New Federal Decision Impacts All Pending Claims by Medicare Beneficiaries

May 31, 2011


Printable Alert

The already problematic process of settling claims brought by Medicare beneficiaries has become even more difficult in light of a recent decision by the United States District Court for the District of Arizona. In Haro v. Sebelius, decided on May 5, 2011, the court decided two critical issues against the Department of Health and Human Services. First, the court determined that the Centers for Medicare and Medicaid Services (CMS) cannot require prepayment of a Medicare reimbursement claim before the correct amount is administratively determined where the beneficiary either appeals that determination or seeks a waiver. Second, and perhaps most importantly, the court ruled that CMS cannot prevent counsel for the claimant from disbursing liability settlement proceeds to their clients until after Medicare’s claim is satisfied, and further determined that CMS cannot recover the reimbursement claim directly from the attorney if the attorney has disbursed the entirety of the settlement amount (minus his fees and expenses) to the client. Both aspects of this decision operate to shift more risk to liability insurers and self-insurers if Medicare’s interests are not properly protected.

The Prepayment Obligation

Pursuant to 42 U.S.C. § 1395y(b)(2)(B)(ii) and 42 C.F.R. § 411.24(h), CMS requires reimbursement to Medicare within... full text