A quick guide on how to deal with a Medicare lien

Attention young plaintiffs’ attorneys: Medicare probably has a lien on your case. Medicare started having liens on cases after many of your senior partners started practicing, and the procedures for getting these liens resolved have become more and more particular over the years. Make yourself a valuable part of the team by mastering the process.

Medicare has extremely specific reporting procedures that, if not followed correctly, can delay your entire case. Thus, any time a client has medical bills that have been paid by Medicare, you will want to start this process as soon as you decide to pursue the case.

The first step is to contact the Coordination of Benefits (C.O.B.) office at 1-800-999-1118. You will need the Medicare beneficiary’s information, including: full name, Medicare number (HICN), gender, date of birth, address, and phone number. If you do not have their HICN, make sure you have their social security number instead. You will also need your contact information: name, firm name, firm address and phone number. Finally you’ll have to tell the C.O.B. about the case: date of the incident, description of the injury, and the type of claim (auto, liability, etc.). It is imperative, in this early stage, that you give correct information. Be aware that Medicare handles each type of case, whether it’s a no-fault or liability or worker’s compensation case, separately. If you want to resolve the lien Medicare has for liability purposes, make sure you don’t accidentally tell them “no-fault.” Also, be precise with your description of the injuries sustained. The injuries you describe impacts the determination of which bills, paid by Medicare, are related to the incident. If you are not specific enough, Medicare’s first attempt at the lien amount will almost definitely be much larger than the actual amount of related bills paid.

After you have reported the claim to C.O.B., the Rights and Responsibilities letter will be sent out. You and the Medicare beneficiary will receive a copy. Upon receipt of this letter, you need to send Proof of Representation to Medicare Secondary Payer Recovery Contractor (MSPRC). Oftentimes a copy of your contract of employment, with your client’s HICN written in at the top of each page, will suffice. Go to <www.msprc.info> to determine if your contract meets their requirements. If your case is not a worker’s compensation case, you will send Proof of Representation to: MSPRC NGHP, PO Box 13882, Oklahoma City, OK 73113.

Within 65 days from the issuance of the Rights and Responsibilities letter, MSPRC will issue the Conditional Payment Letter (CPL). You need to make sure that MSPRC has your Proof of Representation in time so that you receive a copy of this. MSPRC will not send you the CPL or even talk to you about your client before they have processed your Proof of Representation.

Do not contact MSPRC before 65 days from the date of the Rights and Responsibilities letter. The CPL is generated automatically, and calling MSPRC will only waste your time and that of those processing your claim. If more than 65 days elapses from the date of the Rights and Responsibilities letter, you can call MSPRC at 1-866-677-7220, from 8 a.m. – 8 p.m. EST. When you call, have ready the beneficiary’s full name, date of birth, HICN, address, and the date of the injury. In my personal experience, calling before 9 a.m. or after 5pm results in the least amount of time spent on hold.

Once you receive the CPL, compare the claims listed with your file. If you believe that Medicare is listing unrelated medical bills, you may dispute the CPL. To do so, send a cover letter Re: DISPUTING CONDITIONAL PAYMENT, Beneficiary name, HICN, Date of incident. Oftentimes, the body of the letter will not make up for failure to put “Disputing Conditional Payment” at the top. Include with this letter a photocopy of the most recent CPL, with a single straight line drawn through each and every unrelated claim. MSPRC will then issue another CPL. If the new CPL is incorrect, repeat the process.

Meanwhile, your case should be progressing. Once the case settles or you obtain a judgment or award, it is time to request the Final Demand Letter. The Final Settlement Detail Document is available to download as a *.pdf file at <www.msprc.info>. The form requires: the total amount of the settlement, the amount of any other insurance liens on the case, the amount of attorney fees, the other expenses incurred that will come out of the settlement amount (along with an itemized statement explaining this amount), and the date that the case was settled.

Unfortunately, MSPRC does not have a deadline for issuing the Final Demand Letter, and is processing them on a first-come, first-served basis. The operators are not allowed to “expedite” the letters, even if an excessive amount of time has passed. Many insurance companies will not issue settlement checks until the Final Demand Letter is received, resulting in continued delay of payment, and likely, client frustration. Odds are, the number that was on the most recent CPL is the same (unless there have been bills paid in the interim) as the amount on the Final Demand Letter. As such, some insurance companies will accept a recent CPL as proof of the amount of the Medicare lien or at least proof that you will take care of the Medicare lien. However, if the insurance company needs the Final Demand Letter, just sit tight and eventually MSPRC will send it to you.

There is a possibility that the Final Demand Letter will be incorrect when it does come. You absolutely must pay the amount demanded within 60 days, no matter what. You may also dispute the amount in the Final Demand Letter. But if you do not pay the amount demanded within 60 days, interest will accrue, starting from the date of the Final Demand Letter, regardless of whether you were correct and the amount demanded was inaccurate.

I cannot guarantee that if you follow all the correct procedures everything will go smoothly. I can only guarantee that if you do not follow the correct steps, MSPRC will hold up your case until you follow their procedures. Follow the above instructions and you will be able to report that the fault for the delay lies solely with Medicare, and that everything has been done to further your client’s interests in a timely fashion. More likely than not, the other attorneys involved in the case will simply be glad that they themselves do not have to deal with Medicare. ■