CMS Announces New Fixed Percentage Option Regarding Medicare’s Recovery Claims for Certain Liability Settlements

The Centers for Medicare and Medicaid Services (CMS) has announced a new fixed percentage option regarding Medicare’s recovery claims for certain liability (including self-insurance) settlements beginning November 7, 2011. To review CMS’ announcement, click here

This option will be available to beneficiaries who receive certain types of liability (including self-insurance) settlements of $5,000 or less. Under CMS’ new plan, a beneficiary who elects this option will be able to resolve Medicare’s recovery claim by paying Medicare 25% of his/her total liability settlement instead of using the traditional recovery processes.

In order to qualify for this option, the following criteria must be met:

  1. The liability insurance (including self-insurance) settlement is for a physical trauma based injury. (This means that it does not relate to ingestion, exposure, or medical implant), and
  2. The total liability settlement, judgment, award, or other payment is $5000 or less, and
  3. The beneficiary elects the option within the required timeframe and Medicare has not issued a demand letter or other request for reimbursement related to the incident, and
  4. The beneficiary has not received and does not expect to receive any other settlements, judgments, awards, or other payments related to the incident.

In electing this option, the beneficiary will forego his/her right to appeal the fixed payment amount or request a waiver of recovery for the fixed payment amount.

CMS advises that a full explanation, including instructions on how and when to elect this option, will be available on CMS’ website on November 7, 2011 under the Fixed Percentage Option section of both the Attorney and Beneficiary Toolkits. The website link to review this forthcoming information is

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