Show Me the Money

In the recent Allegheny County Court of Common Pleas decision by Judge R. Stanton Wettick in the case of Wimberly v. Katruska, PICS Case No. 12-1060 (C.P. Allegheny Co. May 23, 2012 Wettick, J.), the Court addressed the recurring issue of personal injury settlements being held up by Medicare issues.

Judge R. Stanton Wettick

In this matter, a Plaintiff settled her personal injury claims and demanded payment. Apparently, the Defendant and the Defendant’s carrier refused to issue the settlement payment until the Plaintiff provided a no-lien letter from Medicare. Accordingly, the Plaintiff filed a Petition to Enforce the Settlement.

According to a report on this opinion, Judge Wettick noted that, under the Medicare Secondary Payer Act (MSPA), Medicare can only pay bills not paid by a “primary payer.” Under the law, if Medicare makes a payment and a primary payer is identified, the primary payer must reimburse the United States government for the payment made.

The MSPA identifies an automobile or liability insurance policy as a primary payer. Therefore, under the law, if an insurance company has already made a payment for the same services, the insurance company paying the settlement amount can be required to reimburse Medicare under the applicable regulations. The regulations also give Medicare and the Centers for Medicare Services (CMS) a direct right of action to recover from any primary payer.

In this Wimberly case, the Defendant argued that his insurance company was entitled to withhold payment until Medicare issued a no-lien letter because that was the only way an insurance company and its insured could avoid double payments.

Judge Wettick rejected this argument and pointed to the Superior Court decision of Zaleppa v. Seiwell, 9 A.3d 632 (Pa. Super. 2010), under which the Superior Court rejected a similar argument because the MSPA was not designed to enable private parties to act on behalf of the United States Government in securing reimbursement to Medicare.

However, because the Defendant in this Wimberly matter contended that the parties’ settlement agreement conditioned payment on the receipt of a no-lien letter, the Court issued a rule to show cause why the settlement agreement should not be enforced. In issuing the Rule, the Court noted that the Defendant had the burden of establishing an agreement that the payment was conditioned on a no-lien letter.

For other Tort Talk posts on other similar cases addressing the same issue, click here. Anyone desiring a copy of the Wimberly v. Katruska Opinion may contact the Pennsylvania Law Weekly’s Instant Case Service at 1-800-276-7427 and give the above PICS Case No and pay a small fee.

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