even less likely to be singled out by Medicare for her future care because she received no past accident-related treatment through Medicare that would even put her on their radar.

  21. Eugene Beil says:

    thank-you for the article. I have a situation in which a case was settled for a very small amount, considering the injuries (15k). the medicare lien and tricare lien exceed the client’s net. Actually the medicare lien alone does and yet they have been totally uncooperative in settling. Would an interpleader work?

    • fl_litig8r says:

      In the case of a Medicare lien, interpleader won’t help. Their claim to the money is far too solid to challenge in most cases. Medicare will automatically reduce its claim by the same percentage you paid in attorney’s fees, but usually won’t reduce beyond that. If it is claiming reimbursement for things which aren’t accident-related, you should challenge that and they’ll usually be reasonable about it.

      If you settled for $15,000 because that was the defendant’s liability insurance limit or because you were partially at fault for the accident, Medicare won’t care and will still assert its right to the full amount of the lien. There’s nothing you can do in this situation. I discuss this, and why it’s bad policy even for Medicare, in the article.

  22. carol says:

    my dad was in a nursing home where he got burnt and lawyer filed suit he will be getting a settle meant he was in there for physical therapy with blue cross and medicare 4 days bf he came home this happen , will medicare have to be paid back and will this affect his future payments from medicare he is 74 yrs old

    • fl_litig8r says:

      Medicare will have to be paid back for any treatment they covered for the injuries he claimed in his lawsuit. Any treatment for unrelated health issues does not need to be repaid. For example, he needed physical therapy prior to the accident ever happening. That therapy, and any treatment for the condition which necessitated it, would not be something for which Medicare would need to be repaid. He only needs to repay Medicare for accident-related treatment which it covered.

  23. PATRICIA F says:

    I am a plaintiff in a lawsuit against the maker of a hip replacement device that was recalled. Is it lawful for a settlement offer to reduced the payout to people based on their age? Medicare liens: can they be repaid by the defendant or must they be paid by the plaintiffs by law?

    • fl_litig8r says:

      Yes, settlement offers can be (and usually are) based in part on age, largely because most personal injury cases will have a “future damages” element. People who on average have a longer future (those who are younger) need to be compensated more because they are going to have to deal with their pain and limitations longer than those who are older. It’s morbid, but life expectancy tables are often used in settlement negotiations to help calculate future damages. While some 60-year-olds will live to 100 and some 20-year-olds will die at 30, settlements usually play the odds and just go with the average life expectancy.

      With respect to Medicare, the defendant can, in theory, pay them directly. The more common practice is to pay the plaintiff and have the plaintiff reimburse Medicare, largely because the plaintiff is in a better position to claim a reduction in the lien to account for her attorney’s fees and costs. Either way, the total settlement offer will be the same, so I see no benefit in having the defendant pay Medicare directly. It’s not like they’ll pay you more if they agree to pay the Medicare lien separately. They’ll just reduce the amount they would have paid you by the amount they’re paying Medicare directly.

  24. lynda v says:

    I recently settled a wrongful death in personal injury case on behalf of my husband settlement was three hundred and seventy five thousand we do have a medicare lien however my question is how long does it take for Medicare to tell you what you must repay and I’m further more we’ve paid the Medicare premium for years and years and years since my husband turned 62 so basically for 10 years and he never used it up until the day of the surgery which was also the date of his death can you help..it has already been 8 months since I agreed to settlement amount..I just can’t believe it takes so long for a dollar figure when I am trying to repay

    • fl_litig8r says:

      Typically, it doesn’t take 8 months to get a Medicare settlement figure. It may take a few months of going back and forth to get a finalized number — a number that reflects Medicare removing any unrelated charges and reducing the lien based on your attorney’s fees and costs — but your lawyer should almost certainly have Medicare’s initial lien claim by now. I suppose it’s within the realm of possibility that Medicare has dragged its feet so badly that he doesn’t even have that, but it seems unlikely.

      If your lawyer has that initial figure and is just waiting on Medicare to approve a reduction, and your whole settlement is sitting in his trust account while he waits, you could ask him to hold back the full amount that Medicare initially claimed (without the reduction) and disburse the rest of the settlement (minus fees, costs and other liens) to you now. Then, after the reduction is approved, he can disburse the left over money to you at that time. If the reduction is denied for some reason, he’ll still have enough in his trust account to satisfy Medicare. I discuss this “partial distribution” concept more in this article.

  25. Dave says:

    Are the attorney fees I paid a medical or misc tax deduction for getting a 37000.00 medicare lien settled?

    • fl_litig8r says:

      I am neither an accountant nor a tax attorney. Plus, I’m not even sure what you’re asking. Why would attorney’s fees for settling a medicare lien be tax deductible?

  26. Kevin M says:

    Not quite sure if you’ve answered the following in all the above comments so I’d be grateful for your thoughts on this:

    A co-worker was involved in an auto accident – the insurance company has offered a settlement but one clause in the sign-off and accept document says:

    “Client understands that any future medical payments made by Medicare/Medicaid for accident-related injuries shall be reimbursed to Medicare/Medicaid by Client.”

    He is concerned that in later years when he would go on Medicare that any kind of medical treatment that could be said to have been caused by this auto accident would not be covered by Medicare because of some kind of pre-existing clause that the above might imply.

