Medicare

Medicare is federal health insurance run by the Centers for Medicare and Medicaid Services. According to Medicare.gov, Medicare covers people 65 or older who meet citizenship or residency requirements, and younger people may qualify if they have a disability, End-Stage Renal Disease, or ALS. Part A covers hospital care, Part B covers doctor visits and outpatient care, Part D covers prescription drugs, and Medicare Advantage (Part C) plans are private alternatives that bundle coverage. Medicare is different from Medicaid, which is a joint federal and state program based on income.

Medicare matters in lawsuits and settlements for two reasons. First, when Medicare has paid for treatment of an injury and the injured person later receives a settlement or verdict, federal law requires repayment. Under the Medicare Secondary Payer Act, 42 U.S.C. 1395y(b), a primary payer, and an entity that receives payment from one, must reimburse Medicare for covered medical costs that the responsible party should have paid. In personal injury and mass tort settlements, part of each person's award is often held back until Medicare's lien is resolved.

Second, Medicare billing is a frequent subject of fraud cases. Whistleblowers can sue providers that bill Medicare for services not provided or not needed, and collect a share of the government's recovery under the False Claims Act.

If you are on Medicare and expect a personal injury settlement, ask how the Medicare lien will be handled before you sign. See our guides on whether a settlement affects SSI or Medicaid and how settlement money is divided, and the Medicare fraud entry.