July 2002

Deborah Green’s LEGAL Q&A

Q I don’t accept Medicare assignment, but I recently received a check from Medicare for a patient I treated. The patient still owes me for this visit. Can I advise the patient of the direct payment by Medicare and just keep the check?

A Overpayments and improper payments may occur under a number of circumstances. For instance, you may be paid, although a patient is not entitled to Medicare coverage; the deductible or co-insurance may be handled improperly; or a clerical or computer error may occur. These overpayments should always be returned/repaid.

In the situation you have described, I would recommend you do not keep the check (even with your patient’s permission), and do not hand the check over to the patient. Return the check to the Medicare carrier, along with a letter explaining the circumstances. You should do the same thing if you receive an overpayment from a private, third-party payor. “Finders, keepers, losers, weepers” worked okay when we were kids; today it could result in a federal investigation of you and your practice.

Q As a result of an illness, I was unable to practice for a period of time and incurred a great deal of debt. The only way I can pay off this debt is by continuing to practice, but my creditors have been badgering me for payment. Two of them have already filed suit against me. I want to repay everybody, but I feel like I’m drowning. It’s gotten to the point where I’m afraid to answer the telephone, because I’m worried it’s going to be another creditor. Any suggestions?

A It sounds like your practice may be a candidate for a Chapter 11 bankruptcy filing. By filing for bankruptcy under Chapter 11, you will be given some breathing room to continue running your business without creditors breathing down your neck. Under Chapter 11 guidelines, you are permitted to carry on your business under the supervision of the bankruptcy court while a reorganization plan is worked out. No creditor is permitted to badger you; in fact, if they do, they may be subject to penalties. In addition, the two lawsuits pending against you will also be “stayed” while you are in Chapter 11.

Since it is in your creditors’ interest to make sure your practice remains afloat, they will often take a percentage of the amount owed to them in full satisfaction of your debt. It is also quite possible any debt to unsecured creditors may be totally eliminated.

Be sure you hire a competent bankruptcy attorney. Like health-care law, bankruptcy is a highly specialized field. Do not succumb to attorney ads that promise you a cut-rate bankruptcy for $499. Those are generally Chapter 7 bankruptcies that apply to individuals, not to businesses. Make sure the attorney you retain is experienced in Chapter 11 filings. You may want to call your state bar association for this type of referral.

Ms. Green has been a practicing attorney since 1977. She is admitted to the practice of law in New York and Florida.

LEGAL DISCLAIMER
This column is governed expressly by the terms of this disclaimer and provided for educational purposes only. The accuracy of the information is not warranted, nor is it intended to be advice as to a specific fact pattern. The information contained herein is not presented as legal advice with respect to any matter, and no attorney-client relationship is hereby established.