Medicare Lien Calculator for a Personal Injury Settlement
When Medicare has paid for care after an injury and the injured person then settles a personal injury claim, Medicare recovers what it paid, reduced for the cost of getting the settlement. The federal regulation sets the formula, and this page quotes it. The calculator below applies it to your figures and shows each step.
This page uses "Medicare lien" for Medicare's recovery of its conditional payments from a settlement. It covers original Medicare's recovery under the regulation quoted here, not Medicare Advantage plans or Medicaid.
Compute what Medicare recovers
Enter the settlement, the procurement costs and Medicare's conditional payments. The calculator applies the regulation's formula for your figures, paragraph (c) or (d), and shows the arithmetic.
The cost of procuring the judgment or settlement, in the regulation's words. Ask your lawyer which costs to enter; enter 0 if none apply.
The amount Medicare paid for the care related to the claim.
Enter all three amounts to see what Medicare recovers.
What a Medicare lien in a personal injury case is
Medicare can pay for care when another payer is responsible, and the regulation calls that a conditional payment: “a Medicare payment for services for which another payer is responsible, made either on the bases set forth in subparts C through H of this part, or because the intermediary or carrier did not know that the other coverage existed.” (42 C.F.R. § 411.21)
When a settlement or judgment pays for the same care, Medicare recovers. “CMS may initiate recovery as soon as it learns that payment has been made or could be made under workers' compensation, any liability or no-fault insurance, or an employer group health plan.” (42 C.F.R. § 411.24(b))
And it can recover from whoever received the payment: “CMS has a right of action to recover its payments from any entity, including a beneficiary, provider, supplier, physician, attorney, State agency or private insurer that has received a primary payment.” (42 C.F.R. § 411.24(g))
The deadline to repay is in the regulation too: “If the beneficiary or other party receives a primary payment, the beneficiary or other party must reimburse Medicare within 60 days.” (42 C.F.R. § 411.24(h))
The reduction for the cost of getting the settlement
Medicare does not take its full payments from a disputed claim. The regulation reads: “Medicare reduces its recovery to take account of the cost of procuring the judgment or settlement, as provided in this section, if” (42 C.F.R. § 411.37(a)(1)) “Procurement costs are incurred because the claim is disputed; and” (42 C.F.R. § 411.37(a)(1)(i)) “Those costs are borne by the party against which CMS seeks to recover.” (42 C.F.R. § 411.37(a)(1)(ii))
The regulations read for this page do not define procurement costs beyond those words, so this page does not list what counts as one. Your lawyer can say which costs of the claim to enter.
The formula, step by step
When Medicare paid less than the settlement: “If Medicare payments are less than the judgment or settlement amount, the recovery is computed as follows:” (42 C.F.R. § 411.37(c)) “Determine the ratio of the procurement costs to the total judgment or settlement payment.” (42 C.F.R. § 411.37(c)(1)) “Apply the ratio to the Medicare payment. The product is the Medicare share of procurement costs.” (42 C.F.R. § 411.37(c)(2)) “Subtract the Medicare share of procurement costs from the Medicare payments. The remainder is the Medicare recovery amount.” (42 C.F.R. § 411.37(c)(3))
When Medicare paid as much as the settlement or more: “If Medicare payments equal or exceed the judgment or settlement amount, the recovery amount is the total judgment or settlement payment minus the total procurement costs.” (42 C.F.R. § 411.37(d))
The calculator above takes your three figures, decides which of the two paragraphs applies, and does that arithmetic, rounding Medicare's share of the costs to the cent.
An example in round numbers
Say the settlement is $100,000.00, the procurement costs are $25,000.00, and Medicare paid $20,000.00. Medicare's share of the costs is $20,000.00 × $25,000.00 ÷ $100,000.00, which is $5,000.00. Medicare recovers $20,000.00 less $5,000.00, or $15,000.00, and $60,000.00 is left after the costs and Medicare.
Had Medicare paid $120,000.00, more than the settlement, the second paragraph would apply: Medicare recovers the settlement less the procurement costs, $75,000.00, and $0.00 is left.
When the formula is different
If CMS has to sue: “If CMS must bring suit against the party that received payment because that party opposes CMS's recovery, the recovery amount is the lower of the following:” (42 C.F.R. § 411.37(e)) That is, the lower of Medicare's payment and the settlement less the party's procurement costs. The calculator does not compute this case.
If CMS seeks its recovery from the primary payer instead: “If CMS seeks recovery from the primary payer, in accordance with § 411.24(i), the recovery amount will be no greater than the amount determined under paragraph (c) or (d) or (e) of this section.” (42 C.F.R. § 411.37(b))
Timing, and what to keep
The regulation gives 60 days to repay once a primary payment is received, as quoted above. Plan for the recovery before the settlement money is spent.
Keep the settlement agreement, the record of the procurement costs, and every letter from Medicare about the conditional payment amount. This page read no Medicare letter or portal, so it does not say how the amount is reported or disputed; your lawyer can.
Talking to a lawyer about a Medicare lien in a personal injury case
This site is not a law firm, does not refer anyone to a lawyer, and cannot say what a lawyer would recover. Which costs count, whether the conditional payment amount is right, and how the recovery is paid from the settlement are questions for a lawyer.
Bring the settlement figure, the fee agreement and the case costs, Medicare's letters, and the figures this calculator shows.