Medicare & Medicaid Liens - Lurking Danger in Personal Injury Claims

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Often times, our clients have received Medicare or Medicaid (hereinafter referred to collectively as Medicare) benefits in the treatment of their personal injuries.  These liens must be addressed in the distribution of personal injury funds.   Failure to address Medicare or Medicaid liens can have significant future financial consequences.

The Centers for Medicare and Medicaid Services (CMS) enforces these liens.  If you have received any Medicare or Medicaid benefits in the treatment of your injuries, then you should make sure that your attorney is both aware of these benefits, and that the liens are properly addressed.  This requires action early in your case.

Issues with Medicare in an Injury Claim

The parties and entities involved in a personal injury claim have a number of responsibilities.  First they must notify Medicare of its possible interest in the lawsuit.  It is not Medicare’s responsibility to notify the parties.  The parties must identify any possible liens, and notify Medicare of these possible liens.  Next, once the lawsuit is resolved either by trial or settlement, the lien must be resolved.  In fact, Medicare must be the first payee in the distribution of funds.

Failure to Address Medicare Liens

There can be significant penalties for failure to abide by these rules and the rules are very strict.  The law requires that the Medicare lien be paid within 60 days of the final notice of lien.  Failure to pay within the 60 days can result in interest on the lien amount.  More serious, delinquency or failure to pay can result in significant penalties including double damages against any party that failed to consider Medicare’s lien.

These laws create significant possible liability for you in the event of your attorney’s failure to address these medical liens.   These liens should be taken into account both by you and your attorney early on for several reasons.  First, these liens will in part determine the value of any settlement or judgment and should be factored into your decisions regarding settlement.  Second, failure to address them could have a devastating financial impact on you long after the settlement of your claims.

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