When a Medicare beneficiary settles an injury or malpractice claim, Medicare must be repaid for the "conditional payments" it made for accident-related care, but 42 C.F.R. § 411.37 makes Medicare share the cost of getting the recovery. Enter the gross settlement, the attorney fee, the case costs and the conditional payment figure from the BCRC's Conditional Payment Letter or demand. The estimator applies the procurement-cost reduction, shows what the beneficiary nets, estimates interest if the demand is past the 60-day window, and lays out the Benefits Coordination & Recovery Center timeline with the appeal and waiver forms named. For plaintiff and defense attorneys, paralegals, lien-resolution staff and claims professionals.
How the recovery is built (42 C.F.R. § 411.37)
Timeline checklist
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How to use the result
Start from the right Medicare number. Use the conditional payment total after you have disputed unrelated claims on the MSPRP or in writing. The Conditional Payment Letter is interim; only the final demand fixes the figure. If the demand already issued, use the demand amount as the Medicare figure and the estimator shows the interest exposure.
Check which paragraph applied. When Medicare's payments are less than the settlement, § 411.37(c) reduces Medicare's claim by the same percentage that fees and costs took from the gross settlement. When Medicare's payments equal or exceed the settlement, § 411.37(d) gives Medicare the whole settlement minus fees and costs, so the beneficiary nets nothing without a waiver or compromise.
Report the settlement promptly and accurately. The Final Settlement Detail must show the fees and costs the beneficiary actually bore; Medicare does not reduce for costs it was never told about, and a CPN that goes unanswered for 30 days becomes a demand with no reduction at all.
Pay or act inside 60 days. Interest accrues from the demand date and is assessed for every full 30-day period once the debt is unresolved at day 60. An appeal or waiver request does not stop the clock (interest is refunded if you win), the Intent to Refer letter goes out on day 90, and Treasury referral follows at day 150.
Use the right remedy. Appeal (redetermination within 120 days) when the amount or existence of the debt is wrong. Request a waiver under § 1870(c) (Form SSA-632) when the beneficiary is without fault and repayment would cause hardship. Request a compromise when the settlement cannot cover the demand. Small physical-trauma settlements may qualify for the 25% Fixed Percentage Option or the Self-Calculated amount before any demand issues.
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Sources and method
How does Medicare reduce its lien for attorney fees?
Medicare is a secondary payer whenever a liability insurer, no-fault carrier or workers' compensation plan is responsible for an injury. It pays "conditionally" so the beneficiary gets care, then recovers from the settlement. Because the beneficiary paid a lawyer to produce that settlement, 42 C.F.R. § 411.37 requires Medicare to absorb its proportional share of the procurement costs: the ratio of fees plus costs to the gross settlement is applied to Medicare's claim and subtracted from it. A one-third contingency fee plus 5% in costs therefore cuts Medicare's demand by about 38%. The reduction is automatic once the Final Settlement Detail reports the fees and costs, but it only applies when the costs were incurred because the claim was disputed and were actually borne by the party Medicare is recovering from. If Medicare has to sue to collect, § 411.37(e) removes the proportional reduction. Section 111 reporting by the insurer tells CMS the settlement happened, so an unreported, unpaid demand is found quickly.