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Medicare update: Suit shows new government scrutiny

By Staff Writer

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In a government lawsuit on behalf of the Centers for Medicare & Medicaid, claims resulting after individuals received payments from both CMS and insurers have been dismissed. The case, U.S. versus Stricker, stemmed from earlier litigation in Alabama in which some recipients of settlement funds also received Medicare payments for medical expenses associated with the litigated injuries or illnesses. The judge in the case found for dismissal because of the three-year statute of limitations on claims arising in tort and the six-year statute of limitations on claims arising out of contractual relationships.

Despite the outcome of this case, it demonstrates the mounting pressure on liability insurers to meet their obligations to CMS regarding health care-related settlements, according to Allsup, which coordinates group health, disability and workers compensation benefits for employers. Medicare requires payments be reported to the agency in cases in which the claimant receiving a settlement is Medicare-eligible.

“CMS’s magnifying glass has reached the liability industry,” says Rob Sokol, Allsup’s director of Medicare secondary payer compliance. “Liability insurers can expect Medicare to continue examining the federal agency’s involvement in settlements for Medicare-eligible beneficiaries. The concern for insurers is developing a strategy now to protect their settlements as these developments with Medicare continue to unfold.”

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