Medicare Compensation Recovery information for insurers and other payers

About a compensation payment

Compensation is money awarded for an injury or illness. It can be a payment from an insurance company, an individual or another company.

What it applies to

When an injured person is awarded a compensation payment this can include related medical costs. Benefits or subsidies related to the injury or illness may need to be repaid.

The recoverable eligible benefits apply to an:

• eligible benefit payment provided through Australian Government programs
• awarded compensation payment where another party is liable for the relating treatment or care costs.

You may need to repay:

• Medicare benefits
• nursing home benefits
• residential care subsidies
• home care subsidies.

How it applies to you

You need to tell us about an awarded compensation claim if you’re:

• a notifiable person
• an insurance company
• a compensation payer
• a representative/administrator or agent for any of the above.

For information for the injured person read Medicare Compensation Recovery.

When you don’t need to tell us

You don’t need to tell us if the compensation payment is for any of the following:

• the payment received is classified as compensation for criminal injuries
• the total amount of compensation awarded including all costs is less than $5,000
• the reimbursement arrangement date is less than 6 months from the date the claim was made
• you’re not insured and don’t need to be at the time the injury occurs.

For information about recovery of future care costs for the compensable injury or illness email compensation.enquiries.acc@health.gov.au.

What to tell us at judgment or settlement

The compensation payer, usually the insurer, must tell us about the compensation payment, within 28 days from when either a:

• judgment fixes the value of compensation awarded at more than $5,000, excluding costs
• settlement fixes the value of compensation awarded at more than $5,000, including all costs
• reimbursement arrangement is made more than 6 months from the date the claim was made and doesn’t include payments where there has been a fixed amount awarded for damages exceeding $5,000. Any payments that are $5,000 or more are to be notified under a judgment or settlement.

Use the date you filed with a court as the date of settlement or the date the arrangement was made.

You need to tell us if at the time the injury occurred you either:

• didn’t have insurance and needed to be insured
• had insurance and a claim was made against you.

If you don’t tell us, you may be liable for any outstanding amount owed to the Commonwealth.

If you haven’t complied with your obligations we’ll send you a notice. We may also:

• return any excess funds to the injured person
• recover any amounts owing from you.

How to tell us about a judgment or settlement

Compensation payers or insurers can tell us an amount of compensation has been awarded by completing either a:

• Notice of Judgment or Settlement form, or
• Notice of reimbursement arrangement form.

Remember to:

• provide all relevant requested information on the form
• make sure you sign and date the form
• return the form to us within 28 days from the date the judgment, settlement or reimbursement arrangement was made.

You must not release the compensation payment to the injured person or claimant until you’ve paid us. You can make an advanced payment or pay the Notice of charge.

If you haven’t complied with your obligations we’ll send you a notice. We may also:

• return any excess funds to the injured person
• recover any amounts owing from you.

How to make an advance payment

You can choose to make an advance payment under a judgment or settlement when:

• you’ve notified the injured person in writing prior to judgment or settlement, about your intention to make an advance payment, and that they may be liable for any residual amounts not covered by the advance payment
• you’ve notified us in writing of your intention to make an advance payment within 28 days of the date of judgment or settlement
• the advance payment equals 10% of the total fixed compensation amount and was received by us within 28 days of the date of judgment or settlement.

Once you have met the obligations of an advance payment you can release the remaining funds to the claimant.

If you haven’t complied with your obligations we’ll send you a notice. We may also:

• return any excess funds to the injured person
• recover any amounts owing from you.

What is a Notice of past benefits

The Notice of past benefits contains a summary of the recoverable eligible benefit amounts relating to the injured person’s compensation claim. The notice is valid for a period of 6 months from the date of issue.

You, the injured person or claimant, can request a Notice of past benefits. If you do, we’ll send a notice with a Medicare history, care services statement and Declaration.

Statements

The Medicare history statement lists each service the injured person or claimant has received as a Medicare benefit. The care services statement is for the injured person or claimant to tell us if care services, including nursing home, residential and home care services, were provided 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 any care services 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 calculate the total amount of eligible benefits paid. We then give 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 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.

The difference between a Notice of past benefits and Notice of charge

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.

