Go to main navigation
390 North Orange Avenue, Suite 1610, Orlando, Florida 32801

Issues To Consider If Your Personal Injury Claimant Is A Medicare Beneficiary, And Is Being Treated Under Letters Of Protection

One of the more challenging aspects of successful claims resolution arises in situations where a personal injury claimant receives medical care and treatment pursuant to letters of protection.  A letter of protection (“LOP”), of course, is an arrangement which allows the injured claimant to obtain medical care in exchange for a promise to pay for those services directly out of a future settlement or judgment.  Claims involving LOPs are often difficult, if not impossible to settle, because the amounts billed for services rendered under an LOP are typically many times greater than if those exact same services had been billed through private insurance, workers’ comp or Medicare.  Indeed, it is not uncommon to see medical bills rendered pursuant to an LOP totaling ten to fifteen times higher than if those same medical services had been billed under private insurance or some other statutory fee schedule.

So, when confronted with astronomical medical bills submitted pursuant to an LOP, are there avenues that can be explored to hopefully mitigate those damages and obtain a more favorable resolution?  The answer is “yes”, and one such opportunity arises in situations where the personal injury claimant is over the age of 65 and is (or should be) a Medicare beneficiary.

The first step in evaluating whether an opportunity may exist to challenge unreasonable medical bills for services rendered pursuant to an LOP is to determine whether that doctor or facility is a “participating” or “non-participating” Medicare provider, or whether that provider has formally “opted out” of the Medicare program.  Medicare requires doctors and other health care providers to formally enroll in the program; and, upon doing so, each provider is furnished with a billing number and a “national provider identifier”.  Providers who choose to participate in the Medicare program are required to sign and submit an agreement each year, indicating their willingness to accept assignment for all covered items and services furnished to Medicare beneficiaries for the upcoming year.  A vast majority of doctors and providers submit this agreement indicating their willingness to participate in the Medicare program, and abide by its rules and regulations.  Indeed, in 2011, more than 97% of doctors were “participating physicians”.  Accordingly, absent evidence to the contrary, it is a fair assumption that most providers providing services to claimants who are Medicare beneficiaries have expressly agreed to accept Medicare assignment.

A provider who enrolls in Medicare but does not submit a signed participation agreement is considered a “non-participating provider”.  A non-participating provider can choose whether or not to accept Medicare assignment on a claim-by-claim basis.  However, if a non-participating provider chooses not to accept Medicare assignment for a particular claim, Medicare will instead pay the beneficiary directly for the services provider (at Medicare rates), and the non-participating provider is restricted from billing more than 115% of the Medicare reimbursement rate.  In other words, even a “non-participating physician” is still subject to certain billing limitations/restrictions.

Of course, a health care provider is also free to formally “opt out” of the Medicare program; however, as noted above, only a very small percentage of doctors (less than 3% in 2011) elect to do so.  In order to formally “opt out” of the Medicare program, a provider is required to submit a signed Affidavit to Medicare reflecting this intention, which shall be effective for a period of 2 years.

Once it has been determined whether a given health care provider has either agreed to accept Medicare assignment (greater than 97%), or has formally opted out of the program (less than 3%), a subsequent determination can then be made regarding the propriety of an LOP.  Specifically, only if a provider has “opted out” of Medicare is that provider authorized to furnish services to a Medicare beneficiary pursuant to a private contract (eg. letter of protection) and the Medicare claims submission and limiting charge rules do not apply.  Providers who have enrolled in Medicare are bound by agreement not to charge Medicare beneficiaries individually for services that that patient/claimant could have had covered under Medicare.  See 42 U.S.C. § 1395cc.

However, it should be further noted that, even if a provider has “opted out” of Medicare and has, instead, entered into a private contract with a Medicare beneficiary, such a contract must clearly state:

  • The beneficiary’s acknowledgement that he/she is giving up all Medicare payments for services rendered;


  • The beneficiary’s acknowledgement that he/she is liable for all charges without Medicare balance billing limitations or assistance from Medigap or other supplemental insurance, and;


  • The beneficiary’s acknowledgement that he/she has the right to receive services from a medical provider eligible for Medicare coverage.

So, if a claimant’s attorney asserts that his client’s providers have formally “opted out” of Medicare, request copies of the required Affidavits as well as the “private contract” entered into between provider and patient (to determine whether the required “acknowledgements” have been incorporated within).

If the provider (or claimant’s counsel) cannot prove that there has been a proper “opt out” of Medicare, request or remind claimant’s counsel that if his client has received any Medicare covered services from a “participating” provider, or even a “non-participating” provider, section 1848 of the Social Security Act requires that provider to complete a claim form and submit it to Medicare on behalf of the beneficiary/claimant.  Generally, claim forms must be submitted to Medicare no later than the end of the next calendar year in which the service was provided.  A participating or non-participating provider who misses these filing deadlines cannot bill Medicare for its share of the service furnished – i.e. the provider is no longer entitled to receive the 80% reimbursement from Medicare.  However, the provider is still allowed to bill the patient/claimant for his/her portion of the coinsurance (generally 20% of what Medicare would have allowed for a Medicare-covered service)

So, depending on the age of the medical bills, if claim forms have not been timely submitted by a “participating” or “non-participating” provider, an argument exists that the claimant’s bills should be properly reduced to an amount that would represent 20% of the Medicare reimbursement rate – as the claimant would have no liability for any greater amount.

If a claimant or his/her counsel advises that a provider is unwilling to submit the required claim form to Medicare, they should be encouraged to contact the Medicare Administrative Contractors (MACs), who will take the appropriate action.  Health care providers will be reprimanded for their refusal to follow Medicare policy, and may lose their right to bill Medicare altogether for recurring or egregious violations.

Finally, in addition to the Social Security Act and the accompany Medicare rules and regulations, Florida Statute § 456.056(4) (titled “Treatment of Medicare Beneficiaries; refusal, emergencies, consulting physicians”) also states that “[i]f treatment provided to a beneficiary is not for such emergency medical condition, and the primary physician accepts [Medicare] assignment, all consulting physicians must accept [Medicare] assignment unless the patient agrees in writing, before receiving the treatment, that the physician need not accept assignment.”  Subsection (5) states that “any attempt by a primary physician or a consulting physician to collect from a Medicare beneficiary any amount of charges for medical services in excess of those authorized under this section, other than the unmet deductible and the 20 percent of charges that Medicare does not pay, shall be deemed null, void and of no merit.”

Bottom line, if confronted with a claim in which the injured claimant is a Medicare beneficiary and has received medical services rendered pursuant to letters of protection, there are avenues that merit further investigation to challenge the reasonableness and propriety of the corresponding bills.