Article from – Risk & Insurance – Read Complete Article Here -

Medicare, the Bull in the Settlement China Shop

The Medicare Secondary Payer Act and the new SCHIP Extension Act of 2007 will have very different effects on workers’ comp and liability cases.

By JAMES POCIUS, an attorney and shareholder with Marshall Dennehey in Scranton, Pa., and an expert on Medicare and workers’ compensation.

Using the Medicare Secondary Payer Act and the new SCHIP Extension Act passed in December of 2007, Medicare is bulling its way into workers’ compensation and liability settlements. In an attempt to recover conditional payments and not expend future funds in cases where another carrier or self-insured might be liable, these new Medicare requirements are creating a minefield of problems, which could explode during any workers’ compensation or liability settlement.

In order to accurately examine the effect of these two statutes, and their possible interplay, some explanation is necessary.

The Medicare Secondary Payer Act was passed in the late 1980’s. Essentially, it gives Medicare the power to collect any conditional payments (commonly known as Medicare liens) from any first party carrier or any other participant who could make a payment or receive a payment in a case. If a Medicare beneficiary is involved in a workers’ compensation or liability case, Medicare is able to collect from any of the insurers or plaintiffs or plaintiffs’ counsel (fees) by virtue of the Medicare Secondary Payer Act. Further, if Medicare has filed suit against any primary payer or recipient, the law enables Medicare to receive a 100 percent penalty in addition to the amount owed.

This is an excellent article and I recommend that everyone read the article.