When we first speak to a potential client, or concerned family member, we always ask:
o “Is your loved one receiving Medicare or Medicaid benefits?”
o “Is your health insurance provided by your employer?”
o “Were you injured on the job?”
These may seem like strange and, somewhat, irrelevant questions, but they are essential for determining whether to file a lawsuit.
If you are sixty-five years old or older, then you are entitled to Medicare insurance coverage through the federal government. If so, and often without your knowledge or notice, Medicare will be billed for and pay for a portion of your medical care and treatment. Medicare may even pay for a portion of your nursing home stay. If so, any lawsuit you file where you seek repayment for medical care necessary as a result of another’s negligence, Medicare has a right to seek repayment for the services they paid for on your behalf.
For example – Edna, age 65, falls on an open can of soup at her local grocery store. The store manager calls 911 when Edna is unable to walk and the ambulance arrives. The rescue squad takes Edna to Local Community Hospital where Edna is evaluated in the emergency room. She is admitted to the hospital when her doctors realize she has fractured her right hip and requires surgery. Edna has surgery and, two days after surgery, she is discharged to a nursing home for rehab after the hip surgery.
If Edna files a lawsuit against the grocery store for negligence and personal injury and recovers $25,000, Medicare will seek repayment of any monies paid on her behalf for injuries related to the fall. Under Federal law, Medicare does not have to provide Edna notice that they plan on seeking repayment. See 42 CFR §411.26.
But how much will Medicare seek in repayment? Sadly, we cannot answer that question for Edna or her family. Each lien is determined on a case by case basis… but, by law, Medicare should reduce their demand, taking into consideration there were costs with filing a lawsuit or seeking a settlement (including attorneys’ fees, experts' fees, etc.). But what if the ambulance bill was $400, Emergency Room--$2000, surgery--$8000, four-day hospital stay--$7000 and twenty days in the Nursing Home getting rehab--$4000? Medicare will have paid, at least, $21,400.00 for Edna’s care, and, effectively, can take almost every penny of her $25,000 settlement after attorneys’ fees and costs…so we warn clients, right away--THERE IS A POTENTIAL LIEN ON YOUR RECOVERY… AND WE WON’T KNOW HOW LARGE OF A LIEN UNTIL THE END. Not only is this scary for many clients, it will often be enough of a deterrent that the family will decide not to file suit.
And Medicare is not the only party who can claim a lien.
In Virginia, and most other states, programs exist to provide a level of healthcare for those who cannot afford it. There is no age limit to Medicaid, but, rather, an income cap. Like Medicare, Medicaid has a right to seek repayment for monies paid on behalf of a beneficiary. If you file a lawsuit against a nursing home, doctor, or even as a result of a car accident, if Medicaid paid for a portion of your care, they will seek repayment. And here is the real-kicker--both Medicaid and Medicare can seek repayment on the same lawsuit…. So if Edna, in the above example, was on disability, or had an income qualifying her for Medicaid benefits, Medicare could seek a lien for the $21,400 it paid, and Medicaid could do the same if it paid any of her related bills.
Other possible liens
If you receive health insurance benefits through your employer as a result of a qualified ERISA plan, the plan will, likely, be entitled to reimbursement if you are successful in pursuing a claim against a negligent party. It is very important to discuss these issues with your attorney.