Atlanta car accident lawyers have had to deal with Medicare and Medicaid liens for as long as I can remember. In auto accident cases, when Medicare or Medicaid pays a client’s medical bills, federal law requires that Medicare or Medicaid be reimbursed out of the client’s car accident settlement. The Centers for Medicare and Medicaid Services (CMS) routinely sends demands to the Atlanta Car Accident Lawyers at Zevin & Rosenbloum for reimbursement. These demands frequently require payment within 60 days of settlement, regardless of whether the client has a legitimate claim for reduction or waiver of the reimbursement. Finally, a U.S. District Court has said that this practice is unfair and not allowed.
On May 5, 2011, the Arizona US District Court (Court) ordered the Centers for Medicare and Medicaid Services (CMS) to stop demanding of beneficiaries “payment of a MSP reimbursement claim with threats of commencing collection actions before there is a resolution of an appeal or waiver request” and to stop “demanding that attorneys withhold proceeds from their clients pending payment of disputed MSP reimbursement claims”.
In the underlying cases, the plaintiffs were injured, received medical services conditionally paid for by Medicare, and subsequently received settlement proceeds from a liability insurance company. CMS, followed its longstanding procedure and sent a demand letter to the plaintiffs and the plaintiffs-attorneys notifying them that the reimbursement claim must be paid within 60 days or interest of 13.375% would accrue and collection actions would be initiated. Interestingly, each Plaintiff disputed CMS’s conditional payment reimbursement claim. Plaintiff attorneys were additionally told that Medicare’s claim must be paid up front out of the settlement proceeds before any distribution occurs.
60 DAY REQUIREMENT
The Court found CMS’s 60-day requirement to collect reimbursement claims from beneficiaries “neither rational nor consistent with the statutory scheme providing for waiver and appeal rights.” In other words, the Court seems to be saying that it makes no sense to essentially say to the plaintiff, “you can appeal this but, but you have to pay it in sixty days.” So, the Court ruled that “collection activities are precluded against beneficiaries, pending resolution of waiver requests or appeals…”
RECOVERY ACTIONS AGAINST ATTORNEYS
The Court found that:
• Congress never expressly made attorneys responsible for reimbursements to Medicare.
• CMS cannot force an attorney to turn over to CMS what is essentially the injured persons property.
• Collection actions against attorneys are also precluded, pending resolution of waiver or appeals.
• CMS may not preclude plaintiffs-attorneys from disbursing undisputed portions of proceeds to their beneficiary clients.
CLASS ACTION CASE
The Court certified this as a class action case defining the class broadly as persons who are or will be subject to MSP recovery, and from whom defendant has demanded or will demand payment of MSP claims before there have been determinations of the correct amounts through the waiver or appeal process.
This case is going to create a lot of further controversy regarding the obligations to CMS for a liability case. It seems likely that CMS will appeal this decision. We will continue to keep you updated as things unfold.
To read the Court’s order in its entirety, click here.
