Medicare's Interest In A Med Pay Accident

Question: I have a client who was involved in a serious automobile accident and is now paralyzed from the waist down. He will be in the hospital for months and his medical bills are already in excess of $500,000. Medicare is his primary health insurer and the no-fault Med Pay of $10,000 is exhausted. There is only $125,000 available from the tortfeasor and my client's underinsured motorist coverage.

I have heard that it is possible to affect a pre-settlement compromise with Medicare and/or CMS in these types of situations. However, despite extensive research, I cannot seem to find any information on who to contact or how to attempt to negotiate a settlement of Medicare's interest prior to settling the case. Is that possible and, if so, how can I go about doing this? Otherwise, I fear that Medicare will be entitled to all of the funds, less procurement costs, leaving my client with nothing.

Thank you so much for your time and your invaluable questions and answers forum!!!

Nevada Attorney

Answer: In order to request a compromise you must go through all the hoops in securing Medicare's conditional payments. The first step is reporting the case to the COB at 800-999-1118. They will assign the case to the Medicare Secondary Payer Recovery Contractor (MSPRC). Once the case has been assigned to the MSPRC you will need to provide them with the proper authorization and in return they will provide you with Medicare's conditional payments. It is at this point that you can move forward with your pre settlement compromise request. The request would be sent to the MSPRC who in turn will forward it to the appropriate CMS Regional Office.

To request a compromise, you must specify the amount you want Medicare to accept in writing and the reason for the compromise and how you determined the amount to be repaid. A full reduction cannot be requested. A compromise may be requested any time after it has been determined that Medicare has made conditional payments, before or after settlement.

CMS is given authority to consider the compromise of Medicare's claim under the Federal Claims Collection Act (FCCA) at 31 USC, 3711 et seq. and 42 CFR 401.613. The MSPRC is not permitted to compromise a claim. Compromise requests are reviewed and determined by CMS Regional Office. A compromise decision made by CMS is final and is not subject to appeal.

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