Medicare Liens in Legal Malpractice Cases

When a Legal Malpractice action arises out of an Underlying Matter that was a claim for damages due to an injury sustained in an accident, does Medicare have the same LIEN rights as in the underlying matter?

A recent case that was handled by this office involved this exact issue. The carrier insisted on putting Medicare on the settlement check even though the lawyer who blew the statute of limitations had never notified them of the accident.

 

All calls to MSPRC, the collection agent for Medicare, received the same response that “If Medicare would not have paid for the case against the lawyer that you are now collecting on,  they cannot claim a lien against the recovery in the client’s malpractice case now.

 

It was considered a “FAILED CASE”. These are apparently the magic words.

Only problem was that there was no way to get MSPRC to put anything in writing, and as one representative explained it, there was no TREE to CHOP down, since the accident had never been reported by the negligent lawyer.  So we reported it by telephone to Medicare COPD, and sent a letter asking them for a disclaimer. They first had to build a file to know the benefits paid due to the underlying accident.

 

We were also told there was no statute of limitations for Medicare to go after the insurance company for the at fault driver. Turns out that is true only if the client had not failed, through their lawyer, to file on time.

Frustration reigned as we had to explain the situation to every person we called at MSPRC, the last case worker flat out telling me that since it was a ” No Fault” case, we had to pay them back and whatever Medicare told me was not binding on MSPRC.

 

Needless to say I asked to speak with the Supervisor. Never give in to the first negative is the lesson here. I told him about the “failed case” and blown statute, and he confirmed that now that they had an amount they could disclaim any interest in the malpractice case. He promised a letter and sure enough MSPRC sent me a letter, disavowing any interest in the Legal Malpractice settlement. What a pain in the rear, but finally some direction and reception, and success.

 

The carriers got away with their delay despite the fact that both he and I were told by MSPRC that they had no interest in reimbursement from a malpractice case. Had to jump through the hoops while they garnered interest for their policyholders I guess.

Hope this helps.