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Medicare liens could apply to wrongful death settlements

Arkansas residents who are contemplating the filing of a wrongful death lawsuit after the death of a family member might need to consider the possibility that the Medicare system could be entitled to a portion of the resulting settlement or award. Laws that define the situations when medical expenses could be counted as damages vary by state, but federal law states that a Medicare lien will be established if a third party was responsible for a Medicare recipient's injuries. The government considers payments made by Medicare prior to the recovery of damages from a responsible party conditional, and it will seek reimbursement from a party found to be liable.

In states that allow for the recovery of medical expenses as part of a wrongful death settlement, Medicare could make a claim upon the settling party. A distinction arises, however, if the wrongful death lawsuit is not seeking compensation for medical bills related to the death. Court precedents have established that the responsible party does not need to designate Medicare as a payee when paying a settlement for damages suffered by the survivor and not the medical expenses suffered by the decedent.

In one case, the defendant had concerns about being exposed to a federal lawsuit on behalf of Medicare if the government was not reimbursed as part of the settlement. The court struck down the request, however, because none of the damages in the lawsuit were eligible for a Medicare lien.

A surviving family member making a wrongful death claim for a person whose medical bills from the accident were paid by Medicare prior to death would need to get information about this detail when preparing a lawsuit. An attorney familiar with the distinctions between a survivor's damages and a decedent's costs could provide advice about how to proceed with the lawsuit.

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