U.S. Attorney Recovers Against Plaintiff Attorney for Failure to Reimburse Medicare

July 2, 2018

close up of judge's gavel with the scales of justice in the background

A Philadelphia personal injury firm and its principal recently entered into a settlement agreement with the U.S. Attorney for the Eastern District of Pennsylvania to pay a lump sum of $28,000 for repayment of Medicare conditional payments. The June 18, 2018 press release from the U.S. Attorney’s Office explains that the law firm, Rosenbaum & Associates, and its principal, Jeffrey Rosenbaum, Esq., allegedly failed to reimburse this amount to Medicare stemming from nine settlements handled by the firm.

According to the release, Rosenbaum agreed to enter into a settlement with the federal government requiring not only reimbursement of the conditional payments but also to:

(1) designate a person at the firm responsible for paying Medicare secondary payer debts;

(2) train the designated employee to ensure that the firm pays these debts on a timely basis; and

(3) review any outstanding debts with the designated employee at least every six months to ensure compliance.

Rosenbaum also acknowledged as part of the agreement that “any failure to submit timely repayment of Medicare secondary payer debt may result in liability for the wrongful retention of a government overpayment under the False Claims Act.”

Practical Implications

This is another shot across the bow to plaintiffs’ attorneys warning them of their obligation under the Medicare Secondary Payer Act to ensure Medicare is appropriately reimbursed out of the settlement funds. Medicare regulations are clear in stating under 42 CFR 411.24 (g): “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.”

In regard to implications of this decision going forward, U.S. Attorney William M. McSwain said, “When an attorney fails to reimburse Medicare, the United States can recover from the attorney—even if the attorney already transmitted the proceeds to the client. Congress enacted these rules to ensure timely repayment from responsible parties, and we intend to hold attorneys accountable for failing to make good on their obligations.”

The provisions of the settlement agreement act as a roadmap for plaintiffs’ attorneys in ensuring Medicare conditional payments are properly resolved as part of settlement. For further consultation on Medicare conditional payment best practices in liability settlements, please contact Dan Anders, Chief Compliance Officer, at 888.331.4941 or Daniel.anders@towermsa.com.