Government Subrogation On Insurance Money From Settlement

A large part of the population in Dallas, Fort Worth, Arlington, Grand Prairie, Weatherford, and most all other cities in Texas receive some form of government benefits. So what happens when someone receiving Medicare benefits gets a settlement in an injury case from an insurance company?
The answer to the above question is, “it depends.”
It should be obvious that if the benefits received by someone on Medicare are unrelated to the claim being made, then there is nothing to worry about. However, if the person receives a settlement based on injuries and medical bills that were paid for by Medicare, then Medicare is entitled to be paid back for any monies they paid for the benefit of the person receiving the benefits.
The most typical scenario is: A person who receives Medicare benefits is involved in an auto accident where someone other than the person receiving the Medicare benefits is at fault. The Medicare recepient goes to the emergency room and receives care until they have recovered from the injuries that were incurrred. The bills incurred by the Medicare recepient are all paid for by Medicare.
When the above happens, Medicare has a lien for any monies paid to settle the claim against the insurance company that the Medicare recepient is entitled to.
Medicare liens are sometimes referred to as “super liens” and for good reason. A Medicare lien is superior to other types of liens and does not even require written or actual notice to the parties involved. They are just suppose to be paid back, period. Medicare can recover from either party or either party’s attorney. There are several Federal laws saying so.
Texas Courts have sometimes upheld Medicare’s “super lien,” even in the case of uninsured motorist benefits. This was shown in the case, Lewis v. Allstate, where Allstate was held not to have breached its contract with its insured by including Medicare as a co-payee on the settlement check for uninsured motorist benefits when both parties knew Medicare had issued payments for the insured’s medical treatment. This was a 2006 case. In the Lewis case, the insured person conceded that Medicare would have had the right to seek reimbursement from an insurance company that knew or should have known about payments made by Medicare but failed to protect Medicare’s rights. In this case, the insured attempted to rely on a 2000 case decided by the Beaumont Court of Appeals, styled Texas Farmers Insurance Company v. Fruge, in which the Court held “that it is a breach of contract for an insurer to include Medicare on a benefit check where the insurer had no reason to suspect that Medicare had any entitlement to a portion of the benefits paid.” The Court refused to hold that Texas Farmers Insurance Company had a duty to determine the amount paid by Medicare, and distinguished Fruge, wherein the insurer knew Medicare had made a very small payment, yet it included Medicare as a co-payee on checks totaling nearly ten times that amount.
When dealing with Medicare it is not just important, it is vital that an experienced Insurance Law Attorney be involved in the settlement to keep the Medicare recepient out of legal trouble.