[Code of Federal Regulations]
[Title 42, Volume 2]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR411.37]

[Page 312-313]
 
                         TITLE 42--PUBLIC HEALTH
 
                             HUMAN SERVICES
 
PART 411--EXCLUSIONS FROM MEDICARE AND LIMITATIONS ON MEDICARE PAYMENT--Table of Contents
 
  Subpart B--Insurance Coverage That Limits Medicare Payment: General 
                               Provisions
 
Sec. 411.37  Amount of Medicare recovery when a third party payment is made as a result of a judgment or settlement.

    (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

[[Page 313]]

    (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 third party payer. If CMS seeks recovery 
from the third party payer, in accordance with Sec. 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.