Notice of judgment or settlement (NOJS) - Medicare Compensation Recovery 011-15040100

A NOJS advises Services Australia that a decision has been reached about a compensation claim for an amount greater than $5,000 fixed under:

• Settlement (including legal expenses)
• Judgment (not including legal expenses)

Under section 22 of the Health and Other Services (Compensation) Act 1995 (HOSC Act) the notifiable person has an obligation to advise the injured person of a potential debt liability. This must occur in writing before settlement can happen. Question 2 on the Notice of Judgment or Settlement (MO022) form requests that the notifiable person confirm that the injured person has been advised in writing of the potential debt liability. The notifiable person may provide supporting evidence of the notification in writing to the agency; however, this is not compulsory.

Under section 23 of the HOSC Act a compensation payer or their representative must tell the agency of Settlement or judgment within 28 days from the date the compensation was fixed. The agency needs the notification to be made on an MO022 form.

The agency is required to recover the eligible Medicare benefits and residential care costs, once a judgment or settlement has been reached for the compensated injury or illness.

See:

• the Terminology used in Medicare Compensation Recovery tables for definitions of Judgment and Settlement
• Notifiable and not notifiable claims - Medicare Compensation Recovery
• Payments, refunds and debts - Medicare Compensation Recovery

The Resources page contains a link to the MO022 form.

Under section 29(3) of the Health and Other Services (Compensation) Act 1995 (HOSC Act), if a valid notification of judgment or settlement is not received by the agency within 28 days from the date the compensation amount was fixed, the compensation payer is liable to repay any debts in respect to the compensation claim.

Services Australia will issue a 'Compensation payer has not complied with legislated notice requirements' (Z2809) letter. Any payment made will be treated as an ad-hoc payment and will be applied to the Notice of charge (NOC).

The References page contains links to legislation.

Under the Social Security Act 1991 (SS Act) an insurer or compensation payer may need to wait for a Centrelink clearance before releasing a compensation payment to the person. An advance payment (AP) can still be made to the agency without committing an offence under the SS Act, or the compensation payer may wait for a Notice of charge (NOC). However, a valid NOJS must be submitted to the agency within 28 days (under section 23(2) of the Health and Other Services (Compensation) Act 1995.

The References page contains links to legislation.

A valid notification of judgment or settlement must include certain information provided in:

• a completed Medicare Compensation Recovery Notice of Judgment or Settlement (MO022) form, or
• a partially completed MO022 form, plus official supporting documents such as:
• Consent judgment
• Deed of release/discharge
• Terms of settlement
• Complying agreement
• Court order or judgment
• Certificate of determination

See Document Assessment - Medicare Compensation Recovery for details about mandatory information required in a valid NOJS.

Note: the MO022 form includes additional fields. For example, Question 35 'Is any amount payable to Centrelink?' is not a mandatory field in MCRS or on the form.

The Resources page contains a link to the MO022 form.

• Services Australia is required to recover the total amount of Medicare benefits, nursing home benefits, residential care subsidies and home care subsidies (care costs) paid in the course of treatment of, or as a result of the compensated injury or illness
• The agency only recovers those benefits and subsidies paid between the date of injury or illness and the date the amount of compensation was fixed
• If the amount of compensation awarded has been reduced, as a result of contributory negligence, the amount of recovery is reduced by the percentage of the contributory negligence. See Apportionment of liability for Medicare Compensation Recovery
• Past expenses fixed by a judgment that specifies an amount for medical care, nursing home care, residential care or home care already incurred. The expenses are subject to the specific terms of the judgment and the amount established through the Notice to claimant (NTC) process. See Judgment fixes the amount of past expenses
• An amount up to, but not exceeding, the total amount of compensation fixed under a judgment or settlement, less any amounts payable under Part 3.14 of the Social Security Act 1991. For Medicare Compensation Recovery the amount payable under Part 3.14 of the Social Security Act 1991 is referred to as the amount payable to Centrelink

The References page contains links to legislation.