    • fl_litig8r says:

      As I discuss in the article, while Medicare is not currently actively enforcing “set-asides” for future medical care in standard personal injury cases as they do in worker’s compensation cases, it is a risk all plaintiffs bear — albeit a small and acceptable one in my opinion. That clause is put in there because the defendant doesn’t want to share that risk. Whether such a clause would be effective for the defendant remains to be seen.

      In short, yes, your friend may run into trouble later on with Medicare if he doesn’t do a set-aside with part of his settlement. Unfortunately, it’s nearly impossible to get any approval from Medicare for a set-aside in a non-worker’s-comp personal injury case, so even if he creates one, it might not be good enough. Fortunately, I have yet to hear about Medicare making any policy shift in actively enforcing set-asides in personal injury cases, so if I were your friend, I wouldn’t let such a thing prevent me from settling. As long as he pays back Medicare for any past accident-related treatment they paid for, they very likely won’t refuse to pay for his future care.

  27. Jack [last name removed by admin] says:

    I’m an only heir to a lawsuit where the deceased was suing a hospice for bad care, Medicare filed a lien on the case. Can medicare file a lien since it was not an accident ?

    Thank you, this site is awesome !!!!!!

  28. Jack [last name removed by admin] says:

    Does a lawsuit against a Hospice home care have a medical malpractice cap in Nevada ?

    • fl_litig8r says:

      I’m not a Nevada lawyer, so take this for what it’s worth. Nevada medical malpractice cases have a cap of $350,000 for non-economic damages (pain and suffering and emotional distress), and no cap for economic damages (medical bills, lost wages, etc.). Whether the hospice provider is subject to the cap depends on whether the alleged negligence was committed by a “provider of health care” as that term is defined by NRS §41A.017 and whether that person was rendering health care services at the time. Because hospice services involve different types of workers and different kinds of services, I can’t say either way whether the alleged negligence would be considered medical malpractice under Nevada law.

  29. Mr.B. says:

    Hi,
    I have spoke with you at length in the past. Things went quite bad. My question is since I have Medicare and medicaid, am I right to believe I do not owe aany liens for medicaid – only to medicare? Input very appreciated as always my friend- after everything is paid I am supposed to end up with 10,000 and it is a settlement but it went to the point where my lawyer is claiming 40 % – that means medicare knocks off the 40%, not a third, yes?

    Sorry – P.S. – the defendant was at complete fault.

    P.P.S. Broward county, Fl.

    • fl_litig8r says:

      No on the medicaid question. If medicaid paid accident-related bills, they are entitled to reimbursement as well. Medicare will reduce its lien by the 40% (actually probably a little higher, because your costs will also be included calculating the “procurement cost” percentage, not just your fees).

  30. Mr. B says:

    Luckily, The only bill in question is my pain management doctor. I guess I can ask my lawyer what the start date of the lien is and if it goes back to when I first started going then it definitely will include medicaid because the first two years I only had medicaid then I got medicare with medicaid as my second insurance – if the date is when I started medicare then I will have to contact someone to report the medicaid time. Sound right? Also, does medicaid offer the same payback deal as medicare? Thank You.

    • fl_litig8r says:

      I don’t know what you mean by the “start date” of the lien. If you started going to the pain management doctor only as a result of the accident, and you received treatment through medicaid, that will be subject to a medicaid lien. If medicaid asserts its lien from a later date, that’s a beneficial oversight and you shouldn’t rock the boat. If you’re talking about Medicare’s lien “start date”, that’s not relevant to the medicaid lien.

      Medicaid does not offer the same reduction formula as Medicare. Medicaid’s reimbursement process is governed by state law, which only imposes a possible cap on the amount you have to repay. Under Fla.Stat. §409.910(11)(f), medicaid’s reimbursement is capped at 1/2 of your recovery after attorney’s fees and costs, and for purposes of this calculation, the state only allows up to a 25% fee to be considered, regardless of what your actual fee percentage was. Any lien amount below that cap needs to be paid in full. There is a rare potential to negotiate a Florida medicaid lien down, as explained in this article, but due to how involved the process is, don’t expect your lawyer to do it for free (or at all in most cases, because it has a low probability of success and is a huge, time-consuming pain) as he would in routine lien reductions.

  31. Mr. B says:

    I understand you are saying a lawyer will pay the amount due to medicaid but won’t get involved in trying to get a reduction. I am the guy who asked you a ton of questions about 2 months ago – re- herniation in lower back, bathroom problems, sexual problems and you had agreed that if the situation was as I described then it was worth quite a bit more then the 100,000 cap I had asked for – possibly turning to a bad faith claim. Well, my deposition was set for this morning -thursday- and I spoke with my lawyer on Tuesday. I said I want to demand the cap. He said that he wanted to try to get 30 to 35 grand and if I wanted to ask for 90 or 80 or 50 then we had a conflict of interest and he will have to quit on the spot. He said the only thing that really matters to a jury is how much damage appears on the vehicles and since the damage looked minor it would be an expensive trial that we will not win. Also said that if they refused to pay the cap it would be a lot more involved to get to bad faith and he is not a bad faith lawyer. So I go with his plan or get another lawyer. Well, I knew getting a third lawyer would be a joke and I’m too sick to defend myself for the next 2 to 4 years, assuming Travelers would appeal if I won. What could I do but knuckle under. So my lawyer and Travelers quote ‘ took turns beating their chests and Travelers said they would pay 35 today only.’ Very disheartening .

