Compensation Claims and Medicare Refunds

In compensation claims, Medicare is entitled to a refund of the expenses it pays in relation to a claimant’s injuries. This applies to all types of compensation claims, even if a claimant is injured overseas, so long as the expenses paid are in relation to the injuries sustained. This includes, for example, motor vehicle accident, workers compensation, public liability and medical negligence claims. There is federal legislation setting out Medicare’s entitlement. The principle behind such refunds is to prevent situations where claimants receive double compensation. If a claimant is receiving compensation from an insurance company or other defendant as part of their claim, they are not permitted to also receive the benefit of Medicare payments that overlap with the compensation for their injuries.

Medicare issues a Claims History Statement which sets out all of the services it has funded. The claimant is required to indicate, on the Statement, which services are related to their injuries, and to sign an accompanying declaration.

Once the completed Statement is returned to Medicare, it is required to provide a Notice of Charge indicating the total refund amount.

Since about mid-2020, we have seen significant delays in the provision of the Statements and the subsequent issuing of Notices of Charge.

What if there are delays in issuing a ‘Notice of Charge’ in Compensation Claims in NSW?

If a valid Notice of Charge is not available at the time of finalisation of the claimant’s claim, Medicare receives 10% of the claimant’s compensation. Once a Notice of Charge becomes available, Medicare refunds the balance of the 10% back to the claimant. This is often a significant sum of upwards of tens of thousands of dollars.

If Medicare fails to provide a Notice of Charge within 3 months of receiving notice of the finalisation of the claim, the claimant is entitled to a full refund of the 10% plus interest.

Medicare Delays in Compensation Claims

What we are seeing is that delays are spanning upwards of 6 months, with many claimants not having received any refunds from Medicare in that timeframe and Medicare not providing any indication at all of when the refunds will be paid. When attempts are made to follow up, Medicare refuses to provide updates. When phone calls are made to Medicare, for example, there are reports of an automated message indicating to enquirers that they need not bother to follow up because no responses will be forthcoming.

Various lobby groups of personal injury lawyers have made several complaints directly to the Director of Medicare Compensation Recovery within Services Australia. Given that claimants are often experiencing severe financial difficulties, lawyers are pleading for an adequate resolution to this problem. When such significant sums are withheld from claimants, it can have a devastating impact on their already difficult situation.

Overall, we have not yet seen any significant improvements.

Further information relating to Medicare Compensation Recovery can be found by clicking on this link:

https://www.servicesaustralia.gov.au/individuals/services/medicare/medicare-compensation-recovery