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MSPRC Announces Fixed Percentage Option for Resolving Conditional Payments in Low Dollar Settlements

By Jason D. Lazarus, J.D., LL.M., MSCC, CSSC

In a new announcement posted on the MSPRC’s website, there are details about the fixed percentage option for resolving conditional payments where the settlement amount is $5,000 or less.  In those cases, the injury victim can resolve Medicare’s recovery claim by paying Medicare 25% of the total liability settlement.  There are certain requirements that must be met in order to utilize this option which are detailed in the announcement below.  Importantly, when exercising this option the injury victim gives up the right to appeal the fixed payment amount or request a waiver of the recovery.

This option will be available starting on 11/7/11.  The MSPRC’s website will have a full explanation with instructions on how/when to elect the option starting on 11/7.  In the right case, this option may make a lot of sense and speed up the recovery process.  With the SMART act moving through both the House and the Senate, MSP reform appears to be gathering steam.  That coupled with changes being made by the MSPRC may actually make the process a little more palatable.  For now, we have to take a wait and see attitude.

The alert issued by the MSPRC is as follows:

New Fixed Percentage Option For Medicare’s Recovery Claim

The Centers for Medicare & Medicaid Services will be implementing a new and simple fixed percentage option that will be available to certain beneficiaries beginning November 7, 2011. This option is available to beneficiaries who receive certain types of liability insurance (including self-insurance) settlements of $5000 or less.

A beneficiary who elects this option will be able to resolve Medicare’s recovery claim by paying Medicare 25% of his/her total liability insurance settlement instead of using the traditional recovery process. This means that a beneficiary will know what he/she owes and will be able to immediately pay Medicare.

In order to elect this option, the following criteria must be met:

  1. The liability insurance (including self-insurance) settlement is for a physical trauma based injury. (This means that it does not relate to ingestion, exposure, or medical implant), and
  2. The total liability settlement, judgment, award, or other payment is $5000 or less, and
  3. The beneficiary elects the option within the required timeframe and Medicare has not issued a demand letter or other request for reimbursement related to the incident, and
  4. The beneficiary has not received and does not expect to receive any other settlements, judgments, awards, or other payments related to the incident.

A full explanation, including instructions on how and when to elect this option, will be available on this website on November 7, 2011 in the Fixed Percentage Option section of both the Attorney and Beneficiary Toolkits.

Please Note: When a beneficiary elects this option, he/she must understand that as part of choosing the option he/she will be giving up the right to appeal the fixed payment amount or request a waiver of recovery for the fixed payment amount.

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