The penalties, in addition to the amounts owed as claimed by CMS, can include double the recovery amounts sought, plus fines of $1,000 per day for each non-compliance of each individual. The burden is on the entity for determining whether the beneficiary is eligible for or receiving Medicare benefits. Furthermore, the entity must obtain approval from CMS in order to be released from any liability for reimbursement to CMS for payment of benefits to the beneficiary.

The Problem
The situation presents potential liability problems for workers' compensation insurance carriers, liability insurance carriers, employers, attorneys, and health-care providers. The problems arise when an entity attempts to settle the claim for future liability with the beneficiary and, as part of that settlement, the parties resolve the issue of future medical care and treatment. An entity must obtain consent from CMS as to the amount of medical benefits to be paid on behalf of the beneficiary's injury. If a settlement appears to represent an attempt to shift to CMS the responsibility for payment of medical expenses for the treatment of an unrelated condition, the settlement will not be recognized. More importantly, there is no established procedure upon which an entity may receive approval from CMS and relinquish its liability for future reimbursement to CMS for additional medical care and treatment received by the beneficiary.

For example, if the parties resolve a case for $250,000 and stipulate that $50,000 is for future medical care and treatment, settlement is done at the peril of the parties. While CMS is required to be put on notice of the potential settlement, it is under no time limit to respond or give approval for the value of the agreed future medical amount. Should the parties resolve the case, and CMS four years later asserts that the actual value of medical care was $100,000, then under current law and within 60 days, CMS must be reimbursed the additional $50,000 from any entity involved in the settlement. That includes the employer, the insurer, the workers' compensation insurer, the beneficiary or injured worker, or any entity (such as attorneys or health-care workers) who received payment from a responsible entity for services provided.

This open-ended time-line for review and payment is an unfair practice with significant repercussions and must be properly addressed. At the very least, a statute of limitations is needed to ensure that recovery actions are not pursued years after claims have been settled. CMS' ability to pursue reimbursement from any entity involved in the settlement has the potential to create an unfair yet legal revenue source for the government. When CMS has the ability to value the medical care and pursue its reimbursement from all parties without any system of checks and balances in place, it creates a game wherein CMS is the referee, timekeeper, and quarterback for the opposing team. While CMS may claim the right to collect reimbursement owed, there should be a procedure in place that ensures such actions are done in fairness, with due process, and within an appropriate timeframe. A mechanism is needed to stop these cases from going on ad infinitum, for the sake of the insurer, employer, plaintiff, and all entities that receive payment.

The Fix
A timeline of due process must be set to bring these cases to finality. Congressional action must be taken and must include a statute of limitations on any decision made by CMS. If CMS fails to make a decision within its window of opportunity, then it should relinquish its ability to calculate and demand payment after the fact. Employers, insurers, and plaintiffs should not bear the brunt of government bureaucracy by waiting for a decision that may or may not come; parties should be protected if a final decision from CMS is not provided before settlement.

The $1,000 per claim per day non-compliance fine is an attractive solution for a government desperate for funding options. CMS' ability to calculate, demand repayment, and penalize parties all on its own timeframe allows for a potentially limitless revenue stream to fund future health reforms. Medicare beneficiaries and all others involved should not have to shoulder that responsibility, nor should they be victims of CMS' refusal to institute a mechanism of accountability to complete these cases in a timely and just manner.

This issue is a sleeping giant that has staggering ramifications for lawyers, Medicare beneficiaries, insurers, businesses, and any and all involved in the process. Businesses, insurance companies, health-care providers, and lawyers must get involved to encourage Congress to pass a streamlined procedure for resolution of litigated settlements. If left uncorrected, this issue will result in adverse impact on the U.S. economy. All parties must work together in order to ensure that Congress takes action to correct this problem quickly and decisively. Medicare beneficiaries and all concerned have the right to an expedient and efficient period of due process without the worry of costly government intrusion years after settlement.

Dennis A. Ross, Esquire, is an attorney with Ross Vecchio, P.A. in Lakeland, Fla. He may be reached at 863-701-2100.

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