Under Federal law, Medicare may be entitled to some portion of a nursing home settlement directly related to payments for injuries. But what exactly does that mean? Under what circumstances can this amount be reduced or eliminated? In this episode, we discuss about Medicare settlement money.
Schenk: Hello out there. Welcome back to the Nursing Home Abuse Podcast. My name is Rob. I’ll be your host for this episode. We’re going to be talking about the ways in which Medicare may or may not be entitled to a portion of any recovery that is made on a nursing home abuse case. This is kind of part two in a two-part series. Last episode, we talked about Medicaid. This week, we’re talking about Medicare. Real barnburners here, folks. This is a lot of exciting stuff. I’m being facetious when I say that. It’s actually very boring, however, it is extremely critical that we have an understanding of how these programs may factor into settlements and ultimately what compensation a resident or a resident’s family receives.
But before we get into the nitty gritty, I have a ask. If you are listening to this program, if you are a regular listener to this program, we would very much appreciate it if you could like and subscribe wherever you get your podcast from. If you want to see what we look like, go over to our YouTube channel. It’s the Nursing Home Abuse Podcast YouTube channel. You can watch every episode instead of just listen or vice versa – if you watch and you don’t want to see our faces anymore, you can actually go listen, Stitcher, Apple Podcasts, iHeart Radio, wherever you get your podcasts from. So like and subscribe there. Leave a review if you’re so inclined. We would greatly appreciate that. It actually does help get the word out there.
Now let’s talk about Medicare. What is Medicare? How does it get its grubby hands into recoveries for nursing home abuse? Medicare itself, just like Medicaid, came to us so to speak as an amendment to the 1965 Social Security Act. The program itself is administered through the Department of Health and Human Services, and even within the Department of Health and Human Services, Medicare is run by the Centers for Medicare and Medicaid Services. That makes sense, doesn’t it?
So as we are all reminded every paycheck, Medicaid is funded in part by a combination of payroll taxes premiums and surtaxes from beneficiaries. In a nutshell, Medicare is a federally funded social health insurance program that provides essentially universal hospital coverage for Americans that are 65 years and older as well as other categories of persons, including the long-term disabled.
Medicare can be kind of a hairy topic just like Medicaid is for attorneys because it can be so confusing. I guess it’s confusing for the recipients out there as well, but Medicaid itself is kind of divided into four parts. There’s Part A, which covers inpatient hospital stays, a certain amount of nursing home stays, so typically Medicare will pay for the first 100 days of a nursing home stay. There’s Part B, which covers physicians’ visits, outpatient hospital services and some diagnostic services. There is Part C, which I think nowadays we refer to it as Medicare Advantage. This is kind of like a private insurance, supplemental insurance concept. That’s Part C – it can be very confusing for me. But then there’s Part D, which covers essentially prescription drugs. Typically in our cases, we will see Part A and to a lesser extent Part C. It’s just how the ball bounces.
So how is Medicare entitled to anything from a nursing home abuse settlement or recovery or arbitration or whatever the case may be? The authority comes from federal regulations, the Medicare Secondary Payer Act is what we call it. So what the Medicare Secondary Payer Act says is that if a nursing home resident is injured due to the neglect or abuse of the nursing home, and that resident receives care at a hospital and Medicare pays for that hospital care, if there is any settlement based on that negligence or abuse, Medicare gets to be repaid the amount that it paid for those services related to that injury.
So I gave a very long-winded example last episode about Medicaid. I will actually reuse it for Medicare because it is essentially the same concept. Let’s say that we have a resident that falls and breaks their leg due to the negligence or abuse of the nursing home. So the nursing home is the at-fault party. They’re what we would call the tortfeasor. They are at fault for the broken leg that the resident has received. Let’s say the resident goes to the hospital and Medicare pays for treatment for that broken leg. If the resident then sues or doesn’t even have to sue, if the resident proceeds with a claim against the nursing home and receives some type of payout, some type of recovery, some type of compensation from that nursing home for causing those injuries, Medicare is entitled to get in line first and recoup, to recover the costs that they paid for that treatment. So that is – and that’s the authority they have under the federal regulations, they can step in to the extent that they have paid money for injuries that are somebody else’s fault.
Now again, that’s different than how it normally works. If a Medicare recipient goes to the hospital just for whatever reason not related to abuse or neglect, the resident does not have to repay Medicare. They’ve been paying into that their whole life so they’re entitled to those benefits without any type of Medicare coming after them. It’s the concept that when it’s someone else’s fault and that at-fault party pays the resident, that’s when Medicare is triggered and can come step in front of that resident and stick out their hand and get that settlement money first.
But again, Medicare is only entitled to the portion of the settlement representing exactly the amount of money that Medicare has paid out. Again, by way of example, just because the medical bills for that broken leg in our example are $100 doesn’t mean that Medicare is entitled to $100, because quite often, almost 100 percent of the time, Medicare is not paying the $100. They’re paying a fraction of that. We’ll say they’re paying $10. That’s typically how it works.
