Do Accident Victims Need To Reimburse Medicare In Full?

Posted on Jan 11, 2012

Medicare benefits are obtained by many clients for daily medical needs. However, Federal law provides Medicare expansive rights with regard to claimants who are or will become eligible for Medicare benefits. In cases of automobile accident, medical bills could rise up and if Medicare paid those charges in full, does Medicare have the right to seek reimbursement from claimants?

Medicare reimbursement example case
In 2004, Mr. Hadden was injured in Kentucky when a vehicle owned by Pennyrile Rural Electric Cooperative Corporation struck him. Medicare paid his medical bill which totaled around $82,036.17. Hadden later sued Pennyrile and agreed to settle the suit for $125,000. Medicare demanded Hadden to reimburse them in full for what they had paid for his medical treatment related to the accident. Hadden argued that Medicare should only be entitled to 10% of his $125,000 damage award. He reasoned that Pennyrile was responsible for only 10% of his damages; therefore Medicare should only be entitled to 10% of their claim. 

Related Video: Do Kentucky Accident Victims Need To Reimburse Medicare?

The U.S. Court of Appeals for the Sixth Circuit heard the case and found in favor of Medicare. The Court stated that Medicare is entitled to receive the full amount that it demanded. The ruling of the Sixth Circuit indicates that if a Medicare beneficiary who has been injured in an accident makes a claim against a liability insurer or the person that caused the accident and later receives a payment in return for a release as to that claim, then the insurer is deemed responsible for payment of the full value of Medicare’s conditional payment interest. The ruling of the Sixth Circuit is in direct opposition to a ruling of the Eleventh Circuit in Bradley v. Sebelius. The Eleventh Circuit held that Medicare was not entitled to a full recovery of the conditional payment amount in a wrongful death action. The court reasoned that Medicare should only recover their proportional share.

As a Kentucky Personal Injury Attorney, I believe it is extremely unfair for Medicare to receive more from settlements than the injured accident victim. Since there is a conflict in the decisions between the United States Courts of Appeals regarding Medicare reimbursement when settlement is reached, there is a likely hood that the United States Supreme Court will grant certiorari and review this important issue. Their decision will make the difference in the quality of life many Kentucky accident victims lead after a settlement. I hope the Supreme Court sides with the Eleventh Circuit and only entitles Medicare to a percentage share of what they have paid out so as to allow Kentucky accident victims to keep a larger share of their recovery. We will have to wait and see.

Michael Schafer
The Personal Injury Attorney for Louisville and Kentucky