August 9th, 2011

Greedy Hospitals refusing to bill Medicare?

We’ve all seen situations where instead of billing Medicare a hospital files a lien against the injured (elderly) person’s third party settlement. The perception is that hospitals routinely do this to avoid accepting payment at reduced rates. If this happens to your client, the first thing you should do is verify that the hospital has properly followed state and/or local procedures for filing its lien. In some jurisdictions, it is even necessary that the lien is filed with the county clerk.

So, must the provider bill Medicare? The answer is plainly no. In fact, providers are required to pursue/bill no-fault and liability insurance for the first 120 days after the date of service (42 U.S.C. Section 1395y(b)(2)(A)). After that, a provider “may” bill Medicare. This leads to another question: why, if not out of hope for higher payment, would a hospital choose to wait perhaps years for a third party settlement which may yield nothing? The answer is surprising and personal injury attorneys may find the solution to the problem even more surprising.

Providers often choose to put a lien on the case because they do not have the information needed to get payment from Medicare. Often, this information is as little as proof that any first party auto med-pay is exhausted along with third party contact and claim information, including actual claim number. In order for Medicare to make conditional payments, it needs certain information. If you are faced with a number of liens, including from providers who have not billed Medicare, take the time to find the right person at the hospital and offer them whatever information they need in order to bill Medicare and release the lien. You might ask “why wouldn’t a provider bill Medicare and then put a lien on the file for the balance?” This is not allowed, for once a provider bills Medicare they cannot bill anyone else. For this reason, providers must be certain they have everything Medicare requires before billing them. And if they don’t have enough information when they do bill Medicare, they won’t get paid by Medicare.

This is not to say that some providers are not putting liens on third party settlements out of greed. However, most providers would prefer to get payment from Medicare, but they do need the right information. Fortunately, the plaintiffs’ attorney are often the gatekeepers of such information.

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