Medicare's Reimbursement Claim

Question: I am a member of CAOC (Consumer Attorneys of California) and recently read your article regarding Medicare, Medicaid and SCHIP Extension Act of 2007 in CAOC's Forum magazine. We currently represent a pedestrian who was hit by a car in a crosswalk, suffering two broken bones in one leg, and one broken bone in the other leg. Medicare initially paid the first hospital bill (there were two separate bills), but then took back its payment and did not pay the second hospital bill. Medicare has paid for other treatment our client received as a result of this incident. The hospital is now asking for payment of the entire bill, which is approx. $200,000. The hospital will not negotiate its bill. We have already opened a claim with MSPRC.

I have a few questions that I was hoping you would be willing to answer.

• Can Medicare legally withdraw its payment?
• Can Medicare refuse to pay for hospital treatment, or must payment be made after a certain period of time elapses even if a third-party is responsible?
• Do you have additional information about the services your firm provides for lien verification and resolution?

Any information you can provide would be greatly appreciated.

California Attorney

Answer: Once the provider submits a claim to Medicare they are bound by their assignment agreement, therefore they lose all rights to pursue the settlement for actual charges.

Physician and Other Supplier Charges to Beneficiaries for Services Covered By Medicare
The following applies to physicians and other suppliers who participate in Medicare:

• if the physician or other supplier bills Medicare, the physician or other supplier must accept the Medicare approved amount as payment in full and may charge beneficiaries only deductibles and coinsurance.
• if the physician or other supplier pursues liability insurance, the physician or other supplier may charge beneficiaries actual charges, up to the amount of the proceeds of the liability insurance less applicable procurement costs but may not collect payment from the beneficiary until after the proceeds of the liability insurance are available to the beneficiary.
• Provider, Physician, or Other Supplier Bills Medicare and Maintains Claim/Lien Against the Liability Insurance/Beneficiary’s Liability Insurance Settlement
• Provider, Physician, or Other Supplier Bills Medicare and Maintains Claim/Lien Against the Liability Insurance/Beneficiary’s Liability Insurance Settlement
• As cited above in B, providers, physicians, and other suppliers must withdraw all claims/liens against liability insurance/beneficiary’s liability insurance settlement (except for claims related to services not covered by Medicare and for Medicare deductibles and coinsurance) when they bill Medicare. You may learn of a situation where the provider, physician, or other supplier billed Medicare but did not withdraw the claim lien. In such situations you must:
  • Advise the provider, physician, or other supplier and beneficiary that the act of billing Medicare limits the payment that the provider, physician, or other supplier may receive for the services billed to the Medicare approved amount. This applies even if Medicare did not pay the claim or the provider, physician, or other supplier refunded the Medicare payment to Medicare.