A growing share of Medicare beneficiaries are enrolled in Medicare Advantage plans, which are administered by private insurers rather than directly by the federal government. For PI firms, the difference is not academic. Conditional payment recovery for Original Medicare runs through a central contractor and a defined online process. Medicare Advantage recovery typically runs through the plan itself, often via a subrogation vendor, and with its own timelines and documentation expectations. A firm that checks a client's Medicare status only through the central system may disburse without ever hearing from the plan, and then face a demand later.
Identify the Plan at Intake
Ask every client over 65, or receiving disability benefits, which health coverage they used for accident-related treatment. A Medicare card alone does not tell you the program. Request the insurance card the client presented to providers, which will name the Advantage plan if there is one. Providers' bills and explanations of benefits also identify the payer. Record the plan name, member identification number, and effective dates in the case management system, and set a task to send notice of the claim to the plan.
Eligibility can change during a case. A client may switch plans during annual enrollment or move between Original Medicare and Advantage. Treatment before and after the change can be paid by different entities, each with its own reimbursement right. Verify coverage at several points: intake, mediation, and before disbursement.
The Legal Basis for the Plan's Claim
Federal law gives Medicare Advantage organizations secondary payer rights. The statute and implementing regulations allow the plan to charge a liability insurer, or the beneficiary who has received a settlement, when the plan has paid for services that a primary payer is responsible for. The courts have recognized that plans can enforce these rights, and at least one federal appellate court has held that the Medicare Secondary Payer statute provides a private cause of action, including for double damages in certain circumstances, against a primary payer that fails to reimburse. For practical purposes, treat the plan's claim as seriously as a government demand. Failure to resolve it can expose the client, and potentially the firm, to a later suit.
Federal regulations also provide that the amount a plan can recover from a beneficiary is subject to reduction for the pro rata share of procurement costs, which parallels the rule for Original Medicare. Ask the plan to apply the reduction, and show the computation. Plans differ in how routinely they apply it, so the request should be in writing.
Workflow for Resolving the Claim
- Send notice early. Contact the plan's subrogation department or its vendor when the case is retained, and request an itemized statement of payments related to the injury.
- Review for relatedness. Compare the plan's itemization to the medical chronology. Dispute charges for unrelated conditions, duplicate payments, and treatment outside the accident timeline.
- Request the reduction in writing. Provide the fees and costs, the settlement amount, and the computation.
- Confirm the final amount. Obtain a written final demand or lien release before disbursement. Verbal assurances are not sufficient.
- Hold funds in trust. Retain the disputed portion in the trust account until the matter is resolved.
Plans are not always prompt. Build time into the settlement timeline, and tell the client early that disbursement may depend on the plan's response. A calendar reminder to follow up every two weeks prevents files from sitting idle.
Common Problems
One recurring issue is the plan's initial claim for all payments made during a long period, not just treatment related to the accident. Another is a claim that includes amounts paid by the member as copays and deductibles, which belong to the client and should be treated separately. A third is the interplay with other payers: the client may also have secondary coverage, workers' compensation, or a medical payments policy that pays some of the same charges. Coordinate among all payers so that no expense is claimed twice.
Settlements structured around future medical care deserve special care. Medicare's interests in future treatment are addressed differently in liability cases than in workers' compensation, and counsel should document the reasoning behind any allocation. For related guidance see our liens and settlement category and the operational guidance in our practice operations coverage.
Building the Process Into the Firm
The most reliable fix is a checklist. At intake, record the Medicare program type. At the demand stage, confirm the plan has been notified. Before disbursement, require a written resolution from each payer, including Original Medicare, any Advantage plan, Medicaid, and private insurers. Train staff on the difference between the programs so the question does not depend on one person's memory.
Takeaways
- Identify whether the client has Original Medicare or an Advantage plan at intake.
- Contact the plan directly, since the central recovery process does not cover it.
- Request the procurement-cost reduction in writing.
- Obtain a written release before disbursing, and hold disputed amounts in trust.