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Paying Medicare liens after settlement of wrongful death claim

If you have recently reached a settlement of a wrongful death claim, you may be wondering if the decedent’s Medicare lien is required to be paid from the proceeds. That depends on whether you were seeking survival damages and on the damages that can be recovered under the wrongful death statute in your state.

If you filed a claim for survival damages, or the wrongful death lawsuit or statute permits you to recover medical expenses, then the Medicare lien is required to be paid from the settlement proceeds. But if your claim was filed only for the decedent’s wrongful death, and not for the right to seek reimbursement of medical expenses, then the Medicare lien does not have to be paid from the proceeds of the wrongful death settlement.

The Department of Health and Human Services manages the Medicare program, which was established to pay the medical expenses of certain people. If a Medicare recipient was injured by a third party, then any payment by Medicare to cover the recipient’s medical bills is considered provisional, and Medicare must be repaid if the third party’s liability insurer subsequently pays for those expenses.

In Hall v. United Security, 2012 IL App (1st) 112158-11, the defendants made a motion to include Medicare as a payee on the check in settlement of a wrongful death action. The lawsuit did not consist of a claim covered by the Illinois Survival Act, and the trial court sided with the plaintiff. Upon filing an appeal, the defendants contended that exclusion of Medicare from the settlement check left them susceptible to a lawsuit from the federal government for funds expended by Medicare for the decedent’s medical expenses. But the Appellate Court declined to accept the defendants’ contention.

At first, the court recognized the difference between a claim filed under the Survival Act, and one filed under the Wrongful Death Act. The court determined that the Illinois Wrongful Death Act permits damages to be recovered only when they were sustained by the closest family members while the Illinois Survival Act allows damages to be recovered only when they were suffered by the decedent until the time of death.

The court said that the plaintiff’s complaint consisted only of claims for wrongful death, and that the damages that could be recovered were only those based on financial loss to the decedent’s survivors. Because the claims of this action were not ones for financial loss, damages and pain and suffering of the decedent, there were no claims to which the Medicare lien applied. Therefore, when a plaintiff’s complaint seeks damages only for the decedent’s wrongful death, Medicare does not have to be reimbursed for payment of the decedent’s medical expenses.

Paul Greenberg is a Chicago wrongful death lawyer with Briskman Briskman & Greenberg. To learn more call 1.877.595.4878 or visit http://www.briskmanandbriskman.com/.

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