Medicare Compensation Recovery information for insurers and other payers

You need to tell us if you have awarded a compensation payment to an injured person before paying them any amount.

Who is a notifiable person

The notifiable person needs to tell us about compensation cases where the injured person has received Medicare benefits or subsidies for their compensable injury or illness. This only applies to a claim that has settled or is likely to settle for more than $5,000.

The notifiable person can be:

• a lawyer or solicitor
• an insurance company
• a compensation payer
• a representative or administrator or agent for any of the above.

You can find more about Medicare Compensation Recovery including the impacts for the injured person.

Definition of compensation for Medicare compensation recovery purposes

Under section 4 of the Health and Other Services (Compensation) Act 1995, compensation is defined as:

• a payment of damages
• a payment under an insurance scheme, or compensation under law
• a payment with or without admission of liability, resulting from judgment or settlement of a claim for damages or a claim under an insurance scheme
• any other compensation or damages payment, other than a payment under a scheme to where the recipient has contributed. For example, life insurance or superannuation.

For the purpose of this Act, compensation does not include:

• a payment by an individual who is not insured and is not required by law to be insured or indemnified
• a payment classified as compensation for criminal injuries, payments from redress schemes, or victims’ compensation claims
• a voluntary payment which whether on its own or in conjunction with other such payments has the effect of extinguishing by agreement a claim for compensation
• a claim that has not settled under an Australian law.

An individual is taken to be insured or otherwise indemnified from liability if both:

• the individual is a member of a representative organisation
• the representative organisation bears liability for paying on behalf of the individual member.

What we recover

When a person receives compensation for an injury or illness, this usually includes related medical costs.

This means that they may need to repay the Australian Government any of either the Medicare benefits, related benefits or subsidies or care costs, inclusive of any of the following:

• nursing home benefits
• residential care subsidies
• home care subsidies
• before they can receive the balance of their settlement sum.

Recovery is calculated based on related services between the date of injury or illness (DOI) and the date compensation is fixed by a judgment, settlement, or a reimbursement arrangement is made.

Medicare history statement

The Medicare history statement lists each service the injured person has received as a Medicare benefit. The care services statement is for the injured person or claimant to tell us if treatment for care was received as a result of the injury or illness. This includes all services since the date of the injury or illness to the date of the request.

The injured person or claimant needs to return the Medicare history and care service statements and Declaration to us by the due date. If they don’t, all listed services will be taken as relating to their compensable injury or illness.

We assess the information and reconcile the total amount of eligible benefits paid. We then issue you a Notice of past benefits and send a copy to the injured person or claimant.

Overdue statements

The injured person or claimant has 2 years to submit a completed overdue Medicare history statement and care services statement and Declaration for processing from either the date of:

• judgment or settlement
• reimbursement arrangement.

If we get a completed statement within 2 years, an amendment may reduce the recoverable amount. Excess funds can be authorised to be returned to the injured person or claimant on the Notice of judgment or settlement form.

Difference between a Notice of past benefits (NOBP) and a Notice of charge (NOC)

A Notice of past benefits is issued before judgment or settlement and:

• lists the identified services and any eligible benefits paid in total
• is valid for 6 months from the date of issue, if the claim reaches judgment or settlement while the NOPB is valid, this becomes the NOC.

A Notice of charge is issued after one of the following:

• judgment or settlement for the compensation claim occurs
• reimbursement arrangement is entered into.

We issue a Notice of charge to one of the following:

• you to pay the specified amount
• the injured person or claimant where an advance payment has been made and an amount is still outstanding.

Fixed medical, care costs or apportionment of liability

If a judgment or settlement has fixed the amount of past medical or care expenses, we adjust the amounts accordingly.

If it specifies that liability be apportioned between the parties, we reduce the amount payable by the proportion of liability.

Bulk Payment Agreement

A Bulk Payment Agreement (BPA) is a contractual agreement between the Chief Executive Medicare (CEM) and the notifiable person as outlined under section 34 of the Health and Other Services (Compensation) Act 1995.

The notifiable person is the compensation payer or insurer who must pay compensation to individuals in a class action claim.

If you’re the notifiable person, we’ll work with you to calculate the reimbursement amount owed to us for each claim. A BPA can only apply when the compensation amount awarded is for $5,000 or more. If a BPA applies, you must notify us of each claim resolved under a:

• settlement
• judgment
• reimbursement arrangement.

Contact us

If you’d like to talk to us, please call our Compensation Recovery line.