Insurers in the Cross-Hairs: New Medicare Secondary Payer case

Since 2001 Tompkins McGuire has been advising clients on how to comply with the Medicare Secondary Payer Statute; identifying cases where conditional payment statements; Set-Aside Agreement; or waiver must be obtained. The focus has been on making sure that Medicare was apprised of the imminent settlement, reviewed the terms of the settlement (the body parts or systems and the claimant;s (potential) need for future medical treatment, and weighed in on whether a Set-Aside Trust needed to be established. In addition, when Medicare issues a conditional payment statement, demanding repayment of certain medical expenses, we have provided guidance on which of the conditional payments (if any) need to be satisfied.
Previously there was no case in which Medicare sought reimbursement of “conditional payments” directly from insurance carriers contributing to a settlement.
That is no longer the case.
In the recently-filed U.S. Court action (Untied States v. James J., Stricker) Medicare is seeking recovery of conditional payments based upon the Medicare Secondary Payer Statute (MSP). This Complaint seeks recovery from both the liability carriers and the plaintiffs’ counsel.
 In Stricker a class action claim was settled without reimbursing Medicare for conditional payments.
In addition to seeking the conditional payments, interests and penalty, the government is requesting “[the insurers] must give CMS notice of all future payments to Medicare beneficiaries and [the carriers] must ensure before any future settlement payment is made to any claimant that appropriate payment is made to the United States.”
 We think this language signals Medicare’s ultimate goal: to proceed directly against liability carriers for pre and post-settlement Medicare expenses. Our interpretation of the Act has also been that this was possible.

Greg Lois is the managing partner of LOIS LLC and dedicates his practice to defending employers and carriers in New York and New Jersey workers' compensation claims. Greg is the author of a popular series of "Handbooks" on workers' compensation, and is the co-author of the 2016-2019 Lexis-Nexis New Jersey Workers' Compensation Practice Guide. Greg can be reached at 201-880-7213 or