Most plaintiff attorneys who represent elderly injury victims have a nightmare story in dealing with the Medicare Secondary Payer Act. The Act requires any Medicare beneficiary who is injured by a third-party, and then collects money from that third-party, to reimburse Medicare for the money it paid to treat the injured party. Understandable, right? But for most of the injury victims (and their attorneys) the error-prone and painfully slow service provided by the Medicare contractor can cause even the most calm and unexcitable person to pull their hair out.
Mother Jones is out with an article that thoroughly explains this frustrating process (Medicare’s Repo Man). The article explains how, in 2006, the various Medicare collection agencies were consolidated into one massive agency, then, under a law that permitted granting no-bid contracts to Native American corporations, awarded the collection contract to the Chickasaw Nation Industries. In the effort to step up collection efforts, however, the confusion and inefficiencies have just gotten worse.
Part of the problem is that for many years, Medicare had no systematic way of learning when someone got a settlement or judgment, making its collection efforts hit or miss. For a while, the agency tried to lean on plaintiff lawyers, threatening to sue them if they turned over settlement or insurance money to their clients before paying any Medicare liens. In many cases, though, courts sided with the lawyers who argued that Medicare was exceeding its authority. The issue was headed to the Supreme Court, but in 2003, Congress passed the Medicare drug benefit and included a small provision that officially put the onus on lawyers to make sure Medicare got its money.