CMS Announcements on Fixed Percentage Option for Settlements of $5,000 or less, $300 Threshold Limit for Reimbursement, and Identification of Contractor for Medicare Secondary Payer Recovery

The Centers for Medicare and Medicaid Services (“CMS”) announced an option which will allow for payment of a simple fixed percentage on small dollar liability insurance or self-insurance settlements for physical trauma-based injuries. Effective November 7, 2011, in cases where the settlement is $5,000 or less, a Medicare beneficiary may opt to resolve Medicare’s recovery claim by paying Medicare 25% of the total settlement instead of using the standard recovery process.

The benefit of this option is that parties will be able to calculate the amount of reimbursement due to Medicare immediately during settlement negotiations, without waiting for the plaintiff/claimant to obtain a Final Demand Letter from CMS. 

This fixed percentage option is not applicable -- 
to claims involving ingestion, exposure or medical implants 
if Medicare has already issued a Final Demand Letter or other request for reimbursement 
if plaintiff/claimant will receive other settlements, judgments, or payments related to the injury 

In addition, CMS announced that Medicare will not seek to recover in cases where the plaintiff/claimant received a lump sum settlement of $300 or less.  The $300 threshold is not applicable – 
to claims involving ingestion, exposure or medical implants 
if plaintiff/claimant will receive additional settlements on the same injury 

Finally, effective October 1, 2011, CMS has contracted with Group Health Incorporated to perform the Medicare Secondary Payer recovery activities while a full and open competition for this work is being conducted. The current phone numbers and mailing addresses for these activities remain unchanged.

For more information, see the Medicare Secondary Payer Recovery Contractor website, at, or the CMS website at
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