Wimberly v. Katruska, 2012 Pa. Dist. & Cnty
Plaintiff and defendant settled this claim for $9,000 and plaintiff was a Medicare beneficiary. Defendant took the position that it would not disburse the settlement funds until it received confirmation from Medicare that there was no Medicare reimbursement amount.
Whether defendant may condition payment of a settlement upon plaintiff providing a letter from Medicare.
Maybe. The Court ordered a hearing on the issue of whether the settlement agreement was in fact conditioned upon the information being received from Medicare. The court cites to another Pennsylvania case (Zaleppa v. Seiwell, 9 A.3d 632 (Pa. Super. 2010) where motions to enforce was granted. In Zaleppa, the court acknowledged that the Medicare Secondary Payer Act gives CMS the right to pursue a direct action against the defendant’s insurer to reimburse Medicare.
However, in this case, the court found there was a question of fact on the issue of whether there was sufficient communication to plaintiff’s counsel that the Medicare amount, if any, needed to be known prior to issuing the settlement funds.
Franco Signor Commentary:
This type of issue is being litigated across the country with regularity. In many motions to enforce involving the issue of managing the Medicare issues, the plaintiff wins because nothing was discussed prior to the settlement with a focus on managing the Medicare Secondary Payer issues. In this case, attorney for the defense argued that knowledge of the Medicare lien was a prerequisite to providing the settlement monies, and that this was communicated as an important fact to plaintiff’s counsel.
Essentially, the thousands of dollars in fees and costs spent to litigate the issue in Wimberly could have been avoided had the defendant made it clear to the plaintiff, in writing, that any settlement would be conditioned upon securing the final demand letter from Medicare.
We recommend communicating this issue well in advance of any settlement conference or mediation. If a letter can be produced demonstrating the fact that defendant made any settlement conditioned upon securing a final demand letter from Medicare then this problem can be avoided.
It is a best practice to communicate management of the Medicare Secondary Payer issues well in advance of any settlement conference or mediation. Contact us to help avoid this problem!
Please support SMART bull pending in the House and Senate. It will allow parties to collect a number before settlement, judgment or award. Today, the self-calculate option is only available for cases that will resolve for 25K or less and the claimant must attest or his treating doctor that treatment is complete and no further treatment.