Attorney Who Received Settlement Funds Must Reimburse Medicare

A federal district court rules that Medicare is entitled to recover its share of a Medicare recipient's personal injury settlement directly from the recipient's attorney. U.S. v. Harris (U.S. Dist. Ct., N.D. West. Va., No. 5:08CV102, March 26, 2009).

James Ritchea was injured when he fell off a ladder. The Centers for Medicare and Medicaid Services (CMS) paid more than $22,000 for medical services on his behalf. Subsequently, Mr. Ritchea retained attorney Paul J. Harris to sue the ladder retailer and the case eventually settled for $25,000. Despite having forwarded details of the settlement payment to Medicare, neither Mr. Ritchea nor Mr. Harris responded to CMS' notice that it was entitled to $10,253.59 from the settlement proceeds.

The United States of America sued Mr. Harris in federal district court to recover CMS' share of the settlement proceeds. After Mr. Harris' motion to dismiss was denied, the United States filed a motion for summary judgment, arguing that the Medicare Secondary Payer Statute (MSPS) expressly authorized CMS to recover its share of the settlement proceeds directly from Mr. Harris. Mr. Harris did not respond to the motion.

The U.S. District Court grants the motion for summary judgment, ruling that as a matter of law, CMS is entitled to reimbursement directly from Mr. Harris because the MSPS allows recovery "from any entity that has received payment from a primary plan," including an attorney.

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