I’ve been researching whether Medicare tries to “recover” medical expenses they have already paid for, if the patient receives a personal injury settlement. For example. let’s say you are injured (e.g., in a car accident that isn’t your fault) and you get treated and Medicare pays the medical expenses. If you make a claim (or lawsuit) against the at-fault party and receive a settlement, Medicare can and will require you to pay back (to Medicare) the cost of medical expenses Medicare has already paid for. I understand this (though there are a LOT of details that affect how much you have to pay back).
My question, though, is how does Medicare handle the amount your supplemental (Medigap) insurance covers. For regular, non-hospital bills, Medicare pays 80% of the cost, and your Medigap insurance covers the remaining 20% (if you are on Medigap Plan G).
So, does Medicare:
- Try to recover 100% of the allowed charge (which includes Medicare’s coverage and the Medigap’s coverage)?
- Only try to recover the charge paid by Medicare itself? (And then let the Medigap insurer recover from you individually? - or -
- Only try to recover the charge paid by Medicare itself? (And the Medigap insurer doesn’t get to recover from you?)
Thanks,
J.
I don’t know the specific answer, but generally, Medicare can recover expenses they paid for (whatever that negotiated payment is, if anything). The other insurer can recover the expenses they paid for.
So, I think that’s No. 2.
This can get super complicated fast but I’ll leave it at this.
My FIL had a bad car accident, racking up hundreds of thousands in medical costs.
They eventually secured a settlement from the guy who hit them. Both insurers (Medicare and gap) sought subrogation for the full amounts they had paid out, which would have left my in-laws with about $1 of the settlement. Like CoolHandCox said, the two insurers approached him separately, as in your #2 scenario. No coordination, just each one acting on its own.
This was over 10 years ago, but I think we got both insurers to settle for about 30%.
Do awards typically get broken down into “reimburse medical bills” and “pain and suffering”? If so, can the medical insurers recover from “pain and suffering” portion of the award also?
I know that in auto settlements, the insurance company gets reimbursed what they’ve paid out from the actual damages portion, and the accident victims keep whatever is paid for pain and suffering. I would think the same would apply here. After all, the victim did the suffering.
Not normally (though some states may vary). However, for those who are Medicare eligible or expect to be within 30 months, the Medicare Secondary Payer Act requires the parties to take Medicare’s interest into account. This effectively means allocation of funds specifically to future medical treatment that would otherwise be covered by Medicare. It’s called a Medicare Set-Aside. If the settlement is over a certain amount, the Centers for Medicare & Medicaid Services will review the allocation and advise the parties if they agree with it.
To the OP’s question, Medicare will upon request provide a conditional payment letter showing whether it or a Medicare supplemental plan has paid for treatment related to the personal injury. I’m pretty sure the supplemental insurer has to do its own recovery work, but they have lots of tools to do so under the MSPA.
In NY at least, there’s no-fault medical bill coverage and then there’s injury coverage. So, the policy may have $50k in medical coverage and an additional $100k in personal injury. As the injured party, your medical bills first get charged to the medical coverage and then they go to your own health insurance (Medicare or whatever).
Separately, you file the claim for the $100k and you may get that, but that’s separate from the medical coverage. Then, Medicare can take some portion of that to cover any bills it had to pay, above the car insurance medical coverage. It’s just a $100k pool of money, not broken out.
You could try to sue for more, if there is a substantial claim at stake, but that’s going to be expensive and take forever, and then the person you’re suing probably doesn’t have enough assets to cover anything anyway. If you end up with a settlement for pain and suffering, plus some other award, I don’t know how Medicare breaks that up. But nearly all the time, you’ll just go after what’s covered by insurance.
Some of that is specific to auto accidents an no-fault medical coverage and wouldn’t apply if you for example, fell down a staircase in a restaurant. Which is what happened to my mother, in NY. Medicare paid her medical bills while the lawsuit was pending and once she settled Medicare got reimbursed out of the settlement. ( And also, Medicare wouldn’t pay for any future treatment needed due to those injuries) The same would have happened if it was non-Medicare insurance- that’s why ER visits frequently result in the insurance company asking if the baseball to the face happened during an organized league with insurance, or if your tumble down the stairs at your nephew’s house was due to someone’s negligence. I assume the Medicare supplement policy will also try to recover their costs - but I doubt Medicare will do anything beyond sharing info
Yeah, my mother was recently hit by a car, so I’ve unfortunately learned a lot about auto insurance no-fault policies in NY.