A Notice of charge is a notice after either a:

• judgment or settlement for the compensation claim occurs
• reimbursement arrangement is entered into within 6 months of the notice being issued.

We issue a Notice of charge to either:

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

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 attributed to the injured person.

Making payments to us and the injured person or claimant

It’s an offence to pay the injured person or claimant any part of the compensation awarded unless the following applies, you’ve:

• sent us a complete notification of judgment or settlement
• paid us the amount specified in the Notice of charge
• paid us a valid advance payment.

When a Notice of past benefits becomes a Notice of charge, the amount of past benefits is known. You must pay us the amount specified within 28 days of either the date of:

• judgment or settlement
• reimbursement arrangement.

You may choose not to get a Notice of past benefits within the 6 months before the judgment or settlement date. In this case, at the time of notification you may either:

• request a Notice of charge and pay us the amount specified within 28 days from the issue date
• pay a 10% advance of the total compensation amount awarded within 28 days from the date of judgment or settlement.

You can then pay the balance of the compensation to the injured person.

We cannot accept payments made through foreign currency. Payments to us must be made in Australian currency.

If the amount owing is less than the advance payment, we’ll refund the balance to the injured person within 28 days. If the amount owing is more, the injured person needs to pay the difference to us within 28 days.

You cannot make an advance payment if there is a valid Notice of past benefits.

If you haven’t complied with your obligations for an advance payment, we may recover any amounts owing from you. We may also return any excess funds to the injured person.

You may choose not to get a Notice of past benefits within the 6 months before the reimbursement arrangement is made. If so, request a Notice of charge and pay us the amount specified. The payment needs to be within 28 days from the date of issue.

Multiple compensation payers

When there are multiple compensation payers, it is your joint responsibility to pay the charge by the due date. We won’t provide separate notices for a charge.

Formal reviews

If you don’t understand or agree with a decision we’ve made, you can apply for a formal review. To request a formal review, you must write to us within 28 days from the date of the letter. We’ll send you a letter with the outcome.

Request an Administrative Review Tribunal (ART) review

If you don’t agree with the formal review outcome, you can ask the ART to review our decision.

You’ll need to include the letter that we send you with the outcome of our formal review. The ART can only review a decision that we’ve formally reviewed.

To request an ART review write to them at:

The ART provides independent reviews of government decisions. You can read more about the ART on the Administrative Review Tribunal website.

What legislation applies

We have legislation about compensation for people that get Medicare or Centrelink payments from us.

For more information read:

• Health and Other Services (Compensation) Act 1995
• Social Security Act 1991 - Section 17, Part 3.14: Compensation Recovery
• Freedom of Information Act 1982
• Child Support (Registration and Collection) Act 1988.

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.

Centrelink Compensation Recovery

We recover Centrelink payments differently to Medicare payments.

If the injured person receives a Centrelink payment, a compensation payment could affect the amount they’re entitled to. You may need to repay all past payments.

You also have to tell us about the compensation payment, no matter what the amount.

Read about Centrelink Compensation Recovery.

Centrelink clearance

You may need to wait for Centrelink clearance before making the compensation payment to the injured person.

You don’t need to wait for Centrelink clearance before either:

• paying us the 10% advance payment and submitting the Notice of Judgment or Settlement form, or
• submitting the Notice of Judgment or Settlement form to request a Notice of charge if you choose not to make an advance payment.

Child Support Program

Release of money

Section 72A of the Child Support (Registration and Collection) Act 1988, allows the Child Support Program to issue a notice to the agency for the garnishee of money being held on behalf of the injured person.

Release of information

Section 120 of the Child Support (Registration and Collection) Act 1988, allows the Child Support Program to request details in respect of an injured person or claimant from Services Australia.

Compensation forms list

You may need these forms for Medicare Compensation Recovery:

• Medicare Compensation Recovery Notice of judgment or settlement form
• Medicare Compensation Recovery Compensation payer’s Electronic Funds Transfer details collection form
• Medicare Compensation Recovery Medicare history statement request form
• Medicare Compensation Recovery Notice of reimbursement arrangement form.

Contact us if you need more information about Medicare Compensation Recovery.