When a law firm settles or resolves a personal injury claim on behalf of a client, the client’s health insurer has a right to be reimbursed for its past expenditures on the related injury. Reimbursement requests become especially relevant when the client is insured by Medicare or Medicaid since Secondary Payer laws require reimbursement and failure to do so can result in payment of double damages.

Department Of Justice enforcement of Medicare Secondary Payer

Recently, the Department of Justice (DOJ) has ramped up enforcement of Medicare Secondary Payer (MSP) laws. In the last 18 months there have been three crucial settlements between the DOJ and law firms who failed to properly reimburse Medicare for payments made on behalf of clients. The first settlement occurred in June of 2018, where a firm settled for $28,000 and the second settlement occurred in March of 2019, where a firm settled for $250,000. In both of these cases, the firms were also required to put certain measures in place to ensure future compliance, such a designating and training a single firm employee to be responsible for MSP compliance.

Holding Attorneys Accountable

On November 4, 2019, the DOJ announced the most recent settlement of $91,406.98 with a law firm that failed to properly reimburse Medicare for payments made on behalf of six of the firm’s claimants. A unique feature of this settlement is that the settling law firm had referred or entered into co-counsel agreements in 4 of the 6 cases where Medicare was not reimbursed. The U.S. Attorney stated in the DOJ announcement that the DOJ intends to “hold attorneys accountable for failing to make good on their obligations to repay Medicare conditional payments, regardless of whether they were the ones primarily handling the litigation for the plaintiff.”

Lien Resolution Administrator

The latest settlement makes it clear that the DOJ will pursue cases of failure to pay and it will do so regardless of the firm’s ultimate role in the outcome of the litigation. Law firms should keep this in mind when entering into a co-counsel or referral agreement with another firm and take an active role in ensuring compliance. With increased prosecution of failure to abide by MSP laws, law firms should consider hiring a lien resolution administrator who can ensure the law firm’s compliance with applicable laws and create benefits for the client by obtaining the lowest reimbursement values.