MD Law Firm Settles with DOJ for Failure to Reimburse Conditional Payments

In a recent publication, the U.S. Attorney’s Office for the District of Maryland has confirmed that a Baltimore-based firm – Kandel & Associates, P.A. has entered into a settlement agreement to resolve alleged claims that the firm failed to reimburse Medicare for conditional payments made by CMS on behalf of firm clients. The claims against Kandel allege that over several years, the firm received settlement proceeds on behalf of its clients but neither the firm nor its clients reimbursed Medicare for conditional payments. The USAO has identified at least twelve Medicare liens that went unresolved.

Paying Outstanding Conditional Payments

The firm has agreed to pay $39,828.66 in order to resolve these matters and in addition to the monetary provision of this agreement, Kandel has agreed to designate a liaison within its office responsible for identifying and paying outstanding conditional payments on a timely basis. In addition, the liaison must also conduct periodic reviews for any outstanding Medicare liens and resolve as applicable.

The full press release issued by the U.S. Attorney’s Office for the District of Maryland can be found here – https://www.justice.gov/usao-md/pr/maryland-law-firm-kandel-associates-pa-agrees-pay-united-states-nearly-40000-settle

As the USAO notes in its publication, this settlement serves as a reminder that all parties to a claim must be aware of Medicare’s recovery rights and the independent obligations to reimburse Medicare for conditional payments. These obligations are not unique to carriers and employers. Of interest, the Federal Regulations governing this recovery right distinctly provide that CMS has a direct right of action to recovery from any primary payer, and further, may recover from any entity including a beneficiary, provider, supplier, physician, attorney, state agency, or private insurer that has received primary payment. See generally 42 CFR §411.24.

Settlement Not the First of Its Kind

This settlement is not the first of its kind. Over the last few years, we have seen similar settlements between the DOJ and Plaintiff firms including a 2018 settlement in the Eastern District of Pennsylvania (Rosenbaum) and a 2020 settlement in the Middle District of Pennsylvania (Angino). This speaks to the growing recovery effort of not only CMS and the DOJ, but also Medicare Advantage plans in light of the PAID Act, as well as independent recovery firms with assignment rights.

Initiating conditional payment investigations into all applicable Medicare plans prior to entering into a settlement agreement and ensuring your release language is clear, encompassing, and protective of your interest can be key in avoiding any of the pitfalls described above. Please don’t hesitate to contact us with any questions regarding Medicare conditional payments and reimbursement rights at [email protected].