Federal law requires that personal injury plaintiffs, who are eligible for Medicare, take into consideration the interests of Medicare when settling their claims. The Medicare Secondary Payer Act (MSP) mandates that Medicare be reimbursed for most medical expenses it pays out, which are later determined to be the responsibility of a third party.  When Medicare beneficiaries are involved in personal injury lawsuits, Medicare may have a claim to some of the settlement money.  Medicare does not, however, have a statutory right to reimbursement for services paid for an unrelated injury, which is the basis of the client’s lawsuit.

Last fall, Medicare clarified its policy regarding toxic exposure cases where all of the exposure occurred before December 5, 1980.  If a plaintiff was exposed to toxic substances over a long period of time and the date of last exposure is before December 5, 1980, Medicare will not pursue a claim for reimbursement. On the other hand, if any of the relevant exposure occurred after December 5, 1980, Medicare can seek reimbursement for related medical expenses. This summer, a new wrinkle emerged as Medicare proposed new rules that may require settlement funds to be reserved for future payment of medical costs a Medicare beneficiary may incur. 

Some Medicare beneficiaries receive coverage directly from the Medicare Trust Fund, while others participate in Medicare Advantage Plans. It has always been the case that direct Medicare beneficiaries must consider the interest of Medicare when settling their claims. A number of court decisions have placed into question whether Medicare Advantage Plans are permitted to enforce the same reimbursement claims that belong to the federal government. At least one recent court decision appears to provide Medicare Advantage Plans with the same rights as the federal government.