January 14, 2010

U.S. v. Stricker: Enforcement of the Medicare Secondary Payer Act ?

by Adam L. Katz, Esq.

On December 1, 2009 the United States filed suit against parties and their attorneys alleging that Medicare was not reimbursed from a $300 million class action settlement.   In U.S. v. Stricker, et. al. the United States alleges violations of the Medicare Secondary Payer Statute (MSP).  The MSP authorizes Medicare to seek reimbursement for conditional payments made relating to a third party claim, such as a liability suit or workers’ compensation claim.  The U.S. alleges that the parties and their attorneys knew, should have known, or did not ascertain whether the parties receiving settlement payments were Medicare beneficiaries.  As a result, the suit alleges that the parties and their attorneys failed to comply with the MSP and are liable for reimbursing Medicare for conditional payments made by CMS.  The U.S. is also seeking double damages against several parties.
What lesson can be taken from this? U.S. v. Stricker indicates that Medicare will be more aggressive in pursuing reimbursement for conditional payments, from both the parties and their attorneys.  Although Stricker involves a class action liability suit the principles of the case also apply to workers’ compensation claims.  Therefore, going forward it will be important for parties and their attorneys in workers’ compensation claims to determine whether Medicare should be reimbursed for conditional payments prior to the disbursement of settlement funds.   While developments in the case will bear close attention, Stricker suggests that all parties and attorneys to a claim should be careful to comply with the MSP and take Medicare's interests into account.  

If you have questions or comments, please contact your David & Rosetti attorney at 404-446-4488 or by visiting our website at www.davidandrosetti.com.

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