    • fl_litig8r says:

      I’m saying that while a lawyer would have no problem applying the statutory cap to get a medicaid reduction, the only other way to get one is to have what’s basically a mini-trial in front of the Department of Administrative Hearings (DOAH). As the article I cited in my last comment states, the best chance of getting such a reduction is arguing either (1) that you were severely shortchanged due to insufficient liability insurance limits or (2) that your recovery was significantly reduced due to comparative negligence. Neither of those arguments apply in your case, so I don’t think any reasonable lawyer would think that a DOAH hearing would be worthwhile, especially given the time required to request, prepare for and attend the hearing and the relatively small amount at issue in your case.

      I really can’t second-guess your lawyer’s reasoning for pressuring you to accept the settlement amount offered. My opinions on the possible value of your case depended on many factors which I can’t adequately evaluate online, particularly the likelihood of proving causation for your injuries. I was speculating based on what you told me. If I had your file in front of me, my opinion might be drastically different — or not.

  32. Mr. B says:

    I am grateful for all your help- I believe you know that. Just felt like telling you and sharing a cautionary tale. I am not a lawyer but I am not dumb either. example- Why did I not fix my back with an operation yet- answer- two doctors, the hard to heal wound specialist put me on steroids for the rare flesh eating disease that I have on my calf for five years and I’ve had plenty of small cuts on other parts of my body grow deeper taking months and even over a year to heal so a deep cut in my back could worsen instead of heal and a second doctor, a dermatologist, refuses to cut a large mutant wart out of the bottom of my foot ( never had a wart before steroids) because he sees how poorly my cuts heal and treats my wart with topicals for two years and still can’t cut the root out in fear of creating a deep wound hole in my sole. Now with merely professional written statements that is an irrefutable condition. No juror except a galactically stupid one could not see that is a clean cut reason. No defense could provide a doctor to successfully dispute such an obvious thing . Stuff like that ! (And if you had my file you would stick with me but for argument,let’s say you did not believe or agree with my medical condition – then you would say you don’t see the same level of medical damage as a reason – I will not believe you would resort to the – not enough damage on your car – as your primary reason. Anyway, Thanks and I hope I never get in another accident and need your real advise. LOL.

  33. Miriyam [last name removed by admin] says:

    My lawyer defrauded me into a settlement agreement even though I protested Kaiser does not 0 out claims. Kaiser took $18,000 in images and has refused to diagnose and treat for 5 1/2 years. The attorney for the woman who hit me has won a dismissal because I didn’t prosecute in time when all the while I have been trying to get the truth out. That attorney lied to the judge so I have fraud on the court to deal with and the judges refuse to let me bring the truth out. This is California. What can I do? I rescinded my agreement as soon as I saw what the attorneys were doing but the judge won’t consider the fraud. Please help. No attorney will help me. My former attorney threatened me.

    • fl_litig8r says:

      You allege fraud, but don’t say what was specifically done, so I can’t address that. If your lawyer failed to move the case forward after it was filed, which resulted in it being dismissed for failure to prosecute, then you could have a legal malpractice claim against him. If you terminated him before the case was dismissed, such that he lost the opportunity to avoid a dismissal for failure to prosecute before the time ran out, then I doubt his earlier inaction would be considered malpractice — you would be responsible yourself to avoid a dismissal for failure to prosecute.

  34. Jack says:

    As i said before your great.
    Please let me know if i understand this right?
    There is a $350,000 malpractice limit in Nevada.
    No limit on Medical. If the cost of the Medicare lien is $1,000,000
    and the case settles for $1,350,000 I get 66% of $350,000 for $233,000 my lawyer gets 33% of $350,000 for $116,000 and 33% of the Medicare lien of $1,000,000 for $330,000.
    I get $233,000 and my lawyer gets $446,000?
    Thank you

    • fl_litig8r says:

      Assuming your lawyer can take a full 33 1/3% fee on the full award (in Florida, fees are reduced after $1,000,000 — check your contract to see if you get any reduction after a certain amount), here’s how such a settlement would go:

      $1,350,000 total award
      – $450,000 (1/3 attorney fee)
      – $666,667 ($1 million Medicare lien, reduced by 1/3 to account for your procurement costs)
      = $233,333 to you

      So you were pretty close, but you made it overly complicated and overestimated the attorney fee.

      • Jack says:

        So the lawyer gets almost twice as much as me!
        I have a hard time thinking that is any way fair.
        Thank you very much!

        • Jack says:

          I’m sorry after reading what i wrote above, it sounded like i was being rude to you when i wrote thank you very much. That was in no way my meaning.
          I think that you and this site rock!!!!

        • fl_litig8r says:

          Well, the money that goes toward Medicare is “for you” to pay for your medical care, so that’s not 100% accurate. Plus, because you’d be paying $333,334 more to Medicare if you didn’t have any lawyer, the lawyer is really only costing you $116,666 in such a scenario. Medicare is footing the bill for most of his fee.

