Medicaid and Medicare -- the Dangers for Claimant Attorneys

Although it might not garner much sympathy, a lawyer's life is full of worry. The lawyer first has to worry that she is bettering her opponent, using the facts she is given in a way most likely to get the best deal or result for her client. Beating an opponent is only the first piece of a lawyer's anxiety puzzle, however. Between federal and state laws, regulations, case law and court rules, a lawyer is constantly worried that she is forgetting something vitally important. One slip-up could lead to that legal word feared most by every practicing attorney: Malpractice.

In our legal system, there are malpractice minefields strewn about every practice area. For claimant attorneys in the workers' compensation arena, the "opportunity" to commit malpractice often comes in dealing with benefits in the Medicare and Medicaid systems. The dangers are two-fold: First, the attorneys need to be concerned about the possibility that their clients will lose very necessary benefits if they mishandle their cases. This could lead to personal liability if the clients learn that their hired counsel has not protected them properly. Second, to save their own hides, claimant attorneys need to be concerned that they will be liable to the Medicaid and Medicare systems personally should claims made by either system be disregarded or mishandled.

Similar concerns are -- or should be-- shared by claims professionals. From a purely professional standpoint, identifying and understanding the opposing sides' concerns adds to an adjuster's arsenal when negotiating with these attorneys. Additionally, a comprehensive understanding of these powerful programs will help the claims professional when the worker is not represented by counsel. The claims specialist must be aware of Medicare and Medicaid issues on the claimant's behalf, and also must protect the employer from liability from these two benefit systems.

The key to correctly working within the Medicare and Medicaid systems is first to understand their differences.

Medicare is a federal health insurance system only; there is no companion state-specific program. A claimant may become entitled to participate in Medicare when he is declared disabled or reaches retirement age. There are no financial criteria to participate; multi-millionaires and paupers alike receive benefits from the program.

Medicaid, in contrast, is a federal and state system that provides health benefits to those who meet specific financial criteria. If assets and/or income get too high and exceed the mandated thresholds, all of the benefits received under the program are lost. A claimant may receive benefits under both programs at the same time, and oftentimes a claimant will receive Medicaid benefits while awaiting Medicare eligibility.

The receipt of compensation benefits can disqualify a claimant from receiving Medicaid benefits, as can receipt of a lump sum or a funded Medicare Set-Aside Trust. An annuity that is not irrevocable, non-assignable, and does not make equal payments of income and principal over a claimant's life expectancy can similarly cause disqualification. In both systems the law states that the government is the secondary payer, meaning that if another source of payment is available, the programs should be reimbursed for inadvertently paying bills in the first place.

Ignoring or mishandling either Medicare or Medicaid claims for benefits paid before or after a settlement can lead to liability for the claimant and for the deeper pockets found behind the claimant -- those of the attorney or the relevant insurance company.

Jana McConnaughhay is an elder law attorney with the McConnaughhay Law Group, P.A., in Tallahassee. She may be contacted at 850-385-1246. McConnaughhay will speak on this topic during the 64th Annual Workers' Compensation Educational Conference and 21st Annual Safety and Health Conference August 16-19 at the Orlando World Center Marriott.