You have to reimburse Medicare for medical bills they paid for treatment for injuries from an accident.  Medicare has, what we call, a super lien.  Not only are you on the hook for the reimbursement but also the insurance company if they don’t pay it back would be liable.  And the attorney could also be personally liable.  You’re definitely are required to pay Medicare back anything they pay for medical care of injuries suffered in a car accident caused by someone else.

It’s much the same way with most health insurance policies.  They have provisions requiring subrogation.  You have to pay back if there is someone else that is responsible for the injury.

Sometimes the amount can be negotiated down.  Most of the time that the amount is a lot less than what your medical bills would be.  Medicare pays a very minimal amount of the total bill so if there was a $1,000.00 bill they might have only paid $122.00 toward that.  You only have to pay what Medicare actually paid.  Medicare will also give a 25 percent discount off of that for the attorney helping them collect.  The attorney usually passes this on to the client.

Medicare is a huge problem.  They are very slow in responding.  They have a lien on the case that has to be repaid.  Until the attorney gets the conditional amount from Medicare he has no idea what type of settlement or what the bottom line of the settlement will be and how much they will get.  A case in Arizona basically put a halt for two or three months on everything.  There were no letters going to attorneys stating what the lien amount was.  Consequently, car accident cases and other personal injury cases could not be settled.  This placed a huge financial hardship on those accident victims.

The Strengthening Medicare and Repaying Taxpayers Act (SMART Act) was introduced on March 14^th, 2011 in the 112^th Congress by Representative Tim Murphy (R-PA) and Representative Ron Kind (D-WI) with support from both the American Justice Association (AJA), which I am a member of, and a diverse coalition of businesses called the Medicare Advocacy Recovery Coalition (MARC).  The SMART Act will significantly improve the efficiency of the current Medicare Secondary Payer (MSP) system and speed repayment of amounts owed from Medicare beneficiary claims directly to the Medicare Trust Fund.  This means that accident victims will be able to receive their settlement checks more quickly.

The Medicare Secondary Payer (MSP) was created in 1965 to provide health care for America’s seniors.  It is the principal form of health care coverage for everyone over 65 and for millions of disabled Americans.  Medicare is the primary payer-that is, it pays health claims first, and if a beneficiary has other insurance, that insurance may fill in all or some of the Medicare’s gaps.  The MSP system saves taxpayers billions of dollars.  However, its existing rules are inefficient; unnecessarily delay personal injury settlements and waste government, beneficiary, and stakeholder resources.  This is why SMART Act was being promoted by MARC and AAJ.

Roy Franco, the Co-Chair of MARC and representing the MSP efforts for Safeway said, “The SMART Act will help to streamline our government in tight fiscal times by creating a MSP system that works effectively for all stakeholders.”  If the SMART Act is enacted, it will create a more efficient and effective system for all beneficiaries by:

• Implementing safeguards for Beneficiaries’ Personal Information
• Speeding up the Distribution Settlement Funds
• Help to Avoid Unnecessary Litigation
• Protect the Beneficiaries’ Access to Justice and our Court System

With the help of this bill, Medicare beneficiaries will be able to settle claims and the Medicare Trust Fund will be repaid quicker.  Companies will be able to resolve disputes faster and more efficiently.

As a personal injury attorney I have had to deal with the nightmare we call Medicare for years.  It has progressively become harder to deal with and frustrating for those who have been seriously injured in car accidents.  I am optimistic that the SMART Act will live up to its name.

Steven Wilson was the passenger of a Jeep Grand Cherokee and was insured by State Farm.  The car was involved in an injury car accident on August 29, 2009. Unfortunately, the driver of the other vehicle who was at fault was uninsured.  Wilson had significant medical bills due to the accident. Some of these medical bills were paid by the Medicare (This is the practice in Kentucky after the PIP benefits are exhausted. The payment creates a statutory lien requiring the recipient of the Medicare benefits to repay Medicare. This is called a super lien because the attorney and the insurance company are also liable if payment is not made). The State Farm insurance policy available to Wilson was an uninsured motorist policy. The policy limits were only $50,000.

State Farm asked permission to discuss the lien with the Medicare. This was refused by Wilson.  Wilson then demanded the insurance settlement be deposited in an attorney escrow account.  State Farm suggested including Medicare as a payee on the settlement check which was also rejected by Wilson.  Eventually, State Farm issued separate checks to Medicare and Wilson while waiting for Medicare’s determination of the value of its lien.