  35. Elizabeth [last name removed by admin] says:

    My wifes bad drug caused permanent injury. Settled for$167000. Lawyer said that they got about $66000, Medicare got 25%, and my wife got the rest. Since lawyer took payment first,reduced my wifes amount a lot. Said Medicare got over $21000. Looking at hospital bill saw a bill of $88000 plus, but with over $87000 forgiven Never scene a medical lein, heard from Medicare only, it was paid by medicare Advantage. Looking over bill I see not much but room and board, a few xrays and test. The case was about bad drug with no antidote. Charges like $8 for drug she has been taken for years and paying a dine for it seems inflated. Never saw copy of check to medicare. Do I need to try and find lawyer to help us be assured our lawyer did not steal from us. If our lawyer would have paid Medicare first, than took fees, we would have gotten maybe $10000 or more. As far as future med bills it could be over a milion dollars. Don’t understand but I need to find out what happened. Thank You

    • fl_litig8r says:

      I can say with near certainty that your lawyer didn’t steal from your wife. Nearly all lawyers take their fee from the gross settlement amount, before any medical liens are paid. You may not think that’s fair, but it’s how most fee agreements are written. From a lawyer’s perspective, deducting the medicals first means that we’re paying for a percentage of the client’s medical care, and why should we? I know that clients may not see it that way, but there are two sides to this issue from a fairness standpoint — there’s only one side when it comes to the contract.

      I would imagine that there would be a huge discrepancy between the hospital bill and the Medicare lien. Medicare gets huge reductions on medical bills and hospitals aren’t allowed to bill the patient for the amounts by which Medicare reduces their bills. I can easily see an $88,000 hospital bill being reduced to around $21,000 by Medicare. I doubt that the hospital “forgave” $87,000 of the $88,000 bill. It’s more likely that they were paid by Medicare and had to eat the rest by law.

      Before jumping to suspicions about the lawyer involved, just ask him if you can see the supporting documentation for the Medicare lien and hospital bills. You can even say that you just want copies of proof that all liens were satisfied so that if any issue arises down the road, you have those in your records. There’s no need to say “I don’t trust you and I want to see that you didn’t rip wife off.” I’m almost sure you’ll receive satisfactory proof that everything was handled as it should have been.

  36. TC says:

    I’m involved in a premises liability lawsuit filed for my mother’s injury. A few weeks ago my lawyer first suggested we should try to settle with the defendants’ insurance companies. I said okay, thinking if I didn’t like their offer I could reject it and let it proceed to trial. My lawyer tells me the defendant offered $20,000. I told him it’s too low, that I’m looking for $180,000. He tells me if we go to trial, liability might not be able to be proved and juries are stingy, and really twisted my arm by insinuating the case wasn’t going to go anywhere if I don’t agree to a low settlement. So my lawyer encourages me to reluctantly okay a counter offer of $80,000 saying the other party will not go any higher.

    Today I was informed the other party offered $27,000.

    Here is the big problem, my mom’s Medicare Advantage plan paid over $60,000 in medical expenses and after switching back to original Medicare it paid around $35,00 in accident related medical payments. So the medical expenses are at least a $100,000 and possibly as much as $140,000.

    Original Medicare is latest MSP still only listing its conditional demand of $75 paid conditionally and they were notified about the incident over a year ago. I’m afraid that when they are notified of a settlement amount, the final demand will be for the whole $35,000 they paid out.

    Then Humana which paid the bulk of the medical expenses over $60,000 will probably demand some payment if there’s anything left after original medicare is settled?

    How am I suppose to settle this lawsuit for $80,000-$27,000 with $100,000 in medicare payments and my mom end up with anything for her considerable pain and suffering, emotional duress and permanent impairment?

    How can I ever determine what original Medicare and the Medicare Advantage plan settle for before I agree to a settlement? My lawyer does not seem to want to take the lawsuit to trial and just wants to make an easy $10,000 and I get nothing.

    What should I do? I apparently reluctantly verbally agreed to counter with $80,000, because my lawyer said that, “medicare will probably only take a third after they put it in their formula”. I’m really questioning that medicare will just take a third. I believe they will take all of the settlement after acquisition costs are deducted. Since the other side countered with $27,000, can I just tell my lawyer I won’t come down and I’ll just give up on getting my mother anything since it doesn’t appear my lawyer is willing to go to trial?

    I really need advice.

    • fl_litig8r says:

      As I stated at the end of the article, whether you can expect a large reduction from a Medicare Advantage lien depends on your state’s health insurance subrogation laws and the language of the policy. With respect to the straight Medicare lien, you can expect only a reduction by the percentage of your procurement costs (attorney’s fees + costs), so in a case with a 33 1/3% attorney fee, Medicare will usually only reduce by a little more than 33 1/3%. There’s not much to be done about that. The only hope you have of Medicare settling for only a third of its lien is if your attorney’s fees and costs eat up 2/3 of your settlement, which is possible in small cases but hardly something to cheer about.

      The bottom line is that some cases aren’t worth settling by the plaintiff, because attorney’s fees and liens will eat up the entire settlement, and those same cases may not be worth an attorney going to trial over, especially if the liability issue is a problem. Neither of you would be wrong to walk away from a settlement or trial, but of course the biggest winner in that scenario is the defendant’s insurer. If you’re willing to walk away from the case entirely, why not just take the smaller settlement and hope that Medicare doesn’t fix its $75 lien and that Medicare Advantage gives you a big reduction? A chance at something is better than being assured of getting nothing. Make sure that the defendant is offering it’s top settlement number, first.

