Question: Does Medicare have any reimbursement interest in a legal malpractice settlement, if the underlying case was a personal injury claim?
Answer: The federal government broadly interprets its right of recovery under the Medicare Secondary Payer Act (MSP). The MSP advises that Medicare will not pay for a beneficiary’s medical expenses where payment either has been made or could have reasonably been expected to be made under a workers’ compensation policy or plan, an automobile plan, a liability insurance policy or plan (including self-insurance) or a no-fault plan. There is one exception to this, and that is when Medicare makes what is called a “conditional payment.” That is a payment Medicare makes on behalf of a beneficiary when a Primary Plan or Payer has not yet accepted responsibility for the beneficiary’s medical expenses. However, once that Primary Plan or Payer accepts responsibility and that is demonstrated by a judgment or settlement, a release or by other means, then any conditional payments made by Medicare must be reimbursed.
In a legal malpractice action, an attorney may be held liable for failure to render professional services with the skill, prudence and diligence that an ordinary and reasonable lawyer would use under similar circumstances. This includes addressing any Medicare reimbursement claims in existence. The federal government interprets the MSP Act to provide it a right of recovery, irrespective of whether beneficiary’s counsel rendered professional services with the skill, prudence and diligence that an ordinary and reasonable lawyer would use under similar circumstances. Therefore, it would be advisable that you address all Medicare reimbursement obligations (past medicals and future medicals) as part of resolving a legal malpractice claim if the underlying case was a personal injury claim.