Medicare is entitled to reimbursement for any payments that are related to an injury that is otherwise covered by insurance, including self-insurance, because it operates as a “secondary payer.”
This drives our clients crazy. What do I have medical insurance for if I have to pay them back? I get it. Believe me. But under the Social Security Act, Medicare will not pay for a beneficiary’s medical expenses when payment “has been made or can reasonably be expected to be made under a worker’s compensation plan, an automobile or liability insurance policy or plan, or under no-fault insurance.” So if you have a heart attack, no one is coming to look to you for payment. But if you settle your case or get a verdict, Medicare wants its slice of the pie.
If a Medicare beneficiary receives a personal injury settlement they will be required to reimburse Medicare for any payments made on their behalf. To enforce this requirement the law gives Medicare an automatic priority lien against any settlement proceeds in personal injury cases. Almost any party involved in the personal injury settlement or payment, including the attorneys, has responsibility for complying. Any settlement or payment must be reported to Medicare within 60 days and their valid lien amount must be paid.