  37. TC says:

    Thanks for your reply. My understanding is that Medicare doesn’t negotiate their lien but a Medicare Advantage plan may. My lawyer suggested that “Medicare would probably reduce their claim to about a third”. He’s also sate Medicare and Medicare Advantage is the same thing as far as subrogation rights which I don’t agree with. Which one of several reasons I feel like my lawyer is only trying to maneuver me into settling even if I get nothing in the end. This case is in Ohio and I assume Humana medicare reserved its right to subrogation in the contract. But I switched my mom to original Medicare while she was still recovering in a skilled nursing facility. So I can’t obtain any info from Humana about their subrogation rights in the contract or their total amount of accident-related medical expenses paid or their recovery demand . I even tried calling and after an hour on the phone their claim department was clueless.

    I do have a question, if Medicare was notified about this accident many months ago and it’s latest conditional payment amount is under $100, is it likely after they get notified of a settlement they’ll suddenly increase this and in the final demand letter claim the $40,000 they actually paid for accident-related medical care? I was under the impression that conditional payment amount was at least somewhat of an up to date account of all the conditional payments medicare believes it made as a secondary payer.

    I probably gave the wrong impression. I definitely don’t want to walk away from the lawsuit at all. My mother suffered greatly for a better part of year and was never able to fully recover and lost amenity, and future medical expenses. I suffered and still suffer having to be her caregiver. I mean my lawyer seemed to be wanting to settle for a fraction of the medical expenses and if I don’t he’ll withdraw from the case or maybe allow the lawsuit to be dismissed. I want it to go to trail since the defendant isn’t offering anything close to an acceptable settlement.

    I understand that premises liability/slip and fall are hard to win and it was hard to find a lawyer to take it. And the defendants don’t want to admit liability although they don’t dispute involvement. But my mom was knocked down by cleaning personnel outside her apartment complex. My lawyer first said these cases are hard to win but he has had success with them and thinks my case has merit. Then months later he pressures me to settle. Then tells me their offer which was a fifth of medical expenses alone. Then tells me he’s going to counteroffer with less than half what the minimum I’m seeking. It appears I’m being forced to accept a extremely low settlement that medicare will take anyway and have no opportunity to take it to trial which is where this suit needs to go. I understand proving liability isn’t guaranteed but my mom has always said the cleaning personnel came flying through the door knocking her down and so didn’t exercise due care and my lawyer’s expert’s report says the door was not up to building codes regarding visability and door damper. So I don’t believe a trial is too risky when there’s a chance we can get 5-15x more in an award.

    So I’m worried what my lawyer will do if I’m tell him I won’t settle. I suspect he will try to tell me medicare will only take a third of the settlement, withdraw or worse let my suit sit and get dismissed.

    One other question, my lawyer said he filed the suit in December 2014 (incident happen Oct 2013) and the draft he wanted me to look over it was for filing in my county common pleas court. But I couldn’t find the lawsuit on the court’s online case search even 6 months later, and never have received any other notifications. I answered interrogatories a few months ago and was suppose to do a deposition a couple moths ago but all I been notified of is the two low offers.

    • fl_litig8r says:

      I can’t say whether Medicare will figure out that the amount listed in its conditional payment notice is too low. The conditional payment amount is supposed to be fairly up-to-date, but they aren’t bound by that number if they discover an error. I’ve already given you my opinion on the “Medicare will take 1/3 of its lien” claim.

      As far the case needing to go to trial, think of it from the lawyer’s perspective. He’s not just risking a zero recovery — he can actually lose thousands of dollars in costs, most of which will be incurred at the trial. Let me ask you this — would you be willing to pay the costs through trial? If your answer is yes, then you can offer to do that and see if the lawyer changes his mind about going to trial. If the answer is no, then you really can’t fault the lawyer for not wanting to risk his own money, either. If your lawyer isn’t willing to go to trial and will drop the case if you don’t agree to settle, you offering to pay costs through trial is the only solution I see other than taking the settlement or walking away entirely.

      As to your last question (which actually isn’t really a question), if you received interrogatories to answer then I can’t imagine that the suit wasn’t filed. It’s more likely that the court’s online search system is fickle (if you’re searching by case number, some require it to be entered in a very specific way — the same goes for party names) or out-of-date. Make sure you are searching in the correct county (it’s most likely filed in the county where the accident occurred, which may be different from where your mother lives) and try searching different ways — plaintiff name, defendant name, case number (which will be on your interrogatories if you kept a copy) — before wondering why you can’t find it.

  38. TC says:

    I understand what you’re saying. I’ll just say my lawyer gave me ever impression he would take it to trial and that I had a meritorious case and a sympathetic plaintiff for the jury. Then when I got half way out in the river, it was all about taking a settlement right away for a fraction of the medical expenses. Had I know insurance companies routinely offer a fraction of medical expenses, the unlikelihood a lawyer would really take it to trial, that my case wouldn’t even be filed for 14 months, just how stingy juries can be etc, I probably wouldn’t have bothered and gave up on the pipe dream of being made whole through the legal system.

    I would pay for legal cost to go to trial but I really can’t afford to do so. I don’t fully understand the court’s trial process and costs. My plan was to just hold firm and let the case progress closer to trial and see if defendant’s offer comes up, but I guess that will cost my lawyer money from court expenses?

    If my lawyer were to withdraw, I take it you don’t think another lawyer would take the case either? Would the 2nd lawyer have to start over from scratch or else pay for the work done such as the expert witness report, photos, medical records etc by the first lawyer?

