Handling Medicare Liens in Death Cases

There is No Medicare Lien in Wrongful Death Cases medicare death liens

Medicare cannot assert a lien on a wrongful death claim in Maryland. Why? Medicare says they make a claim only in wrongful death cases where the 'wrongful death' statute provides payment for medical damages.

Maryland wrongful death claims are brought for the pain, suffering and loss of economic support that a wrongful death beneficiary suffers from the loss of their loved one. They are claims for the victims' loss and Medicare has no claim on those proceeds.

In states outside of Maryland, the rules can be different. The key is whether the wrongful death claim can recover medical bills. Medicare's ability to enforce its right of reimbursement against a wrongful death settlement or verdict is going to depend on whether the state's law allows for the recovery of medical expenses in wrongful death actions.

There Is a Lien on the Survival Action Claim

So there is a potential lien if the estate of a Medicare beneficiary receives money in a settlement or verdict for medical bills that were paid by Medicare. In Maryland, this claim is part of a survival action. Reasonable amount for attorney fees are subtracted from the amount of the lien. Medicare is stone serious about this. Under the "received payment" provision in the law, Medicare can compel anyone in the chain - doctors, lawyers, insurance companies - to pay back the lien. The law gives Medicare "super lien" so that it is first in line for reimbursement.

This is pretty heavy handed, right? It gets worse. Failing to reimburse Medicare for a lien can result in double damages on the lien amount plus interest.

Medicare makes life worse because it is bureaucracy to the zenith and it creates absurd rules. Usually, they will not tell you the lien amount until after a settlement or verdict.

How Wrongful Death Attorneys Need to Play These Liens

So in Maryland wrongful death cases where the beneficiaries of the survival action are the same as the wrongful death action, do smart plaintiffs' lawyers in Maryland just put all of the money recovered into the wrongful death action? No.

More on Wrongful Death

Technically, even if the result is the same for the parties, the personal representative of the estate is required to represent the estate by maximizing the value of the estate's claim. This puts the PR in an awful conflict if the PR is a wrongful death beneficiary because by fighting for the estate's claim, they are fighting against their own claim if there is a lien on the survival action. So if a personal representative agrees to arbitrarily settle the survival action without any recovery, the PR has arguably violated his fiduciary duty to the estate and skirted its obligation to Medicare.

What is the answer then? There are no clear cut answers. The best play is to get everyone on board by getting all parties of interest - including Medicare - to agree on how the proceeds are divided. I believe that there must be a rational basis for the division (or the stiffing of the estate claim) that can be justified. Clearly, a strong argument can be made in many Maryland wrongful death cases where there are limits on the recovery that the bulk of the claim is a wrongful death action as opposed to a survival action.

If that fails, you need to file a motion in Orphans Court (Maryland's probate court) asking the court to split up the proceeds. It is a hassle but unless the position you are taking is unassailable, it is the only choice.

Remember, this is all in the event of a settlement. If the case goes to trial, the jury splits the money how it likes. The question arises if the case settles before going to trial.

What Is the Key Case to Read If You Want to Settle the Your Claim

The seminal case on this issue is Bradley v. Sebelius, an 11th Circuit opinion in 2010. This case involved Medicare's appeal when a Florida probate court ruled that Medicare was only entitled to recover less than $800 out of a $22,000 lien in a wrongful death nursing home case. The probate court essentially divided the proceeds after the case was settled with the nursing home. Medicare, used to playing by its own rules, argued that it was not required to follow the probate court's ruling. Medicare's position was that the probate court did not rule on the merits of the case as to who gets what. The family paid back Medicare conditional payments anyway, probably because of the threats that come from the "super lien" provision we discussed above. The 11th Circuit ruled that Medicare's interpretation would put plaintiffs' lawyers in the quagmire of having to file suit -- and incur additional expenses -- to get a ruling on the merits. In some cases, this is the tale wagging the dog because any recovery would be reduced by the costs of getting the case to trial. This is a good decision for plaintiffs, obviously.

Getting a Lawyer (or Co-Counsel) to Navigate These Mazes

If you live in the Baltimore Washington area and you have a family member that you believe was killed by the negligence of another driver on the road, by medical malpractice, or as the result of the use of a defective product, get a free online consultation and assessment or call Ron Miller or Laura Zois at 800-553-8082.

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