There are many instances when a state government, the federal government, or an insurance company will put a lien on your car accident settlement. One of this instances occurs when California car accident victims are over the age of 65 and have health insurance via Medicare or Medi-Cal. When these victims are in a car accident, Medicare and/or Medi-Cal will provide medical care and treatment, but demand they be paid back once a settlement is reached. Even if the injured victim is unaware of the lien, the law stipulates these costs must still be repaid once a settlement occurs.
How does a Medicare or Medi-Cal lien work after a car accident?
After a car accident, we always recommend seeking medical attention as soon as possible. This should be your first and foremost priority as your health is the most valuable asset that is harmed after an accident. Getting treatment immediately after an accident is a critical step to not only ensuring your health is taken care of and you are on the road to recovery, but this early treatment also allows you to maximize your injury claim. With ongoing medical treatment, medical bills will start to pile up. This is especially true if your injuries are severe and require extensive treatment and possibly even surgery.
Those who are insured under Medicare and Medi-Cal will be able to receive their medical treatment and care through their respective plans on a lien based plan. A lien system just means that the hospital and/or doctor will provide the service, Medicare/Medi-Cal will make payments to them, and then Medicare/Medi-Cal get reimbursed out of the personal injury settlement.
Because medical care is expensive and can result in large bills, many people fail to seek treatment after their injuries due to the cost of treatment. However, avoiding treatment will only create more issues after an accident. Avoiding the proper care and treatment can result in the injuries worsening and claims being denied by the insurance company for waiting too long. By operating on a lien, injured victims are allowed to get the medical care they need, when it is needed, and then worry about paying those bills back after the settlement comes in.
Medicare and Your Personal Injury Settlement
Once you have been treated and have reached maximum recovery, your personal injury attorney will be able to assess the extent of your medical bills, lost wages, and other injury related damages. Once the extent of your damages is determined, your lawyer will then make a demand to the insurance company. Provided that the insurance company accepts the demand, or if the insurance adjuster and your car accident attorney can reach an agreement as to the value of your claim, your case will settle without needing to file a personal injury lawsuit.
As California personal injury attorneys know, the settlement or judgment will need to be reported within 60 days so that Medicare/Medi-Cal can request their reimbursement. A delay beyond 60 days could result in fines up to $1000.00 per day. Thus it is imperative your lawyer is experienced in the realm of personal injury to avoid these fines reducing the amount of money you get.
Once a report is made, Medicare will let your lawyer know what their lien amount is for the bills on your personal injury claim. Notice is typically received within 120 days after the report is made. It is important for your car accident attorney to review the charges as Medicare is only allowed to be reimbursed for charges related to the personal injury accident. By verifying the charges your personal injury attorney will ensure you do not overpay and are receiving the maximum amount possible.
Due to the low California car insurance limits currently in place, a situation can arise where the medical bills far exceed the settlement amount. For example, if the medical bills total $100,000, but the at-fault driver’s insurance has a limit of $25,000 on their policy, there will be a deficit of $75,000 that is still owed to Medicare.
However, if you are represented by a personal injury attorney, they will know how to, and be able to, significantly reduce this amount. An experienced attorney knows the law allows for Medicare to reduce its lien to a maximum of one-third of your settlement.
In the example above, this would mean they are limited to $8,333.33 and not the $75,000 left over. In some cases where the insurance policy limits are low and the injury was severe, Medicare will even waive their lien to allow the injured victim to receive more of the settlement. While a personal injury attorney will be able to help, they will not know the amount Medicare claims until after a settlement is made as the lien amount depends upon the settlement amount.
Remember, it’s extremely important that you or your car accident lawyer notify Medicare or Medi-Cal of any potential claim. If they don’t, there could be serious penalties to pay.
If you have Medicare or Medi-Cal and were injured by the negligence of another, we may be able to help. Our office offers free, friendly, and honest advice to help you with figuring out your options.
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