State Court of Appeals Refuses to Support Allocation for Claimant that is Ineligible for Medicare Benefits
Roy Franco
February 26, 2014

On November 21, 2013, the Oklahoma Civil Court of Appeals decided a case about whether an Employer was forced to disburse a proposed Medicare Set Aside amount, when it was later determined Claimant was ineligible for Medicare benefits.  The ruling was for the Employer and against the Claimant.  In this case, the settlement included a clear record regarding the Medicare Set Aside amount of $12,361.18 and that it would not be paid unless approved by the Centers for Medicare & Medicaid Services.  The issue arose, when it was determined at the time of submission, that Claimant was not a Medicare beneficiary at the time of settlement (TPOC).  He became a naturalized citizen, but it was only after he completed the settlement, and the number he previously provided to the Employer was a Tax Identification Number, that looks like a Social Security Number, but is not recognized by the Social Security Administration.  The Tax Identification Number is provided for aliens working in the U.S., but not yet U.S. Citizens or legal aliens.

The outcome is correct here.  Medicare is not responsible to pay for future benefits at the time the case was resolved, because Claimant could not reasonably be expected to become a Medicare beneficiary.  He may be applying for Citizenship, but there was no guarantee that he would get a Green Card or become a naturalized citizen that would later entitle him to Medicare benefits.  As such, the condition precedent set up in the settlement agreement that Medicare approve the Medicare Set Aside was an impossibility and as such not triggered.

What doesn’t make sense about this case, is that a check of Medicare beneficiary status prior or at the time of settlement is a simple process.  Had the Parties engaged in a relative low dollar exercise, the need to prepare a Medicare Set Aside and spend thousands of dollars on drafting releases and litigating the case after the fact could be avoided.  We always recommend to our clients simple steps during the pendency of the case to avoid unnecessary expense.  When engaging our Company, the Medicare Set Aside is not typically the answer.  Rather, whether we are dealing with a Medicare beneficiary is our first level of inquiry.  In the long run it makes sense to double check, to avoid expensive issues like what happened here.