Lawyers are now potentially liable for unpaid Medicare liens on a client's legal award or settlement following two federal court rulings. In cases of first impression, the U.S. District Court for the Eastern District of Virginia and the U.S. Court of Appeals for the Eleventh Circuit held the Medicare Secondary Payer Act permits Medicare Advantage Organizations to prosecute private causes of actions against attorneys, and no exemption exists for attorneys who receive payments from a primary plan.
Medicare Sues Law Firm for Reimbursement of Conditional Payments
In Humana Insurance Company v. Paris Blank LLP, et al., Humana made conditional payments totaling $191,612.09 to cover the medical expenses of its insured, a Medicare beneficiary, following a motor vehicle accident. The beneficiary retained the defendant law firm to prosecute her claims, which settled for $475,000. Several insurance companies issued settlement checks, which were made payable to the defendant firm or to the firm and Humana jointly. The firm deposited the settlement checks without Humana's endorsement and disbursed a portion to the Medicare beneficiary.