More settlements between the U.S. Department of Justice and plaintiff attorneys require reimbursement for Medicare Conditional Payments

Although we certainly hear a great deal about Medicare becoming increasingly more aggressive with primary payers (responsible employers, corporations, insurers, self-insured entities and third party administrators), the federal government is also becoming just as unforgiving with beneficiaries’ attorneys.

Pursuant to the Medicare Secondary Payer provisions of the Social Security Act, 42 U.S.C. 1395y(b)(2), when Medicare has made a payment on an auto, liability, no-fault, or work comp claim, it is entitled to reimbursement from the primary payer, including the beneficiary’s attorney.

Four recent cases remind us that attorneys representing Medicare beneficiaries in auto, liability, no-fault and workers’ comp claims are responsible to make sure Medicare is reimbursed if, in fact, Medicare has made payments related to such claims.

1. Philadelphia personal injury law firm agrees to pay $6,600 for unpaid Medicare debts

On January 8, 2020, United States Attorney for the Eastern District of Pennsylvania, William M. McSwain, announced that Simon & Simon, P.C., a Philadelphia-based personal injury law firm, entered into a settlement agreement with the U.S. to resolve allegations that it failed to reimburse the U.S. for certain Medicare payments.

The government alleged that “at various points between 2014 and 2019, Medicare made conditional payments to healthcare providers to satisfy medical bills of eight of the firm’s clients. Although Medicare demanded that Simon & Simon repay the resulting Medicare debts, the firm failed to do so.”

Under the terms of the settlement agreement, Simon & Simon agreed to “pay a lump sum of $6,604.59. Perhaps more significantly, the firm also agreed to (1) name a person responsible for paying Medicare secondary payer debts; (2) train the employee to ensure that the firm pays these debts on a timely basis; (3) review any additional outstanding debts to ensure compliance; and (4) provide written certifications of compliance.

In addition, Simon & Simon acknowledged that any failure to submit timely repayment of Medicare secondary payer debt may result in liability for the wrongful retention of a government overpayment under the False Claims Act.” https://www.justice.gov/usao-edpa/pr/philadelphia-based-personal-injury-law-firm-agrees-resolve-allegations-unpaid-medicare

2. Baltimore plaintiffs’ law firm pays the U.S. over $90,000 to reimburse Medicare for conditional payments

On November 4, 2019, U.S. Attorney for the District of Maryland, Robert K. Hur, announced that Saiontz & Kirk, P.A., a Baltimore-based law firm, paid the U.S. $91,406.98 to resolve allegations that it failed to reimburse Medicare for conditional payments that had been made to medical providers on behalf of firm clients.

“Plaintiffs’ attorneys cannot refer a case to or enter into a joint representation agreement with co-counsel and simply wash their hands clean of their obligations to reimburse Medicare for its conditional payments,” said U.S. Attorney Robert K. Hur.

“We intend to hold attorneys accountable for failing to make good on their obligations to repay Medicare for its conditional payments, regardless of whether they were the ones primarily handling the litigation for the plaintiff.”

According to the settlement agreement, “over a number of years, Medicare made conditional payments to healthcare providers to satisfy medical bills for the firm’s clients. During that period, the firm referred clients to or entered into joint representation agreements with co-counsel on four of the six matters about which the U.S. Attorney’s office contacted the firm.” 

The government contends that the firm, either itself or together with co-counsel, negotiated for and received settlement proceeds for the firm’s clients, But neither the firm nor its clients repaid Medicare for conditional payments that Medicare made to medical providers. https://www.justice.gov/usao-md/pr/baltimore-plaintiffs-law-firm-saiontz-kirk-pa-pays-united-states-over-90000-settle

3. Maryland plaintiff’s law firm agrees to pay the U.S. $250,000 to resolve the government’s conditional payment claims

On March 18, 2019, U.S. Attorney for the District of Maryland Robert K. Hur announced that Meyers, Rodbell & Rosenbaum, P.A., a Maryland law firm with offices in Riverdale Park and Gaithersburg, entered into a settlement agreement with the U.S. to resolve allegations that it failed to reimburse the U.S. for certain Medicare payments made to medical providers on behalf of a firm client.