Dealing with Medicare is frustrating for accident victims as well as their personal injury attorney. They are typically slow in responding to lien amounts which will hold up finalizing a personal injury settlement.  Unfortunately, there is nothing that can be done to speed up the process. Patience is the key.

In Wilson v. State Farm Mutual Automobile Insurance Company Co, Steven Wilson claims State Farm acted in bad faith by delaying payment of the policy limits more than 30 days.  According to the Courts opinion State Farm learned the value of the Medicare lien after two months when they paid both the Medicare and Wilson.

Judge John G. Heyburn, II signed a Memorandum Opinion and Order on June 14, 2011 granting State Farm’s motion for summary judgment and dismissing the complaint with prejudice.  Wilson’s motion for summary judgment was also denied.  The Court concluded that delay or withholding of payment until a determination is made with respect to Medicare’s conditional payment amount alone does not constitute bad faith.  State Farm had the willingness to settle its accounts. The fact that they attempted to determine the amount to be paid to Medicare was considered a reasonable precaution to protect itself from overpayment.

Under Kentucky law in order to withhold payment on an insurance claim the insurance company must:

1. Have an obligation to pay the claim;
2. Not have a reasonable basis for failing to pay the claim; and
3. Know that it lacked a reasonable basis to delay payment or act in a reckless disregard to the existence of the basis.

Although I understand the Court’s ruling, I see this opinion being used to delay payments in accident cases. This will allow the insurance company to hold onto the settlement amount and earn interest while the injured accident victim struggles to make ends meet. Surely there is a better way.

In Kentucky if you are a pedestrian or a bicyclist that has been hit by a car or a truck you may be wondering whether or not your medical treatment will be paid for and by whom.  This is a good questions for bicycle accident victims, as well as pedestrian accident victims. As a personal injury attorney, I can tell you that in almost every circumstance your treatment for injuries sustained in a motor vehicle accident will be paid for by an insurance company.  The question is what insurance company? Is it your health insurance? Is it your car insurance? Is it the car insurance for the car that hit you?

The first place that we look is to the car that hit you, the car that caused the bicycle accident or the pedestrian accident. If the car had auto insurance their PIP benefits will pay for your first $10,000.00 of medical treatment, no questions asked, as long as the treatment is related to the accident. 

If for some reason the car that caused the accident did not have insurance we then turn to your own personal car insurance company if you owned a car.  You might think this is the last place that you should look. After all you weren’t in your car at the time of this accident. Under almost all car insurance policies your car insurance is required to pay your medical treatment from injuries sustained in an accident between a car and you if you were a pedestrian or riding a bicycle. No matter how the accident occurred your car insurance will pay as long as it was a motor vehicle accident of some sort. 

Now if the other car did not have insurance and you do not own a car you will be eligible for benefits under what is called the Kentucky Assigned Claims Plan.  This is a state run program that requires insurance companies to, on rotation, pay for medical treatment for people that did not have insurance or no insurance available to them in a particular accident.

After the PIP benefits are exhausted you will then look to your personal health insurance, Medicare or Kentucky Passport. This insurance is secondary and is not used until the $10,000.00 in No-Fault Benefits are exhausted. Your health insurance will pay under the terms of your policy for any medical bills over the $10,000.00. Your health insurance company, Medicare or Passport may be entitled to repayment under federal law called ERISA or the terms of the policy from your personal injury recovery. You should check with an attorney to determine if subrogation is required.

After the PIP benefits are exhausted you will then look to your personal health insurance, Medicare or Kentucky Passport. This insurance is secondary and is not used until the $10,000.00 in No-Fault Benefits are exhausted. Your health insurance will pay under the terms of your policy for any medical bills over the $10,000.00. Your health insurance company, Medicare or Passport may be entitled to repayment under federal law called ERISA or the terms of the policy from your personal injury recovery. You should check with an attorney to determine if subrogation is required.

The bottom line is if you’ve been in a pedestrian accident or a bicycle accident where you’ve been hit by a car you are entitled to have your medical bills paid.  So don’t hold off on getting the treatment you need to recover from your injuries.  Get the doctor and find out what’s wrong with you and get better. This will enable you to achieve the best result possible in your bicycle accident or pedestrian accident case.