If you received Medicare or Medicaid benefits for medical treatment related to your car accident, a federal or state lien exists on your personal injury settlement whether you know about it or not. Failing to satisfy these liens can result in federal lawsuits, repayment demands years after your case settled, and even criminal liability. Marathon Law Group helps Las Vegas personal injury clients navigate the complex lien resolution process and maximize net recovery.
The Medicare Secondary Payer Act
Under the Medicare Secondary Payer Act (42 U.S.C. § 1395y(b)), Medicare is by law a secondary payer — it should not pay for medical treatment that an automobile liability insurer is obligated to pay. When Medicare pays for your accident-related treatment anyway (which it routinely does while your liability claim is pending), it does so conditionally — with the right to recover from any eventual settlement. Medicare tracks its payments through the Benefits Coordination and Recovery Center (BCRC) and will issue a conditional payment letter detailing what it has paid. These conditional payments must be reimbursed from your settlement, reduced by a proportionate share of your attorney’s fees and costs.
The SMART Act and Reporting Requirements
The Strengthening Medicare and Repaying Taxpayers (SMART) Act (42 U.S.C. § 1395y(b)(8)) requires liability insurers to report all settlements with Medicare beneficiaries to the Centers for Medicare and Medicaid Services (CMS). This creates a federal paper trail linking every settlement to CMS’s records of conditional payments. After your settlement, CMS issues a final demand for repayment. If you — or your attorney — fail to reimburse Medicare, CMS can sue for double the amount of the conditional payment. This double-damages provision creates significant exposure and is why Medicare lien resolution is a critical step in every personal injury settlement involving a Medicare beneficiary.
Medicare Set-Aside Agreements
When a settlement includes future medical expenses and the plaintiff is currently on Medicare or will shortly become eligible, CMS may require a Medicare Set-Aside (MSA) arrangement — a separately held fund from the settlement that must be used exclusively for future Medicare-covered medical expenses related to the injury before Medicare will cover those same expenses. MSAs are not legally required in liability (as opposed to workers’ compensation) cases, but they provide important protection against future Medicare secondary payer disputes. CMS approval of an MSA in a liability case, while available, is uncommon in smaller cases. Your attorney can evaluate whether an MSA is advisable given your specific settlement amount, injury severity, and Medicare status.
Nevada Medicaid Liens: NRS 422.293
Nevada Medicaid (the Nevada Check Up and Nevada Medicaid programs) asserts statutory liens on personal injury settlements under NRS 422.293. The Nevada Division of Health Care Financing and Policy (DHCFP) must be notified of any pending personal injury claim when the claimant has received Medicaid benefits for accident-related treatment. Nevada law limits Medicaid’s recovery to the amount actually paid for the accident-related services, reduced by a proportionate share of attorney fees and costs. The state’s lien can be negotiated — in catastrophic injury cases where the plaintiff’s net recovery is modest relative to the total damages, Medicaid will often accept a negotiated compromise rather than its full lien amount.
Contact Marathon Law Group — Las Vegas Personal Injury Attorney
Medicare and Medicaid lien resolution is one of the most complex aspects of personal injury settlement for government benefit recipients. Marathon Law Group resolves federal and state liens on behalf of Las Vegas clients to maximize the money you keep from your settlement. Call today for a free consultation.