Through some type of, and again, this is getting into the areas that are above my pay grade, but medical providers and Medicare/Medicaid enter into contractual obligations and contracts and deals and whatever whereby if a bill is $100 and Medicare pays that bill, Medicare is typically only paying a fraction. So in our example, it’s $10. And then the medical provider to the hospital writes off the rest – writes off the rest. So when Medicare pays $10 of the $100 bill, they’re not entitled to $100. They’re entitled to only $10 from whatever the settlement is that the resident receives. Hopefully that makes sense.
So again, I have families coming to me and saying, “Rob, is it worth pursuing if it we’ve got to give Medicare money?” Typically the answer is yes because Medicare typically, it’s not a barrier to recovery because it’s not as much as you would think it is.
So Medicare is entitled to what they’ve paid that is related to the injury – related to the injury. Then what else can we do to minimize Medicare’s right to cut in front of the resident? The first thing is that by federal regulation, there is an automatic deduction for the price of the attorney the resident pays and the expenses involved in getting the settlement or the recovery.
So for example, if the resident goes and hires an attorney and they’re on a contingency fee of 30 percent or 40 percent or 50 percent or whatever the case may be, whatever that amounts to, that can be deducted pro-rata from what is owed to Medicare. So that’s the one thing. Then whatever expenses the resident pays, so for example, whatever it cost to file the lawsuit, whatever it cost to pay an expert to testify on the resident’s behalf, all these things pro-rata can reduce Medicare’s portion of what they are owed. And the reason why that is the case and the reason why Medicare is allowing that, typically Medicare wants their money, the reason why that’s allowed is because Medicare itself does not have some type of legal arm. It does not have some type of army of lawyers that go and sue on behalf of residents in order to get reimbursed from the tortfeasor. They don’t have that. They don’t have the bandwidth. So to incentive the residents, to enforce their rights, they allow the residents to reduce their Medicare balance by the amount it costs to hire the attorney and to essentially get the award, get the settlement, get the verdict.
So let’s take our example. If there is a $200 settlement, there’s $100 in bills. Medicare paid $10 and it cost $4 for the resident to get the $200 settlement. Medicare will reduce pro-rata at $10 typically by that $4 and will only need to get $6 in reimbursement.
So there are many ways in which the amount owed Medicare can be reduced other than through the automatic deduction of what’s through procurement cost with the attorneys and the expenses. And these get into the realm of – I don’t want to bother anybody or bore anybody but there are some conditions in which no one or the medical provider cannot be – the resident cannot be asked to pay for. At least one category is what’s called hospital acquired conditions. So pressure ulcers are one big category in this. Another way of saying that is if pressure ulcers are the injury, depending on where they developed, Medicare cannot get that money back from the client.
The other way is there’s a concept right now in the law where Medicare has to be clear in their billing, and if they are not clear in their billing and they bundle a bunch of charges together, you can theoretically knock out those charges.
So those are just two examples so, again, the only reason I even bring that up is because, again, families come to me and they’re concerned that, “Rob, it’s a lot to fight these nursing homes. We have to go through so much and to just have to cut a check for Medicare, that disincentives us from pursuing the claim.” And I would say there are many ways around paying Medicare its full owe, so to speak. There are loopholes. There are ways to reduce this amount such that let’s not concern ourselves with that right now, although it should be on our mind.
I don’t want to fool anybody. I do, with all my clients, I have a conversation of, “This is probably going to be what Medicare’s owed amount is. This is going to be owed to Medicaid. I don’t think this will factor in but I want to make you aware of that.” So these are the types of conversations that you should have with your attorney if you’re a resident or a loved one who has a resident or a loved one of a resident of a nursing home and you’re thinking about pursuing a claim. These are real issues but I don’t think they should keep you from pursuing a claim although they should be on your mind. I guess that’s at the end of the day, that’s what I’m trying to say. So there are ways around this stuff.
Now last episode we talked about how Medicaid gets two bites at the apple such that Medicaid gets injury-related payments recouped but then once an estate is established, the person has passed away, if the resident has passed away, they get a second bite of the apple, which is if the estate is over a certain amount, at least in Georgia, they can get the rest.
Medicare is not like that. Medicare gets what I say is one bite of the apple. They will only get paid from the settlement the amount actually paid related to that injury. They don’t get a second bite of the estate for any other amount. That’s what makes Medicare a little bit more special.
In my opinion, Medicare is much, much easier to deal with than Medicaid. I feel like Medicaid, because it is administered 50 different ways, it’s a different beast than Medicare. Medicare is a little bit more uniform. They have an online portal for attorneys to use that makes dealing with them not efficient, because what’s efficient about a giant bureaucracy, but it makes it a little bit easier.
So these are the things that could potentially affect a nursing home abuse settlement or even pursuing the claim, Medicare, Medicaid. If you have made it this far into the program, we really appreciate you listening. Again, if you have any suggestions for content, reach out to us. We would love to hear from you. If you are so inclined, please leave a review. Like and subscribe wherever you get your podcast from. New episodes every other week on Mondays. We hope to see you next time. And with that, we will see you next time.