ary, who will then forward the request to the appropriate office.33
Generally, the
intermediary is prohibited from negoti- ating or compromising Medicare’s claim other than for the reduction for attorney’s fees and expenses.34
While offices within
Medicare evaluate the request for waiver or reduction of the claim, only the De- partment of Justice can authorize the compromise or waiver of a claim exceed- ing $20,000.35
In instances in which the
total amount of the claim does not ex- ceed $100,000, Medicare refers the request for compromise or waiver to the United States Attorney in the plaintiff’s judicial district. In instances in which the total amount of Medicare’s claim exceeds $100,000, the request for compromise or waiver is considered by the Commercial Litigation Branch, Civil Division, of the Department of Justice.37 Medicare’s intermediary will provide a recommendation to the Justice Depart-
33Medicare Intermediary Manual, § 3418.2. 34
42 U.S.C. 1395gg(c). 354 C.F.R. 103.1(b) 36Id. 37Id.
384 C.F.R. 103.1(b). 394 C.F.R. 103.1(a). 404 C.F.R. 103.2(b).
ment in instances where the amount of the claim exceeds $20,000.38
The Justice
Department can accept Medicare’s recommendation, reject Medicare’s rec- ommendation, or modify Medicare’s recommendation. Under the regulations, Medicare bases its recommendation on the consideration of (a) the inability of the debtor to pay the full amount within a reasonable time; (b) the inability of the government to collect within a reasonable time when the debtor refuses to pay.39
In
determining the debtor’s inability to pay, the following factors, among others, may be considered: [1] Age and health of the debtor; [2] Present and potential income; [3] Inheritance prospects; [4] The possibility that assets have been concealed or improperly transferred by the debtor; and
[5] The availability of assets or in- come which may be realized by enforced collection proceedings.40
The fact that Medicare can consider the possibility that assets have been im- properly transferred by the debtor is one more reason that, whatever it may be called, Medicare’s recovery interest should be satisfied prior to disbursement of settle- ment proceeds to the Medicare beneficiary. Compromises payable in in- stallments are discouraged. However, if Medicare accepts an installment payment plan, it requires a legally enforceable agree- ment be produced providing for the reinstatement and acceleration of the bal- ance due upon default in the payment schedule.41
Medicare can require the ben-
eficiary to execute a sworn statement of assets and liabilities, income and ex- penses.42
In that regard, one of the first
things an attorney requesting waiver or compromise of a Medicare lien will re- ceive is a financial disclosure form to be filled out by the client. Even when Medi- care does allow installment payments, the compromise agreement does not become
(Continued on page 13)
414 C.F.R. 103.2(d). 424 C.F.R. 103.2(e).
Summer 2000
Trial Reporter
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