    I was never given a case number or any info about the filing other than a rough draft of the filing. I’m searching the right court and county, but it probably is the online search system is fickle or not up to date like you said. Thanks.

    PS: I pulled up a copy of the interrogatories and the case number was there as you mentioned. Thanks

    • fl_litig8r says:

      You’re right that cases get more expensive as they get closer to trial. Things that could be put off during normal litigation, like paying for deposition transcripts and retaining experts’ availability for trial (treating doctors won’t testify for free), need to be done. These basic expenses can easily run a few thousand dollars. Some cases benefit from multiple experts or fancy demonstrative aids, which push the costs even higher. This is one of the many reasons why most personal injury lawyers don’t want to go to trial — they stand to lose a good deal of their own money, especially in cases in which liability itself is at issue and the result may be a defense verdict.

      I can’t say whether your lawyer was lying or just being foolishly optimistic at the beginning of your case when he was talking about going to trial. Most of the time, it’s foolish optimism based on not having fully reviewed the facts of the case. In fairness, most clients paint their cases in the best possible light when hiring a lawyer, only to leave the lawyer to discover the warts later on. Neither type of deception should happen, but both often do.

      If your lawyer withdrew, I would expect you to have a good deal of trouble finding a new lawyer. In general, lawyers are reluctant to take over cases already in progress as we all like to have things done our own way. In your case, with the top settlement number being unacceptable and a client who insists on trial in a case with questionable liability, I’d think it very unlikely that you’d find new counsel. The second lawyer would be able to get the file from the first, but that doesn’t have any affect on the second lawyer’s decision — as I said, he usually doesn’t want to inherit another lawyer’s work.

  39. Rebecca says:

    Received settlement (personal injury) early 2013. Lawyer had a consultant prepare future medical costs for a MSA. Lawyer reported settlement to SS. (there were no liens) and put in settlement agreement to set that money aside. So that amount is in an interest account. So CMS has been sending forms asking for the particulars of the settlement. I have ignored them as it was mail from CMS. I thought it was a company that just wanted details. I have been waiting for Medicare to bill me anything they wanted reimbursed. So since 2013 I have been waiting and there has been nothing so I started researching and figured out who CMS is. So since it has been since 2013 what do I do? Just sit on the money since I agreed to it in the settlement or call CMS? Also, from what I have read, they may want more than what is set aside? Can they do that?

    • fl_litig8r says:

      Is CMS seeking reimbursement for accident-related treatment that Medicare already paid? The Medicare set-aside only deals with care you receive after the settlement. The lien for treatment received prior to the settlement is paid separately. Obviously, it would be best if you ran this past the lawyer who settled your case, as he knows what was and wasn’t paid. If the Medicare lien (if any) for treatment received prior to the settlement was already paid, the fact that you have an MSA should mean that you’re going to be o.k.

      If you can’t get in touch with your lawyer, you should speak with CMS directly and explain what happened. If you have a statement from your lawyer delineating how your settlement was distributed, I’d have that ready when you call.

  40. TC says:

    Can you help me understand what my lawyer is saying in respond to me saying I don’t want to lower my settlement demand because of uncertainty about final Medicare and Medicare Advantage recovery demands.

    He said any final offer on the case is always contingent upon getting a satisfactory number from any lienholder. But if my lawyer offers an amount low enough that the insurance company accepts, wouldn’t it be binding and not contingent on the liens? And if the insurance company made an offer a little lower than his last counteroffer, the offer would have to be accepted before original Medicare final demand can be determined?

    He said he would never settle a case without putting any money in a client’s pocket. He want’s me to let him get the insurance company’s best offer and then we’ll run it by the lienholders. But is it really possible to do that without being bound to the offer?

    It’s like he is guaranteeing some money but it’s his call not mine how much is acceptable. Even if in the unlikely event the liens are zero, settlement would still be too low. Is he saying either settle for the insurance companies best offer or else nothing because he is never taking the suit to trial?

    • fl_litig8r says:

      Typically, there is no contingency in a settlement agreement based on the plaintiff’s lien numbers coming back a certain way. Your lawyer may be trying to make this part of the settlement, but I really can’t see a defendant agreeing to such a thing. It’s possible. I just think it’s unlikely.

      With respect to your lawyer saying that he wouldn’t settle a case without putting money in the client’s pocket, that sounds to me like he’s thinking of giving you part of his own fee should the liens take your entire share. It won’t be much, but it’s some incentive for the client to settle the case as opposed to dropping it entirely. This way, both the lawyer and the client make some money, just not as much as either would prefer. Yes, this makes it his call as to how much you get. Usually lawyers won’t make such an offer if they think that trial is a viable option, so this is a good indication that he really doesn’t think the case should be tried. It’s making the best of a bad situation, where your only other realistic option is walking away with nothing.

  41. TC says:

    That’s exactly what I figured he’s doing. He’s willing to take the insurance companies’ best offer even if it’s stays at $27,000 (and Medicare paid around $100,000) and let the medicare and medicare advantage recovery demand fall where it may if even that’s all of the proceeds of the settlement after attorney fee and cost. Then reduce his fee to pitch maybe a couple thousand to me.

    I didn’t think any insurance company would accept a settlement contingent on a favorable lien outcome. I don’t even think my lawyer is even really trying to get the settlement on lien numbers outcome.

