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Medicare Advantage Plan Liens & Reimbursement

Medicare Advantage Plans often claim liens and/or reimbursement rights on personal injury lawsuits.  This post isn’t about Medicare Advantage (“MA”) plan reimbursement rights (or whether the Medicare Secondary Payer statute allows federal actions for MA plans).  Instead, this post aims to assist in reduction of MA plan liens.

Last week, we were offered a 25% reduction to settle a $1,452.29 Medicare Advantage lien.  The subrogation firm would accept $1,089.21 on a $75,000.00.  Many attorneys will simply accept that $152 extra they are being asked to pay – but we were given the go-ahead to reject that offer.  Below is our statute-heavy response to the MA Plan’s subrogation firm (with necessary redactions):

Thank you for your offer to accept $1,089.21 to satisfy your reimbursement interest.  We appreciate the offer to reduce by twenty-five percent.  Unfortunately, we disagree that it is the correct amount.

Your January 18, 2012 letter to ________________ at my office cites to 42 U.S.C. 1395 and its corresponding federal regulations.  Your letter specifically cites to 42 U.S.C. 1395w-22(a)(4) which in turn cites 1395y (b)(2) – “Medicare Secondary Payer,” or the statute cited by the federal government in its recovery of regular Medicare payments for third party lawsuits like Ms. _________’s suit.

If you claim reimbursement under those acts, you must act in accordance with those acts and their corresponding federal regulations.

As a result, you must comply with 42 C.F.R. 417.528 (a regulation you cited) which references 42 C.F.R. 411 et. seq. (Part (a) ‘Limits on payments and charges. (1) CMS may not pay for services to the extent that Medicare is not the primary payer under section 1862(b) of the Act and part 411 of this chapter.’).  Your twenty-five percent reduction does not comply with 42 C.F.R. 411.37, which states:

(a)   Recovery against the party that received payment— (1) General rule.

Medicare reduces its recovery to take account of the cost of procuring the judgment or settlement, as provided in this section, if—

(i)                 Procurement costs are incurred because the claim is disputed; and,

(ii)               Those costs are borne by the party against which CMS seeks to recover.

 We have provided you with a statement of procurement costs.  Part (c) of that regulation (411.37) lays out the Medicare procurement formula.  Applying those costs to the formula your reimbursement interest becomes $937.38.  Please provide us with a new confirmation of final reimbursement so that we may provide you with payment.

This might be the first work product we’ve ever posted to the lienblog.  The key to this letter is that it isn’t rocket science – but it was fun throwing the “you cited” arguments at them!

We will separately address the current status of MA Plan recovery rights in federal court in a future blog post.   The above is meant to be used where you plan to resolve a so-called lien – if you want to fight its validity in whole you will likely end up in court.  Please contact us for any lien resolution support or assistance.  In addition to Medicare lien resolution, we can assist you with Medicaid lien resolution, ERISA subrogation, private insurance companies’ liens, and more.

Ryan J. Weiner
Lien Resolution Services
This Blog/Web Site is made available by the publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.



About Ryan J. Weiner

Co-Founder of Lien Resolution Services, LLC, a national healthcare lien resolution firm. Our goal is to assist in the fair administration and resolution of healthcare liens on personal injury cases. Please visit our website for more information: www.lienresolutionusa.com.

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