Maryland Law Firm Kandel & Associates, P.A., Agrees to Pay the United States Nearly $40,000 to Settle Claims That It Did Not Reimburse Medicare for Payments Made on Behalf of Firm Clients

Baltimore, Maryland – Erek L. Barron, United States Attorney for the District of Maryland, announced today that Kandel & Associates, P.A., a Baltimore-based law firm, and Nelson R. Kandel, Esq., have entered into a settlement agreement with the United States to resolve allegations that they failed to reimburse the United States for certain Medicare payments the Government had previously made to medical providers on behalf of firm clients.

The Government’s investigation arose under the Medicare Secondary Payer (“MSP”) provisions of the Social Security Act, which authorizes Medicare, as a secondary payer, to make conditional payments for medical items or services under certain circumstances.  When an injured person receives a tort settlement or judgment, Medicare law requires persons or entities who receive the settlement or judgment proceeds, including the injured person’s attorney, to repay Medicare for its conditional payments.  If Medicare does not receive timely repayment, these same laws and regulations permit the Government to recover the conditional payments from the injured person’s attorney and others who received the settlement or judgment proceeds.

The Government alleges that, over many years, Medicare made conditional payments to healthcare providers to satisfy medical bills for firm clients.  During that period, the firm negotiated for and received settlement proceeds for the firm’s clients, but neither the firm nor its clients repaid Medicare for conditional payments it made to medical providers.  This settlement resolves the Government’s claims that the firm and Mr. Kandel failed to resolve at least twelve MSP debts.  The Government alleges that the firm disbursed settlement proceeds to clients without confirming the existence of an MSP debt.  Under the terms of the settlement agreement, the firm and Mr. Kandel agreed to pay the United States $39,828.66 to resolve the Government’s claims. 

The firm and Mr. Kandel also agreed to designate a person at the firm responsible for paying MSP debts; train the designated employee to ensure that the firm pays MSP debts on a timely basis; and periodically review any outstanding MSP debts with the designated employee to ensure compliance. 

The claims resolved by this settlement are allegations.  The settlement is not an admission of liability by the firm or Mr. Kandel, nor a concession by the United States that its claims are not well founded.

This settlement should remind attorneys of their obligation to reimburse Medicare for conditional payments after receiving settlement or judgment proceeds for their clients.  The attorneys’ obligation to reimburse Medicare for conditional payments exists regardless of whether they disburse settlement proceeds to their clients before the Centers for Medicare & Medicaid Services contacts them about the existence of an MSP debt.  When attorneys receive settlement funds in personal injury cases, they have an independent obligation to confirm whether their clients received conditional payments from Medicare. 

“Plaintiffs’ attorneys cannot simply rely on their clients’ representations about their status as Medicare beneficiaries and ignore their obligations to reimburse Medicare for its conditional payments,” said U.S. Attorney Erek L. Barron.  “This is the third matter our office has resolved with attorneys who fail to make good on their obligations to repay Medicare for its conditional payments, and we will continue to investigate these matters, regardless of when settlement distributions are made, and regardless of what clients tell their attorneys regarding their status as Medicare beneficiaries.”

U.S. Attorney Erek L. Barron commended Eric Wolfish, Assistant Regional Counsel, United States Department of Health and Human Services, Office of the General Counsel, Region III, for his work in the investigation.  Mr. Barron also thanked Assistant United States Attorney Alan C. Lazerow, who handled the case.

For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit https://www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.

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