    I just wished he was forthright and admitted what he was doing instead leaving it for me to figure out and giving me false info. If he is unwilling to take the case to trial and is willing to take the insurance companies’ offer no matter how low and let the liens fall where they may and if necessary give me part of his fee, then I wished he just say so instead of making it sound like something else that it isn’t or couldn’t be.

    I agree that my case is risky to take to trial being a premises liability but I don’t think it is a bad case for trial, and seems strong for a slip and fall case. It’s a slip/trip and fall more like a knock down and fall, that my lawyer even said similar cases with similar damages have gotten awards for around $300,000. I don’t believe the person, a former employee of one of the defendants’, who knocked my mom down will even show up for court. If my mom’s testimony has always been that this employee flew through the door without care or recklessly in the senior apartment complex knocking her forcibly down, and the defense’s main witness isn’t at trial to testify the defense’s claim of the employee “just opened the door ‘normally'”, wouldn’t the defense fall apart?

    PS One last thing the lawyer mentioned. He said if I was unwilling to let him find the defendant’s best offer, then emails have ran their course and to schedule a meeting with him in person. This concerned me because I only sent the one email in reply to the 2nd offer about me not wanting to counteroffer lower because of the lien amounts. Why would he say that?

    • fl_litig8r says:

      I’m not going to speculate about what would or wouldn’t happen at trial or if a witness might not show up, seeing that this is likely a moot point. I certainly wouldn’t put my hopes on a witness not showing up. Most people obey subpoenas.

      Your lawyer wants to meet with you in person because it’s a lot easier to reach a resolution when you’re not engaged in a piecemeal back-and-forth over e-mail. He probably sees that an e-mail discussion isn’t the best way to handle this and I agree with him on that.

  42. Liz says:

    Question. I settled a lawsuit and the attorneys with held money to pay for delayed cost and the medicare and medicaid liens. My understanding was whatever money was left over in the medicaid and medicare account I would receive. But that wasn’t the case. Since the delayed costs was higher than what they expected the remaining money was used for the delayed costs. Is that normal?

    • fl_litig8r says:

      It depends. Did the lawyer had represented to you that the delayed costs would be far less? Usually, lawyers have a pretty good handle on what costs they’ve incurred, whether they’ve received the bills yet or not. If the lawyer was way off on his estimated delayed costs, it could still be an innocent mistake. I wouldn’t be suspicious if the lawyer can back up the costs with receipts or other documentation, and they appear legitimately related to the case. If this was a large amount of money and the lawyer won’t provide any documentation to support the costs claimed, that would raise a red flag. I’d be very diplomatic about asking for supporting documentation for those costs, because if they are legitimate and you’ve pissed the lawyer off by jumping to accusations, he may send a bill asking for the excess amount out of spite.

      • Liz says:

        Thanks. He did send me a list of the things with the letter today-I never asked for it though. I was just curious if that was normal because like I said, I thought that any money left over in the liens account I would receive. No one told me that if the delayed costs were more that money would be used for it.

        • fl_litig8r says:

          Ordinarily, delayed costs are fairly insignificant — postage and copies for dealing with releases and lien resolution and such. If a case settles at mediation, the bill for that may be slightly delayed. I don’t know what costs were delayed in your case, or why, so I can’t say if it is anything unusual.

          • Liz says:

            The account that was set up was for $15000. The actual amount was over $30,000. Charges for court reporters for depositions and expert witness are what made it that amount.

          • fl_litig8r says:

            Yikes. That’s a lot of delayed costs. I wonder why all those charges appeared at the end.

  43. Liz says:

    And we did settle at mediation which I was happy about.

  44. TC says:

    I went to the meeting with my lawyer that he requested. He attacked me, continuously put words in my mouth and said things that are contrary to my understanding of the matters and what I’ve read on this site and other reputable legal information sites. He still insists that he can find the defendants best offer and condition it on what the Medicare liens come out as. When I questioned that, he accused me “Trying to be a lawyer..” and “That’s the problem with people using google..”

    One thing I can’t figure out is he showed me the MSPR portal with ~$17,000 conditional payment. But when I log into the portal it shows ~$75 as it always has and the conditional letter I received have said. He didn’t seem to care about the discrepancy since I’m the idiot and everything I say is wrong.

    Also the expenses he’s claiming seem very high already. $3500 for the expert to write a report on the door. So as far as I can tell I have an offer of $27,000 legal fees over $13,000 and a medicare lien of $17,000 not counting the Medicare Advantage according to my lawyer.

    When I mentioned paying trial costs, suddenly he seemed open to taking it to trial. This was after convincing me that it’s nearly impossible to prevail at trial with a premises liability case and that the jury and judge are against the Plaintiff. So, he said it would probably cost $6,000 to $10,000 for trial costs which I don’t have. What a mess.

    • fl_litig8r says:

      Well, I don’t know what to say. I can’t explain why Medicare is showing different figures to the two of you, though from what you’ve said it sounds like the ~$17,000 figure is accurate, so I’d go with that. As far as the expert witness fee, I don’t know what type of expert he was, what his hourly rate was or what he needed to do to generate that report, so I can’t say that $3,500 is unreasonable. A lawyer would be pretty stupid to inflate an expert cost and pocket the difference, because it would be really easy to get caught (and severely disciplined, if not disbarred), so I doubt that the bill isn’t what the expert actually charged.

