Discussion:Medicare/Medicaid Lien Withholding?
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Discussion Forum Index --> Tax Questions --> Medicare/Medicaid Lien Withholding?
| 1 November 2009 | |
| A tweak to my lawsuit settlement issue in prior thread. My client is the one paying and wants to know
1) what DUTY he has to research a "medicare/medicaid lien" (whatever that means**) and withhold it from the settlement check. This seems pretty flaky and certainly is not a tax question as far as I'm concerned, but I told him I'd try.
2) And where would one RELIABLY research the existence/amount of such a lien? Are such things filed at the county court house (I'm in Texas if it matters) 3) and IF there was a 1099MISC reporting requirement, would the 1099 show the gross or the net? (presumably the gross, but intuitively this whole issue seems very flaky) | |
| 1 November 2009 | |
| This is one of the reasons that it's open season on older people if they've been hurt, or had medical malpractice committed against them.
You can win the suit, and be wiped out by a lien. I was able to get a doctor's letter distinguishing my client's slip and fall direct injury from a further much worse complication of that injury that saved my client a bundle one time. It took me almost as long to argue with the Medicare people as it did to win the case. As I remember, as this was some time ago, I spoke with an agency called HCFA (Health Care Financing Administration). Maybe you can call HCFA and get some general information about such liens without giving your clients name. I need to mention one other point, my client was on Medicare (age). And if I remember, the defendant in the lawsuit refused to pay the settlement funds until I had this worked out. | |
| 1 November 2009 | |
| I believe that the attorney handling the case will contact Medicare to ascertain the amount of the lien. There is generally no 1099 reporting requirement on a PI settlement. | |
| 1 November 2009 | |
| Sorry, I didn't really address your question.
This is really a legal question. You should contact your client's attorney to discuss this issue. However, I believe that the insurance company or defendant has a reporting obligation to CMS with respect to PI settlements for Medicare/Medicaid beneficiaries. Plaintiff's attorneys can also have personal liability for failure to withhold. Plaintiff's attorneys have been known to negotiate the amount of the lien. | |
| 2 November 2009 | |
| I see now that your client is the one paying the settlement. As I noted above, in the case I handled (as a lawyer, which I am), the defendant's attorney refused to pay settlement proceeds until I had this worked out for my client (with HCFA I believe). I was able to successfully negotiate the issue, as Riley mentions.
Your client needs the assistance of his attorney before paying ANY settlement, whether it involves the issue of Medicare/Medicaid liens or not. (The person receiving the settlement needs an attorney too of course, if he knows what's good for him.) | |
| 2 November 2009 | |
| clarification: my client is the attorney for the person paying the settlement | |
| 2 November 2009 | |
| Fletch, correction -- if your client is making a payment to a law firm, there would be a 1099 requirement for the payment to the law firm, but not for the payment to the plaintiff.
I believe that your client can contact either CMS or the plaintiff's counsel to obtain the lien amount. | |
| 2 November 2009 | |
| CMS stands for Centers for Medicare and Medicaid Services. Formerly known as the Health Care Financing Administration (HCFA), CMS is responsible for recovering payments made on behalf of Medicare/Medicaid beneficiaries. | |
| 2 November 2009 | |
| R2,
Fletch, correction -- if your client is making a payment to a law firm, there would be a 1099 requirement for the payment to the law firm, but not for the payment to the plaintiff.
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| 2 November 2009 | |
| Each county is different when it comes to medicare/medicaid.. If medicare/medicaid paid the bills and now there is money coming in, they may wish to be reimbursed.
I'd discuss this with an elder law atty. | |
| 2 November 2009 | |
| Fletch, a 1099-Misc should not be sent to the plaintiff if the cause of action is PI. | |
| 3 November 2009 | |
| Bird, I don't think that the Medicare lien statute is optional. | |
