Medicare Secondary Payer Statute

NJ appellate Division recently addressed Medicare Liens for personal injury matters in Jackson v. Time Warner, et als. Following a negotiated settlement plaintiff’s counsel filed a motion witht he law divsion court seeking a court ordered allocation of the settlement proceeds in an attempt to avoid payment of the Medicare lien. The trial court refused to allocate proceeds. Plaintiff argued that the collateral source rule (NJSA 2A:15-97) barred recovery by Medicare beneficiaries of medical expenses. The appellate court did not agree with that argument. Plaintiff also argued that New Jersey’s tort recovery rules are not preempted by the Medicare Secondary Payer Statute. The court stated that state collateral source statutes and other similar statutory schemes that interfere with Medicare’s right to reimbursement are preempted.

In other words, before settling any case where there have been conditional medical payments made to medical providers by Medicare as well as the likelyhood that there will be future medicare payments within 36 months from the settlement of the case, the plaintiff’s attorney must address this issue for his client or be personally liabile for the payments.