      If he’s convinced that he can get the defendant to agree to a settlement conditioned on the Medicare lien being a certain number, maybe he can. I have serious doubts about any defendant agreeing to this, but I never said it was impossible.

      As far as him being more open to trying the case if you pay the costs, that’s not really inconsistent with him thinking that your chances at trial are poor. He knows that the settlement on the table isn’t going to make anyone happy, so that’s already a bad outcome. The only chance at a good outcome, even if it’s a slight chance, is at trial. He just doesn’t want to spend more of his own money on that slim chance. If you bore the cost of that risk, it makes it easier for him to stomach.

  45. TC says:

    Thanks. What you’re saying makes sense and seems to be what’s going on. The expert as far as I know was only paid to write a report based off of photos of door that I and my lawyer took, which I read a copy. The expert is a friend of the lawyer. I don’t know that they are splitting the expense, but it’s possible he’s willing to pay the expert a high fee as a friend.

    I think my lawyer is playing with semantics about the settlement being conditioned on the lien. I think he’s going to what he thinks the insurance companies best offer, and before official accepting it, he’s going to present it to Medicare along with appealing/contesting medical payments as not being accident related, for their final payment demand. Then if Medicare comes back too high, just not accept the offer and maybe proceed to rrial. I don’t know if this could actually be done or not because medicare may take too long to give final demand and once it did would expect payment in 60 days. But that’s the impression I was getting piecing together what he was saying.

    It’s just disquieting that it’s easier to talk to you and I get better information from sites like this one than with my own lawyer.

    I can understand him not wanting to spend more money to go to trial when it’s a risk, but if the case is really that weak and risky, it shouldn’t be suddenly an option to go to trial because I’m risking the money. I can’t judge the risk when he won’t answer even questions such as about the defense’s main witness. I guess I need to contact MSPR and find out myself for sure what the conditional payment is, hopefully it really is $75.

  46. Loretta [last name removed by admin] says:

    I had an existing hip problem and was involved in an accident January 2015. I was hit from behind and the person who hit me did not have insurance. As a result of the accident, I had hip replacement surgery. I had to go under my auto insurance for med pay and the policy maximum was $5,000.00. My hospital bill exceeds $63,000.00 so far. I have uninsured motorists coverage for $15,000.00 and my auto insurance will issue me a settlement in this amount. I do not have a lawyer. Please advise how much Medicare will be entitled to in the uninsured motorists settlement?

    • fl_litig8r says:

      How much did Medicare pay? That’s the amount they’re entitled to recover. As I state in the article, there is a process by which one can request a Medicare waiver, but you can only request one after you’ve paid Medicare back (you’re basically asking for a refund) and the odds aren’t in your favor of it being granted. In many cases, a Plaintiff in your position would be better off settling for $5,000 and using Medicare’s fixed percentage option to settle the lien. At least that way you’d get some money.

  47. Rose says:

    Can Medicare request a Lien on a tobacco settlement that did not specify medical payments in or pertaining to the jury judgement?
    Pain and suffering, bodily injury, disability or physical impairment, mental anguish, inconvenience, or loss of capacity for the enjoyment of life experienced in the past or to be experienced in the future.
    Smoking caused a friends coronary artery disease.

    • fl_litig8r says:

      As I state in the article, Medicare doesn’t care what the parties write in their settlement as far as whether it includes payment for medical treatment. If a plaintiff receives medical care paid by Medicare and then settles a case based on the accident that created the need for treatment, Medicare will treat the settlement as payment for that medical care. It’s a totally different matter if a jury entered a verdict for the plaintiff that showed that none of the damages were for medical care. In that case, Medicare will accept how the funds were allocated because there isn’t any motivation for a jury to “game” the outcome to cheat Medicare, as there is in a settlement involving only the parties.

  48. Rose says:

    Oh yes, I am sorry…the jury only gave an award on non-economic damages. They tried for punitive damages and all, but the jury didn’t give anything. The judgement the judge entered after trial stated non economic damages only per jury.

  49. Patricia [last name removed by admin] says:

    I have been doing a lot of research….I was recently involved in a pretty serious accident…the other party was at fault and my car was totaled…12,000.00 worth of damages….i have amerigroup…which i believe, is medicare advantage. I suffered 2nd degree burns and soft tissue damage. I did go to er that day…they sent me the bill instead of billing my insurance…I did see my PCP and had 2 xrays done, which I believe, all totaled are less than 300.00…. I received the physical therapy and the therapist only once to be billed through the claim…I do not have a lawyer and have been talking been talking directly to the insurance adjustet…. I later found out about the medicare lein, will there be a lien on the 300.00 worth of actual billed charges. Do i even have to report this, all other bills were not used through medicare…i either out of pocketed them or they are waiting through te claim…like the physical therapist….please help…i am confused would they really put a lien for 300.00. Even er…sent the bill to me wanting the claim info…so to my understanding they did not bill my insurance

    • fl_litig8r says:

      I’m not going to tell you that it’s just o.k. to not report the accident and ask for lien information from your insurer. You probably already know this. Could you risk it and get away with it? Maybe. Is it really worth the risk just to keep an extra $300 (probably less if the insurer got a reduction) from your settlement? I wouldn’t think so. It’s not like income taxes, where if you make under a certain amount you don’t need to file a return. You should handle the lien no matter how small it is.

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