Question GRG: I filed a medical malpractice case in California which included a claim for loss of consortium by the wife. Medicare paid for most of the care. The case settled without a specific allocation of the proceeds between the loss of consortium claim and the medical malpractice claim. Query: 1) Does Medicare have any lien rights on the loss of consortium claim; and 2) Is there a standard practice applicable to the allocation?
Answer: Medicare is not bound nor will they honor any allocation agreement between settling parties, however, they will honor a court ordered allocation that is based on the merits of the case. In any allocation hearing, Medicare MUST be put on notice of the hearing. Absent a court ordered allocation for loss of consortium, Medicare has recovery rights
The MSP Manual 50.4.4: Designation in Settlements states “the only situation in which Medicare recognizes allocations of liability payments to non-medical losses when payment is based on a court order on the merits of the case. If the court or other adjudicator of the merits specifically designate amounts that are for payment of pain and suffering or other amounts not related to medical services, Medicare will accept the court’s designation. Medicare does not recover portions of court awards that are designated as payment for losses other than medical services.”