Apportionment of liability due to contributory negligence is a formal agreement or finding that reduces the amount of compensation that would otherwise be payable. Where apportionment of liability applies, the total amount recoverable by Services Australia is reduced by the proportion of liability attributed to the injured person as indicated in the judgment or settlement documents if:

• the judgment or settlement fixes the amount of compensation on the basis that liability for the injury has been apportioned between the injured person and compensation payer, and
• as a result, the amount of compensation is less than it would have been if liability had not been apportioned

Evidence of liability

The agency must be satisfied that settlement has been fixed on the basis that the original amount of compensation has been reduced due to an apportionment of liability.

The Medicare Compensation Recovery Notice of Judgment or Settlement (MO022) form or settlement documents must include the percentage of apportionment attributed to the injured person.

Acceptable documents to support an apportionment, if not provided on the MO022 are a:

• judgment or court order
• consent order
• terms of settlement
• deed of release or discharge

Reducing the amount owed

When the amount of compensation is reduced because an apportionment of liability has been applied for contributory negligence, the amount owed to the agency is reduced by the proportion of liability attributed to the injured person. For example, if the amount owed to the agency on a Notice of charge (NOC) is $1,000 but 20% liability has been apportioned to the injured person in the claim, the recoverable amount is reduced by 20%, this will result in a reduced recoverable amount of $800

When the NOC is issued, the reduced recovery amount is automatically calculated in MCRS. The NOC will show the apportioned reduction. A NOC may be amended if a request is made and supporting documents are provided showing an apportionment of liability settlement

Service Officers must check all provided documents when assessing an apportionment of liability to confirm it is a genuine apportionment. The notifiable person or their representative may report a Whole Person Impairment (WPI) determination as an apportionment in error. WPI is a component of worker’s compensation claims and is a percentage rating calculation of permanent damage caused by an injury/illness and is based on the proportionate loss or proportionate loss of use, of a body part or function

Apportionment of liability refers to the degree of fault that contributes to an act or loss. If supporting documents are not provided, contact a Program Support Officer for advice.

See Notice of past benefits (NOPB) and Notice of charge (NOC) - Medicare Compensation Recovery.

When the 'amount of past medical expenses' and/or the 'amount of past nursing home, residential care or home care expenses' are fixed by a court at the time of judgment, this could mean either the:

• total amount of medical and/or care costs has been established by the courts, and the Notice of charge (NOC) cannot exceed this amount, or
• Medicare and/or care costs recovery amount has been determined by the courts, and this is the amount the agency must recover

A judgment may deal differently with the medical and care costs. Each cost may have a recoverable amount set or effectively capped by the judgment independently of the other. If one, or both, has not had the recoverable amount determined by the courts, a Notice to claimant (NTC) must be issued to establish the recoverable amount.

It must be determined if the fixed costs are the maximum allowable, or the actual Medicare recovery amount requires an interpretation of the judgment. While not always applicable, wording in the judgment may be:

• direct and specify the amount recoverable by Medicare, or it may refer to the Medicare expenses
• more general and refer to the Medical and or care expenses amount. This indicates it is the maximum recoverable amount. In these cases, the amount listed on the NOC cannot exceed this amount. If the agency has not yet established the recoverable amount, an NTC must be issued to determine the NOC

If the judgment is unclear whether it is inclusive of fixed amounts for Medical or Medicare, escalate the matter to Program Management.

See:

• the Resources page for a link to Contacts
• Notice of past benefits (NOPB) and Notice of charge (NOC) for details about a NOC

Like Medicare, Centrelink may recover benefits paid when compensation is awarded to a customer. Centrelink has priority in recovery.

The agency cannot recover more than the total fixed compensation amount. Therefore, the maximum amount available for Medicare to recover is the total amount of compensation less the amount payable to Centrelink.

The Notice of Judgment or Settlement (NOJS) (MO022) form and capture screen in MCRS contains a question/field to record the amount recoverable by Centrelink. However this is a non-compulsory field. It is recognised that this information is not generally available at settlement, so is not required on the form.

Medicare Compensation Recovery has no role in recovering the amount payable to Centrelink.

If a notifiable person contacts the agency regarding the Centrelink amount, advise them not to delay in submitting the MO022 form whilst waiting on Centrelink information.

If notification is received about a Centrelink recovery amount that will impact the agency's ability to collect the full Medicare recovery see Table 6 in Extensions, decisions and reviews - Medicare Compensation Recovery

See Notice of past benefits (NOPB) and Notice of charge (NOC) - Medicare Compensation Recovery for details about a NOC.

