All too often, I have to tell a client, "yes, your case has settled, but don't expect the money for several months." Why? Because of Medicare.
Medicare has a subrogation interest, meaning that clients have to use settlement funds to reimburse Medicare for the payments (or a portion of the payments) that Medicare made for the clients' medical care. That's not that unusual; most insurance companies have similar provisions. But Medicare is especially difficult to deal with. They are underfunded and understaffed, and it can literally take months (and sometimes even years) to get them to tell us how much the client owes. Then we have to spend more time going over the claim to make sure the amount Medicare requests only includes care related to the wreck or accident, and then we have to spend more time negotiating a final payment amount. And while you would think that Medicare and the federal government would want to rush to take our payments, that's not the case.
So if you are a potential client and have Medicare, please understand that we'll work hard to get your case resolved (whether through settlement or trial), but that won't be the end of the waiting game.
And for the record, this entire post has been done while I was on hold with Medicare.
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Brooks: Excellent post. The lawyers in the upper Midwest can't get anything settled quickly anymore. It takes a month of Sundays just to complete the paperwork and settlement process. Very frustrating. I'm beginning to think we should have learned to play the guitar while in high school.
You should wait at least one year to assess a patients treatment needs. Have you considered notifying Medicare at the onset of your case instead of waiting until a settlement has been reached? Besides, if you're doing your job, you should know what is due Medicare when you constructed your medical specials.Many attorneys like to keep subrogation parties out of the mix until after a settlement has been reached, because it gives them more bargaining power in negotiating subrogation settlements. However, Medicare recovery rights are statutory and pay a pro rata share of fees and costs. Maybe instead of blaming Medicare, just explain to your clients that this wait usually produces a higher recovery. That is - if the benefits are being passed on to your clients.
AJ: As I read your comment I had to wonder how attorneys can "keep subrogation parties out of the mix until after a settlement has been reached". That's foolish to say the least and probably malpractice to know there are subrogation interests and not be talking with them as the case develops. Waiting till the end can cause the client's settlement amount to be reduced or eliminated. Where did you learn this: "it gives them more bargaining power in negotiating subrogation settlements." In fact it results in the opposite occurring. Part of your last statement I don't think is true. "... just explain to your clients that this wait usually produces a higher recovery." How do you mean it results in a higher recovery for a client?And this part of your comment seems to imply something that is criminal. Are you implying criminal conduct to the lawyer that wrote this? "That is - if the benefits are being passed on to your clients."Are you a lawyer? Perhaps you could explain yourself and use your full legal name; unless of course you're just playing lawyer and trying to stir up trouble. Are you afraid to use your legal name? Criminal problems? Are you a felon? Is that the problem?
AJ-You make a decent point about contacting Medicare early. I agree that too many attorneys wait too long to contact Medicare, if they address Medicare or other subrogation interests at all. Although we're not always able to do it, our goal is to get a Medicare consent form at the first meeting or two and start the process as early as possible.My frustrations with Medicare are three-fold. First, it takes far too long for Medicare to determine what is owed them. Case in point, I currently have multiple cases where the damages will justify a tender of the other driver's policy limits and my clients' uninsured motorist policies. These cases could settle today (and I could disburse money to clients that could really use the money), but we will be waiting a significant time to resolve them because Medicare can't figure out what they are owed. In one of these cases, the Medicare subrogation department is telling me that there is less than a $100 subrogation interest when I know that Medicare has paid at least five figures. Who knows how long it's going to take them to figure this out?Second, Medicare takes too long to negotiate. As you probably know, there are too many cases where there is not enough coverage to compensate the client. In those cases, you have to negotiate with Medicare to make the settlements work. And that process takes months. We're trying to give them money, and yet, it's a painful process.Third, I'm also sure you know about the new Medicare set-aside rules. There is one person in Texas that can approve a set-aside. We're one of the largest states in the country, and we are all dealing with one attorney. The set-aside process just started in Texas. You can imagine the difficulties having one person is going to create when more and more cases get in the queue.I am also confused about a couple of your statements. You say that a wait will generally increase recovery. I agree that settling a case too early is a big danger; you don't want to settle before you know the full extent of the client's injuries. But I think delay generally hurts the value of claims. I prefer to pursue them as aggressively as makes sense.And finally, I am concerned by your last sentence. I'm not sure what you're trying to insinuate. But given that I speak and teach on legal malpractice and ethics issues, and that my partner is on the State Bar of Texas professionalism committee, and that my firm has won numerous awards for our pro bono work, I'm pretty comfortable with the way we practice law.
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