A press release has been issued by the U.S. Attorney’s Office for the Eastern District of Pennsylvania announcing that U.S. Attorney William McSwain has entered into a settlement with a Philadelphia personal injury law firm, Rosenbaum & Associates, and its principal, Jeffrey Rosenbaum, Esq. to resolve allegations that they failed to reimburse the United States for certain Medicare payments the government had previously made conditionally to medical providers on behalf of firm clients who sought medical care. The press release can be found here.

Under the terms of the settlement agreement, Rosenbaum agreed to pay a lump sum of $28,000. Rosenbaum also agreed to (1) designate a person at the firm responsible for paying Medicare secondary payer debts; (2) train the designated employee to ensure that the firm pays these debts on a timely basis; and (3) review any outstanding debts with the designated employee at least every six months to ensure compliance. In addition, attorney Rosenbaum acknowledged that any failure to submit timely repayment of Medicare Secondary Payer (MSP) debt may result in liability for the wrongful retention of a government overpayment under the False Claims Act.

Commentary: For those that are interested, the settlement agreement was signed just yesterday, June 18, 2018, and can be found here. This is not the first time that the U.S. government/traditional Medicare has pursued a plaintiff attorney personally for failure to reimburse Medicare conditional payments. Recall U.S. v. Harris, in which CMS also pursued a plaintiff attorney personally for reimbursement of conditional payments, even though the settlement funds had already been paid to the plaintiff.

Federal regulations, particularly 42 CFR 411.24 (g), provides that Medicare may pursue recovery from any party that has received proceeds from the settlement, which includes the beneficiary, the beneficiary’s attorney, medical providers, as well as of course, the primary plan.

What is particularly interesting here is both parties (both the U.S. government as well as attorney Rosenbaum) acknowledge that failure to repay Medicare conditional payments could result in liability under the False Claims Act (which can result in triple damages). We have seen some MSP False Claim actions initiated; however, all were dismissed. However, this acknowledgment here seems to indicate that the U.S. government believes that the False Claims Act is a legitimate claim to bring where Medicare has not been reimbursed. This would be in addition to the double damages that Medicare may pursue if Medicare has to file suit to recover the unreimbursed conditional payments.

This settlement should come as a stark reminder to all parties involved in settlements with Medicare beneficiaries that resolving conditional payments timely and establishing a compliance program is of utmost importance to avoid the potential for double or triple damages.


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