Subject Matter: MMSEA SEC 111 - Settlements
Hmmmâ€¦.a very interesting note below regarding a Dec 2009 case based on 2003 settlement.
I attach for your information a recent lawsuit filed by the U.S. Department of Justice on behalf of the Secretary of Health and Human Services. The claim is to recover conditional payments under the Medicare Secondary Payer Act (42 USC Â§1395y(b)(2)) from a liability claims settlement that took place back in 2003. The attached complaint includes the release agreement of the underlying action as Exhibit 1.
This lawsuit is the first one that I am aware of that includes as defendants the insurance carriers that contributed to the underlying settlement. The allegation of the
It is precisely this type of lawsuit that will cause insurance carriers and self insureds to be careful in how they distribute funds when resolving a case. Prior to this lawsuit being filed, it was unclear whether Medicare would file such actions. Now we know the answer. To avoid this exposure, the insurance carrier and self insured will have limited options to avoid this exposure. One way is to put Medicare on the settlement check, but there must be agreement of the parties ahead of time in order to enforce it. Short of that, it appears that the insurance carrier and self insured will need to know the conditional payment amount and pay it out of the settlement proceeds, with the balance going to the Medicare beneficiary. However, that process can only be effectuated if the settlement agreement is properly negotiated before arriving at the settlement amount.
Another important point about this lawsuit is that the plaintiff attorneys in the underlying settlement are also named defendants. This is helpful as it will allow us to impress with the plaintiffâ€™s bar why we need cooperation to manage the Medicare Secondary Payer issues.
I will monitor this action as it progresses as I am interested in how the statute of limitations may apply.
This case serves as a reminder of why we need to work together to bring thoughtful change to the Medicare Secondary Payer Act. It makes sense to reimburse Medicare, but it has to be in a manner that does not interrupt our ability to promptly resolve claims and bring unintended exposures such as this.
Ric Henry | President
Pendulum, LLC (formerly LTC Alliance, LLC)
505-889-8262 or 888-815-8250 | Cell: 505-710-9075
Balancing Risk and Defensibility in the Healthcare Setting
Firm/Company: US Department of Justice
Document Date: February 23, 2020
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