Medicare Waiver?

Question: We have a client who is 84-years-old. He was in a car accident last July. An uninsured motorist hit him. The other driver was found to be completely at fault.

Our client's Medicare lien amount is roughly almost 100K. Most of the injuries he sustained were pre-existing but were exacerbated by the accident. His UIM coverage is 100K. Despite the client's age, he was still working part-time up till the time of the accident. He was receiving SS-retirement.

Here is where the story gets tragic. The man, being 84, has a 40-year-old mentally handicapped daughter with epilepsy who receives SSI-disability. His daughter has a child who is 14-years-old and was recently diagnosed with epilepsy about 3 months ago. The 84-year-old man, who has no savings, was caring for both his daughter and his granddaughter. The man owes 90K on his home. He is about to get foreclosed on. We are doing everything we can to help keep him and his family in that house. His current income now is maybe 1K a month from his SS benefits and his daughter’s SSI. His monthly mortgage eats up all of that money.

We have a tentative agreement with his insurance company to get his entire policy limits. Our attorney handling the case has already agreed with the client to significantly reduce his fee so that the client will have as much money as possible to live on. The problem is reducing the Medicare lien.

I would imagine that this scenario would justify a total waiver by Medicare. However, the MSPRC lady I spoke with today informed me that maybe 1% of all financial hardship waiver requests are completely waived. However, if the waiver is submitted before a pre-settlement compromise letter, then the client is foreclosed from submitting the compromise letter, and there is no negotiating with the response by Medicare from the waiver request. If this is true, what would be the best way to pursue negotiations with Medicare so that we can help this man get everything he can from his settlement?

Answer: Being that there are only policy limits available and if your client is still treating, I suggest that you settle the case and “stop the clock” on Medicare’s interest in the case. Medicare can only recover from date of injury through date of settlement. However, without knowing what Medicare’s conditional payments are to date it is hard to determine which would be the best avenue for you to take, a compromise or a waiver. If you pursue a compromise either, pre or post, and you do accept the compromise, there are no appeal rights. If you do not accept the compromise you can still pursue a waiver. With that said, based on the fact that your client has a disabled daughter and granddaughter whom I am assuming he supports in some manner, should you decide to pursue a waiver, submitting the waiver based on the following argument would be appropriate:
Full recovery defeats the purpose of Title II or XVIII of the Social Security Act. Reimbursement to Medicare would cause financial hardship and prevent the beneficiary from meeting necessary and ordinary living expenses, which include taxes, medical expenses not paid by Medicare or other insurer, support for dependents, miscellaneous expenses for which the beneficiary is legally responsible, as well as out of pocket expenses incurred, the age and income of the beneficiary, monthly income and expenses, and the physical and mental impairments of the beneficiary.

A waiver is “forgiveness” of a party's obligation to satisfy Medicare's claim, in whole or in part, if certain conditions are met. CMS may waive all or part of its recovery in any case where an overpayment under Title XVIII has been made with respect to a Medicare beneficiary who is without fault AND when adjustment or recovery would either defeat the purpose of Title II or Title XVIII of the Act (repaying Medicare would create a financial hardship), OR be against equity and good conscience for the beneficiary to repay Medicare.

Waiver requests must be submitted in writing to MSPRC, the Medicare contractor. The request cannot be submitted until settlement has been reached, and MSPRC has issued its final demand (with procurement costs deducted). Upon receipt of the waiver request, Medicare will send waiver forms, using SSA Form 632K, which will need to be completed. Waiver determinations generally are completed within one hundred twenty (120) days of the date a waiver request is received. If the MSPRC waiver determination is unfavorable you may appeal the determination.

A compromise represents the acceptance of less than the full debt owed to Medicare. A compromise may be granted if the debtor does not have the present or prospective ability to pay the full amount of Medicare's claim. Whether or not a compromise will be granted depends on a number of factors and each matter is considered on a case-by-case basis. A compromise may be requested at any time after you have determined that Medicare has made conditional payments, before or after settlement. There are no appeal rights once you have accepted the compromise.

A compromise can be reached either pre-settlement or post-settlement. Only CMS has the authority to negotiate a compromise, so the beneficiary's request will be forwarded to the appropriate Regional Office.

I hope this helps. I would be happy to assist you further should you need us.