In December the Centers for Medicare and Medicaid Services (CMS) signaled a new policy of more aggressive enforcement of the obligation of self-insureds, insurers and attorneys to make sure past Medicare payments get repaid from personal injury settlements.

On December 1, 2009 the case of U.S. v. Stricker, et al was filed in the U.S. District Court for the Northern District of Alabama.  Defendants include Monsanto Company, Pharmacia Corporation, Solutia Inc., Travelers Indemnity Company, AIG and several plaintiffs’ attorneys.  The allegations are that in 2003 the corporate defendants and their insurers entered into settlement of a personal injury action. The plaintiffs in the personal injury action included Medicare beneficiaries whose medical treatment was paid at least in part by Medicare. When the personal injury case was settled, apparently, no one took steps to determine what Medicare had paid for the related treatment nor took action to reimburse Medicare.

The government therefore is suing the personal injury claim defendants, their insurers and the attorneys for the Medicare beneficiaries for failing in their duties under the Medicare Secondary Payer statute -42 USC 1397y(b)(2).  Damages sought in the case include double the amount paid by Medicare in medical treatment related to the underlying tort case, plus interest.

This may be the first time the government has gone after insurers, insureds and plaintiffs’ attorneys all in the same case. But it certainly won’t be the last time.  As mandatory insurer reporting of personal injury settlements paid to Medicare beneficiaries gears up during in 2010, the government will be building a powerful new database it –and qui tam bounty hunters- can use to find new targets for recoveries.