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.