According to the settlement agreement, “in and prior to 2012, Medicare made conditional payments to healthcare providers to satisfy medical bills for a client of the firm. In December 2015, with the firm’s assistance and representation, the client received a $1,150,000 settlement in a medical malpractice action stemming from the client’s injuries. After Medicare was notified of the settlement, Medicare demanded repayment of the Medicare debts incurred from those conditional payments. The firm refused to pay the debt in full, even when the debt became administratively final.” 

Under the terms of the settlement agreement, “the firm agreed to pay the U.S. $250,000 to resolve the government’s claims. The firm also agreed to (1) designate a person at the firm responsible for paying Medicare secondary payer debts; (2) train the designated employee to ensure that the firm pays these debts on a timely basis; and (3) review any outstanding debts with the designated employee at least every six months to ensure compliance.” https://www.justice.gov/usao-md/pr/maryland-law-firm-meyers-rodbell-rosenbaum-pa-agrees-pay-united-states-250000-settle

4. Philadelphia plaintiff’s law firm agrees to pay $28,000 to reimburse the U.S. for Medicare Conditional Payments

On June 18, 2018, U.S. Attorney William M. McSwain announced that Philadelphia personal injury attorney Jeffrey Rosenbaum, and his law firm, Rosenbaum & Associates, entered into a settlement agreement with the U.S. to resolve allegations that they failed to reimburse the U.S. for certain Medicare payments the government had previously made to medical providers on behalf of the firm’s clients who sought medical care.

“At various points before March 2017, Medicare made conditional payments to healthcare providers to satisfy medical bills for nine of the firm’s clients. Between May 2011 and March 2017, Medicare demanded repayment of the Medicare debts incurred from those conditional payments. CMS demand letters totaling $28,000 were dated May 10, 2011; July 4, 2011; July 30, 2015; August 19, 2015; January 11, 2016; March 22, 2016; March 23, 2016; September 20, 2016; and March 2, 2017.”

Under the terms of the settlement agreement, “Rosenbaum agreed to pay a lump sum of $28,000. Rosenbaum also agreed to (1) designate a person at the firm responsible for paying Medicare secondary payer debts; (2) train the designated employee to ensure that the firm pays these debts on a timely basis; and (3) review any outstanding debts with the designated employee at least every six months to ensure compliance.

In addition, Rosenbaum acknowledged that any failure to submit timely repayment of Medicare secondary payer debt may result in liability for the wrongful retention of a government overpayment under the False Claims Act.” https://www.justice.gov/usao-edpa/pr/philadelphia-personal-injury-law-firm-agrees-start-compliance-program-and-reimburse

A warning for personal injury lawyers and primary payers
These settlement agreements should remind personal injury lawyers and other primary payers of their obligation to reimburse Medicare for conditional payments before and after a settlement, judgment, award, or payment.

As the MSP law makes clear, when any primary payer, including an attorney, fails to reimburse Medicare, the U.S. can recover from the primary payer, including the attorney, even if the primary payer already paid and even if the attorney already transmitted settlement proceeds to the client.

If the federal government cannot collect from the Medicare beneficiary or his/her attorney, the U.S. has variable options, including seeking reimbursement from the original primary payer, even if the settlement agreement indicates otherwise.

Congress enacted these rules to ensure repayment from responsible parties. As we have seen over the last several years, the federal government intends to hold all primary payers, including attorneys, accountable for failing to make good on their obligation to reimburse Medicare when it has made payments related to an underlying auto, liability, no-fault, or work comp claim.

Optum Workers’ Comp and Auto No-fault Settlement Solutions will continue to keep you updated on all aspects of Medicare Secondary Payer compliance, including issues pertaining to reimbursement of conditional payments on auto, liability, no-fault and workers compensation claims.