Medicare does not have a lien of any kind or nature let alone a “super lien.” Medicare has a statutory subrogation interest in the personal injury claims of Medicare beneficiaries for whom Medicare has paid accident related medical expenses. A lien is a property interest and an attorney possessing the property of another has certain ethical obligations and fiduciary duties regarding the handling of that property. Thus an attorney in possession of settlement funds in which a third party has a lien has a responsibility to see that the lien is not violated. The notion that Medicare has a lien upon personal injury claims was first fabricated by unscrupulous Medicare contractors who were collecting Medicare funds on a commission basis. These collection agents referred to the Medicare subrogation interest as a “lien” in an attempt to improve their negotiating position. This abuse came to a head in the case of Zinman v. Shalala when the Federal Court held that Medicare did not have a lien and ordered Medicare and its contractors to stop using the word lien to describe their subrogation interest.
A subrogation interest is an interest that attaches to a beneficiary’s right to make a claim. A subrogation interest reaches the claim and the beneficiary but does not reach the beneficiary’s attorney leaving the attorney free to act in the best interest of the beneficiary. Medicare’s subrogation interest is a creature of statute. While Medicare clearly does not have a “super lien” it might fairly be said that Medicare has a “super subrogation interest.”
The Medicare recovery statute at 42 CFR §411 creates a number of rights, duties, and obligations for not only the Medicare beneficiary but also for insurance companies, health care providers, and attorneys. Anyone dealing with a beneficiary who has received Medicare benefits in connection with an accident would be well advised to study the Medicare recovery statute carefully as Medicare’s right of recovery is neither a lien or a subrogation interest but actually a complicated hybrid of the two interests.
For more information contact a Tyler Accident Attorney today.