Some lawyers apparently believe that:
If you believe this to be the case, we urge you to read U.S. v. Harris (Civ.Act. No.5:08CV102, U.S.Distr. Ct., No. Distr. of W. Va., 11/13/2008).
Harris represented a client who suffered injuries when he fell off a ladder bought from a local retailer. He was retained after the Centers for Medicare and Medicaid (CMS) paid the client’s Medicare claims of $22,549.67. Payment was conditioned on CMS’ right of recovery from any entity responsible for making primary payment.
Harris obtained a settlement from the ladder retailer of $25,000. He notified Medicare of the settlement and of his attorney’s fees and costs. Medicare then determined that it was owed $10,253.59. When this was not paid within the statutorily-required sixty-day time period, Medicare brought an action against Harris for $11,367.78 that included an interest charge and a denial of a portion of his attorney fees and costs.
Harris moved to dismiss the case because “a lawyer, in representing a client, cannot be held individually liable … when he … distributes settlement funds with the knowledge and consent of the government.” Since he provided the details of the settlement to Medicare, the settlement funds were distributed to his clients with the Medicare’s knowledge and consent, and he is, therefore, not individually liable to repay the debt.
The Court found Harris’ argument to be without merit. The Court’s key findings were:
“The federal regulations … provide the entities in which the government can recover primary payments:
Recovery from parties that receive primary payments. CMS has a right of action to recover its payments from any entity, including a beneficiary provider, supplier, physician, attorney, State agency or private insurer that has received a primary payment. 42 C.F.R. § 411.24(g) (emphasis added).”
“In this case, [the client] and the defendant received a $25,000.00 settlement and primary payment from the ladder retailer. Because the ladder retailer took responsibility for the payment of [the client’s] medical services, demonstrated by ‘a payment conditioned upon the recipient’s compromise, waiver, or release …’ the government can now seek reimbursement for the medical services paid for by Medicare. Furthermore, because the government can recover such payments “from any entity that has received payment from a primary plan,” including an attorney, the defendant’s argument that he cannot be held individually liable to reimburse the government … is without merit.” (citations omitted)
We have previously offered risk management advice on avoiding liability for unpaid Medicare debts. Now seems like a good time for a review.