Example: As the result of a work injury, an individual suffered loss of income and incurred medical expenses for which the total workers' compensation payment would have been $24,000 if the case had not been compromised. The medical expenses amounted to $18,000. The workers' compensation carrier made a settlement with the beneficiary under which it paid $8,000 in total. A separate award was made for legal fees. Since the workers' compensation compromise settlement was for one-third of the amount which would have been payable under workers' compensation had the case not been compromised ($8,000/$24,000= 1/3), the workers' compensation compromise settlement is considered to have paid for one-third of the total medical expenses (1/3 * $18,000 = $6,000).
The difference between the amount of the workers' compensation payment for medical expenses and any beneficiary payments constitutes the Medicare overpayment. The beneficiary is liable for that amount.
Example: In the example in paragraph (a) of this section, it was determined that the workers' compensation settlement paid for $6,000 of the total medical expenses. The $18,000 in medical expenses included $1,500 in charges for services not covered under Medicare, $7,500 in charges for services covered under Medicare Part B, and $9,000 in hospital charges for services covered under Medicare Part A. All charges were at the workers' compensation payment rate, that is, in amounts the provider or supplier must accept as payment in full.
The Medicare reasonable charge for physicians' services was $7,000 and Medicare paid $5,600 (80 percent of the reasonable charge). The Part B deductible had been met. The Medicare payment rate for the hospital services was $8,000. Medicare paid the hospital $7,480 ($8,000-the Part A deductible of $520).
In this situation, the beneficiary's payments totalled $3,920:
Services not covered under Medicare | $1,500 |
Excess of physicians' charges over reasonable charges | 500 |
Medicare Part B coinsurance | 1,400 |
Part A deductible | 520 |
Total | 3,920 |
The Medicare overpayment, for which the beneficiary is liable, would be $2,080 ($6,000-$3,920).
42 C.F.R. §411.47