Less than its letter says — usually. Federal law makes Medicare share your attorney fees proportionately, a $750 threshold can eliminate small recoveries entirely, and a flat-25% option can beat the formula on settlements up to $10,000. Every rule below is cited; the calculator runs the actual §411.37 arithmetic.
Rules verified August 24, 2026 against CMS and the CFR · verification policy · changelogThe §411.37 formula: Medicare reduces its recovery by its proportionate share of your attorney fees and costs. Educational estimate — your BCRC demand letter controls, and waiver or compromise can reduce it further.
Medicare pays your accident treatment only conditionally: federal law (42 U.S.C. §1395y(b)(2)) requires repayment once a liability settlement makes someone else primary. But the same regulations force Medicare to bear its share of what it cost you to win the money: under 42 CFR §411.37, its recovery is cut by the procurement-cost ratio — your fees and costs as a share of the settlement. That reduction is automatic; the traps are elsewhere.
CMS's own published options, all verified against current CMS documents: physical-trauma liability settlements of $750 or less aren't pursued at all (2026 threshold); settlements of $10,000 or less can elect a flat 25% before the demand issues (note: most sites still say $5,000 — CMS raised the cap in 2023); and expected settlements of $25,000 or less with treatment finished can use the self-calculated conditional payment option for a fast final number.
The conditional-payment letter is a claims dump, and it routinely includes treatment unrelated to your injury — disputing unrelated charges is the most reliable reduction after §411.37. Beyond that, the statute itself authorizes waiver where recovery would "defeat the purposes" of the Act or be "against equity and good conscience" (42 U.S.C. §1395gg(c)) — real relief in hardship cases, requested after the demand letter.
Pay the demand within its deadline or interest accrues from the demand date in 30-day increments, with Treasury collection referral for stale debts (CMS recovery process). And if your coverage is a Medicare Advantage plan, don't assume the rules are softer: MA plans enforce the same recovery rights and can sue for double damages. On Medicaid instead of Medicare? The rules differ sharply — see the medical liens guide.
Medicare recovers its conditional payments reduced by its proportionate share of your attorney fees and costs (42 CFR §411.37). Example: $14,000 in Medicare payments, a $60,000 settlement with $21,500 in fees and costs (35.8%) → Medicare's demand is about $8,985, not $14,000. If Medicare paid more than your whole settlement, its recovery is capped at the settlement minus your fees and costs. The calculator on this page runs your numbers.
No — repayment is federal law (42 U.S.C. §1395y(b)(2)), the government can collect from you, your attorney, or the insurer, interest starts accruing from the demand letter with Treasury referral for unpaid debts, and Medicare Advantage plans can even sue for double damages (Humana v. Western Heritage). Build the repayment into your take-home math from day one.
Four legitimate paths: the §411.37 fee reduction happens automatically; dispute unrelated charges on the conditional-payment letter (Medicare's list often includes treatment unrelated to your injury); request a waiver under 42 U.S.C. §1395gg(c) if repayment would defeat the statute's purpose or be against equity and good conscience; or seek a compromise under the Federal Claims Collection Act. Small settlements have shortcuts — the $750 threshold and the 25% fixed option.
Report the claim to the BCRC (Benefits Coordination & Recovery Center) → receive a Rights and Responsibilities letter → receive a Conditional Payment Letter listing what Medicare paid → dispute unrelated charges → report the settlement (date, amount, fees, costs) → receive the final demand → pay within the demand letter's deadline or interest accrues in 30-day increments. Start the BCRC contact early — the conditional-payment letter takes time.