When a judgment or settlement has been reached, a NOPB that was valid at the time, becomes the NOC.

To be valid at the time of judgment or settlement, the NOPB must be issued within the 6 months prior to the date of judgment or settlement.

A valid NOPB at the time of judgment or settlement will not change unless:

• apportionment applies to the settlement
• there is a fixed amount under judgment
• the Centrelink recovery amount reduces the available amount for recovery, or
• it exceeds the total amount of compensation awarded at judgment of settlement

See:

• Notice of past benefits (NOPB) and Notice of charge (NOC) - Medicare Compensation Recovery for information about a NOC
• Statement by claimant (SBC) and care costs - Medicare Compensation Recovery

The References page contains links to legislation.

Where there is no valid NOPB on the date of judgment or settlement, the agency has a maximum of 3 months from notification of judgment or settlement to issue a Notice of charge (NOC) to:

• the injured person, if the compensation payer has made a valid advance payment (AP) to the agency, or
• the compensation payer

Where a valid advance payment (AP) has been made, the 3 month time limit is from the date of the notification of judgment or settlement or the date of receipt of valid AP money, whichever is the later. The 3 month time limit may be extended by granting an extension of time to lodge the Statement by claimant (SBC) or by issuing a 'Statement not substantially correct' (Z2805) letter for an incomplete statement.

Where an ad-hoc payment (including failed advance payments) has been made, the 3 month time limit cannot be extended.

When processing the NOJS, if there is no valid NOPB, MCRS displays the Notice to claimant capture screen so a new Notice to claimant (NTC) can be issued. If an SBC has been returned before processing the NOJS, this can be reprocessed through the Notice of judgment or settlement review screen to produce the NOC.

See:

• Notice of past benefits (NOPB) and Notice of charge (NOC) - Medicare Compensation Recovery for details about a NOC, including situations where the 3 month time limit may be extended
• Payments, refunds and debts - Medicare Compensation Recovery for details about AP

A claimant or injured person may complete an MO023 if they:

• have not received benefits or subsidies for medical or residential/home care costs related to the injury or illness, or
• have not received any further benefits or subsidies for related services since the date of the expired Notice of past benefits (NOPB)

The MO023 may be signed up to 28 days before the Date of judgment or settlement (DOJS), or any date after the DOJS.

If an MO023 is accepted, it extends the previous expired Notice of past benefits (NOPB) and issues a Notice of charge (NOC) for that amount. If there is no previous NOPB, the claim closes on a $NIL NOC.

A completed MO023 form:

• is at the agency’s discretion to accept, and
• does not automatically extend the NOPB until the agency has formally accepted the statement

The acceptance or refusal of the MO023 does not impact the agency recovery timeframes under S24(4) or 33D of the Health and Other Services (Compensation) Act 1995.

The References page contains links to legislation and the MO023 form.

The agency does not pay interest if there has been a delay in processing an advance payment (AP).

Section 33M of the Health and Other Services Compensation Act 1995 does not require the agency to pay interest. However, an injured person/claimant may submit a written request providing another law that requires the agency to do so.

The References page contains links to legislation.

If the total amount payable/refundable exceeds the $50,000 threshold, an accredited quality checker must review the Notice of charge (NOC).

See Quality checking - Medicare Compensation Recovery for details about the review process.

The Process page contains information about actioning corrections.

Some claims must be reopened to:

• correct an error or add more funds received after the claim closed
• process an amended Statement by the claimant
• process amendments to the NOJS

When a NOJS reveals a change to the date of injury on a claim, Service Officers will have the option of:

• issuing a new Notice to claimant (NOC), or
• close the claim using an existing Notice of Past Benefit (NOPB)

The ability to close a claim in this way may:

• reduce unnecessary and potentially distressing paperwork for customers
• increase efficiency, and
• support timely processing of claims

See:

• Close, terminate, or reopen a claim - Medicare Compensation Recovery
• Extensions, decisions and reviews - Medicare Compensation Recovery for details about amendments
• Escalations - Medicare Compensation Recovery for details about referring a case to the appropriate delegate for approval before actioning the amendment