Proposed Bill May Help Alleviate Medicare Headache

One of the many headaches associated with Medicare may soon be coming to an end. This past March, a bill was proposed in the House of Representatives that would make the process of reimbursing Medicare for health care expenses paid by a secondary source more efficient. This means that victims of personal injury would no longer have to wait for Medicare to send its reimbursement claim before they can be compensated after a judgment or settlement.

Currently, if a person is injured in an accident and Medicare pays for his or her medical expenses, the individual will be responsible for reimbursing Medicare these expenses if he or she receives another source of compensation for the injuries. This could be a settlement or judgment from a lawsuit or proceeds received from an insurance policy, for example.

The problem with the current system is that it can take months, and in some cases even years, for Medicare to send its request for reimbursement. This holds up the entire process because Medicare must be paid first before the remainder of the settlement award can be released to the injury victim.

Medicare Secondary Payer Enhancement Act

Two congressmen from Pennsylvania hope to fix the problem with the Medicare Secondary Payer Enhancement Act (HR 4796). If passed, the Act would require Medicare to respond to requests for recovery information within 60 days. If Medicare fails to respond within this time frame, the program would lose its right to reimbursement of medical expenses.

The Act also would set a three-year statute of limitations, preventing Medicare from going back and recalculating the amount owed after it already had been reimbursed for medical expenses from a single Medicare recipient.

Other provisions in the law include:

  • Allowing payment demands to be made up to 120 days before a settlement has occurred
  • Giving Medicare recipients the option of making a “voluntary reimbursement,” i.e. calculating the amount they owe Medicare and paying this amount instead of waiting for Medicare to provide the information to them
  • Setting a $5,000 threshold for Medicare reimbursement
  • Removing recipients’ Social Security numbers and health insurance claim numbers from Medicare reporting
  • Creating an appeals process

While the Act has broad support in Congress from both political parties, the bill is not without flaws. Some critics point out that allowing Medicare recipients the option of calculating the amount they owe to Medicare and then paying that amount within 90 days of a reasonably expected settlement may cause more problems than it will solve.

For example, what happens if the settlement falls through? Additionally, Medicare has the right to contest the amount paid. If this happens, then the Medicare recipient has the option of paying the difference between the two amounts or appealing Medicare’s decision to an administrative law judge. These appeals could delay the process just as much, if not more than the current system does.

Critics also point to some provisions of the bill that appear to lack effect. For example, while the $5,000 threshold is good in theory, setting the amount at $5,000 will not have much impact in practice. It is unlikely that there will be very many settlements, judgments or awards for $5,000 or less.

Likewise, the provision calling for the removal of Social Security numbers and health insurance card numbers may have the unintended consequence of slowing the reimbursement process. While it is important to protect sensitive information, removing it from Medicare claims for reimbursement may make it difficult to distinguish between Medicare recipients who have, for example, the same name.


Regardless of the faults of the proposed legislation, the Medicare Secondary Payer Enhancement Act could make life much easier for Medicare recipients.

The current system does not work. It hurts those who were injured in accidents and are forced to wait for compensation that has already been awarded in a legal judgment or settlement.

For more information on your rights to recovery following an accident, contact an experienced personal injury attorney. A lawyer can discuss your options with you and explain how Medicare reimbursement may impact your claim.