42 C.F.R. § 411.37

Amount of Medicare recovery when a primary payment is made as a result of a judgment or settlement

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(a) Recovery against the party that received payment—(1) General rule. Medicare reduces its recovery to take account of the cost of procuring the judgment or settlement, as provided in this section, if—

(i) Procurement costs are incurred because the claim is disputed; and

(ii) Those costs are borne by the party against which CMS seeks to recover.

(2) Special rule. If CMS must file suit because the party that received payment opposes CMS's recovery, the recovery amount is as set forth in paragraph (e) of this section.

(b) Recovery against the primary payer. If CMS seeks recovery from the primary payer, in accordance with § 411.24(i), the recovery amount will be no greater than the amount determined under paragraph (c) or (d) or (e) of this section.

(c) Medicare payments are less than the judgment or settlement amount. If Medicare payments are less than the judgment or settlement amount, the recovery is computed as follows:

(1) Determine the ratio of the procurement costs to the total judgment or settlement payment.

(2) Apply the ratio to the Medicare payment. The product is the Medicare share of procurement costs.

(3) Subtract the Medicare share of procurement costs from the Medicare payments. The remainder is the Medicare recovery amount.

(d) Medicare payments equal or exceed the judgment or settlement amount. If Medicare payments equal or exceed the judgment or settlement amount, the recovery amount is the total judgment or settlement payment minus the total procurement costs.

(e) CMS incurs procurement costs because of opposition to its recovery. If CMS must bring suit against the party that received payment because that party opposes CMS's recovery, the recovery amount is the lower of the following:

(1) Medicare payment.

(2) The total judgment or settlement amount, minus the party's total procurement cost.

Notes of Decisions

Cited in 33 cases (1 in the last 5 years), 1993–2025 · leading case: Humana Med. Plan, Inc. v. W. Heritage Ins. Co., 832 F.3d 1229 (11th Cir. 2016).

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Humana Med. Plan, Inc. v. W. Heritage Ins. Co., 832 F.3d 1229 (11th Cir. 2016). · cites it 2× “See 42 C.F.R. §§ 411.37 (e), 422.108(f). This is the third lawsuit in which Humana has attempted to recover its $19,155.”

Stayton v. Delaware Health Corp., 117 A.3d 521 (Del. 2015). · cites it 4× “at § 1395y(b)(2)(B)(iii); 42 C.F.R. § 411.37 (c) (“If Medicare payments are less than the judgment or settlement amount, the recovery is computed as follows: (1) Determine the ratio of the procurement costs to the total judgment or settlement payment.”

Lagerstrom v. Myrtle Werth Hosp.-Mayo Health Sys., 2005 WI 124 (Wis. 2005). · cites it 4× “42 CFR § 411.37 (a). ¶ 114. "In the case of liability insurance settlements .”

Bradley v. Sebelius, 621 F.3d 1330 (11th Cir. 2010). · cites it 4× “§ 1395y(b)(2)(B)(ii), and its attendant regulations, 42 C.F.R. § 411.37 (c), the Secretary had the authority to claim the total amount of medical expenses, $38,875.”

In Re Zyprexa Prods. Liab. Litig., 451 F. Supp. 2d 458 (E.D.N.Y 2006). · cites it 4× “” 42 C.F.R. § 411.37 (a). If the Medicare lien is less than the amount of the settlement, the reduction for attorneys’ fees and expenses is equal to the ratio of the attorneys’ fees and expenses to the total recovery.”

Cochran v. U.S. Health Care Fin. Admin., 291 F.3d 775 (11th Cir. 2002). · cites it 2× “42 C.F.R. § 411.37 (2002). Those same regulations also provide that, when Medicare is reimbursed out of a judgment or settlement, the amount of money it takes is reduced by a pro-rata share of the “procurement costs,” which include attorney’s fees of the judgment or settlement.”

Netro v. Greater Balt. Med. Ctr., Inc., 891 F.3d 522 (4th Cir. 2018). · cites it 2× “3 For the first time, at oral argument, the Estate contended that had the Hospital paid the Estate or reimbursed the government, the Estate would have been entitled to be reimbursed for procurement costs under 42 C.F.R. § 411.37 for prosecuting the tort suit against the Hospital.”

United States v. Baxter Int'l, Inc., 345 F.3d 866 (11th Cir. 2003). “See 42 C.F.R. § 411.37 (providing that Medicare will deduct from its recovery a pro rata share of attorney fees and other “procurement expenses” incurred to secure a judgment or settlement).”

Hadden v. United States, 661 F.3d 298 (6th Cir. 2011). · cites it 2× “After subtracting a portion of the attorneys' fees that Hadden himself had paid to obtain the settlement, see 42 C.F.R. § 411.37 , Medicare determined that Hadden owed it $62,338.”

Einhorn v. CarePlus Health Plans, Inc., 43 F. Supp. 3d 1329 (S.D. Fla. 2014). · cites it 2× “108 (d); 42 C.F.R. § 411.37 “The way the system is set up the beneficiary gets the health care she needs, but Medicare is entitled to reimbursement if and when the primary payer pays her.”

State v. Peters, 946 A.2d 1231 (Conn. 2008). “See 42 C.F.R. § 411.37 (a) (1) (2006) (“[m]edicare reduces its recovery to take account of the cost of procuring the judgment or settlement .”

Brennan v. Burger King Corp., 698 A.2d 364 (Conn. App. Ct. 1997). · cites it 7× “Instead, the defendant argued that it is entitled to a reduction in the verdict under § 52-225a for the portion that Medicare paid as a collateral source that it is not entitled to recover from the plaintiff under 42 C.F.R. § 411.37 (c). The defendant argued that under 42 C.”

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