Companies and their attorneys risk monetary penalties and DOJ enforcement if they fail to ensure that toxic tort and personal injury plaintiffs reimburse Medicare.

By Christine Rolph, Taiga Takahashi, and Holly Bainbridge

The US Department of Justice (DOJ) has filed numerous enforcement actions against defendant companies and law firms based on an alleged failure to reimburse the government for its share of personal injury and toxic tort settlements, pursuant to the Medicare Secondary Payer Act (MSP Act), as amended by Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007.[1] Medicare now seeks to enhance its enforcement of penalties for non-compliance, proposing a rule that implements the MSP Act’s reporting requirements. Under the MSP Act, inaccurate reporting of settlements, judgments, or other payments made to Medicare beneficiaries may result in a civil monetary penalty up to US$1,000 per day per Medicare beneficiary.

The new rule, if finalized, would provide guidance on how and when penalties should be assessed, as well as facilitate increased government monitoring of compliance. The clear message to all parties in toxic tort and personal injury litigation is to investigate whether any plaintiffs are Medicare recipients and, if so, to ensure full compliance with the reporting and reimbursement requirements in the MSP Act.