Is There a Statute of Limitations to Repaying Medicare?

Ask The Experts

Written By: Epiq Subject Matter Experts


My firm has a client who was injured in a motor vehicle accident in 2007. We settled the case in 2010. Our office was in the process of getting a final repayment amount from Medicare but Medicare stopped communicating with our office and the client in 2011. The attorney who was handling this case refunded the monies we were holding in our trust account to the client in 2014. In August, 2019 the client and I both received a demand letter from CMS. Is there any kind of statute of limitations with regards to repaying Medicare if they let eight years pass before demanding money?            

- Arizona Attorney 


Under the statute of limitations (28 U.S.C. 2415), Medicare has six (6) years and three (3) months to recover Medicare’s claim. The statute of limitations begins at the time Medicare is made aware that the overpayment exists.

Medicare’s overpayment does not come into existence until a judgment award or settlement offer is accepted. It is at the point of settlement that Medicare’s conditional payments are considered to be overpayments. Medicare’s claim comes into existence under 42 U.S.C. 1395Y(B)(2)(B)(I) when payment for medical expenses that Medicare conditionally paid for has been made by a third-party payer.

In this situation, the date of settlement was 2010. The clock started ticking on Medicare's statute of limitations when Medicare was notified of the settlement. Considering that Medicare has sent a demand letter, it must be addressed promptly to avoid collection efforts by Medicare, such as garnishment of the client’s Social Security benefits or double damages for the firm.

Section 42 CFR 411.23 states that a beneficiary must cooperate in any action taken by the Centers for Medicare and Medicaid Services (CMS) in recovering conditional payments. Failure to do so or not protecting the Medicare program during and after settlement negotiations may result in CMS taking action against the beneficiary to collect the mistaken payment.

In the event that reimbursement is not made to Medicare as required by 42 USC 1395y(b)(2)(B)(I), action may be brought against any entity responsible for payment (and may collect double damages from insurance companies), or any entity that has received a third-party settlement. Under 42 CFR 411.24(g), this includes attorneys whose fees are paid from settlement proceeds. Please refer to US v. Sosnowski, et. al. where judgment was entered against a beneficiary and his attorney for failing to reimburse Medicare after receiving settlement proceeds on a personal injury case.

CMS has a direct right of action to recover its payments from any entity, including a beneficiary, provider, supplier, physician, attorney, state agency, or a private insurer that has received a third-party payment, 42 CFR 411.24.

Having said this, the best way to address the situation is to request a post-settlement compromise of Medicare's interest. When submitting this request, craft a compelling story while providing Medicare with the facts of the case and supporting documentation for the post-settlement argument. All post-settlement compromise requests must be in writing and sent to the MSPRC Medicare Contractor. Upon receipt, they will forward the request to the CMS Regional office. The MSPRC contractor does not have the authority to compromise. The authority to compromise a Medicare claim is reserved exclusively for the CMS home office or regional offices. Any agreement for a compromise settlement under the Federal Claims Collection Act ("FCCA") may not be appealed.

Should you need further guidance please email us by clicking the button below.

Email Us For Further Discussion

Subscribe Here!