Lions Tigers and Bears, Oh
My
Settlements, Social Security and
Medicare
Joshua W. Potter Esq.
Potter Cohen & Samulon
626 795-0681
Once upon a time
You could settle your case
And walk away
No free lunch
• Medicare must me considered when
entering a settlement
• Blow off the Sovereign at your own peril
• Don’t delegate what you don’t understand
to your client
• RICO waits for the unwary and the
creative
Don’t forget Medicare
Do you know it if you see it?
• Is your client under or over age 67?
• Do they have a Medicare Care?
• Has your client applied for Title II
disability?
• Has your client 20/40 Qtrs of earnings?
• Have disability benefits been granted?
Why should you care?
• Medicare is a secondary provider of health
insurance
• Medicare is not bound by your settlement
• Medicare is not bound by your
characterization of the award
• Medicare does not speak with one voice
Rule #1
• All settlements whether for personal injury
or workers’ compensation over $25,000.00
must consider the interest of Medicare
through a proposal to CMS Medicare
• At a post office box that changes
Rule #2
• There are no rules!
• Medicare uses FAQ’s in place of
Regulation.
• There are very few cases
• The FAQ’s are not closely associated with
the CFR
Rule #3
• Do not conspire with your client
• Do not conspire with the defense attorney
• Do not conspire with the insurance
adjuster
Rule #4
• Remember
Rashomon
• There are multiple
view points for the
same events
You must set a deductible
• A low deductible
• May be contrary to
the specials
• May be contrary to
high future medical
care
• A high deductible
• Supports a large
settlement
• Requires a lot of work
• Reduces the clients
available money
• May never be spent
Review any proposal
• Don’t trust a third party
• Is the forecast
reasonable?
• Is the Math Correct?
• Is the number of x-rays
toxic?
• When will the patent
expire on medications?
• Sit down with your Client!
• Reflect before you act
Is your client sophisticated?
• Self administered
• Keep records of the
appropriate medical
expenses
• Distinguish covered
from non-covered
• Professionally
administered
• Costs money
• A question of trust
Separate account
• You must pay the
deductible
• You must keep track
• Do you need a
separate account?
• Well…..
Its time for Grey Hair
• 42 C.F.R. § 411.24(c). This
regulation provides in pertinent
part that the Health Care
Financing Administration "may
recover an amount equal to the
Medicare payment or the
amount payable by the third
party, whichever is less." Id.
Zinman v. Shalala
67 F.3d 841
C.A.9 (Cal.),1995.
• The MSP legislation is unclear
as to whether HHS is entitled
to full reimbursement of
conditional Medicare payments
when a beneficiary receives a
discounted settlement from a
third party. HHS has construed
the legislation to permit it to
recover up to the full amount of
its conditional Medicare
payments. This is a
permissible construction of the
statute. Accordingly, we uphold
this construction, and affirm
the district court's summary
judgment in favor of HHS.
It gets worse
• (iv) Subrogation rights
• The United States shall be subrogated (to the
extent of payment made under this subchapter
for such an item or service) to any right under
this subsection of an individual or any other
entity to payment with respect to such item or
service under a primary plan.
42 U.S.C.A. § 1395y
Protect your fee and license
• Don’t be clever
• Don’t be cute
• Don’t blow off
Medicare
• Don’t think that your
client will understand
the rules
The Feds Have a long Memory
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ZINMAN V. SHALALA
67 F.3d 841, 49 Soc.Sec.Rep.Ser. 128,
1995 WL 582164 (C.A.9 (Cal.),1995.)
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In re Zyprexa Products Liability Litigation,
451 F.Supp.2d 458, 468, Med & Med GD
(CCH) P 301,891, 301891, Prod.Liab.Rep.
(CCH) P 17,534, 17534 (E.D.N.Y. Sep 11,
2006)
Read ‘em and weep
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411.20 Basis and scope.
(a) Statutory basis.
(iii) A beneficiary who is under age 65,
entitled to Medicare on the basis of disability,
and covered under the plan by virtue of his
or her current employment status or the
current employment status of a family
member.
(2) Section 1862(b)(2)(A)(ii) of the Act
precludes Medicare payment for services to
the extent that payment has been made or
can reasonably be expected to be made
under any of the following:
(i) Workers' compensation.
(ii) Liability insurance.
(iii) No-fault insurance.