Recurring Medicare Liens and Settlement Payment Issue Arises Again

In a Memorandum  Opinion out of the Eastern District of Pennsylvania in Villare v. GEICO Casualty Company, NO. 14-2288 (E.D. Pa. March 24, 2015 Baylson, J.), the court addressed a Plaintiff’s Motion to Enforce Settlement Agreement where the carrier was insisting upon confirmation with respect to any Medicare Liens prior to releasing the settlement draft.

Following a settlement conference the parties settled an underinsured motorist (UIM) for $100,000.  The letter confirming the settlement included an agreement “to satisfy any and all liens being asserted in this matter with these settlement funds.”  After the Release was sent, a dispute arose as to whether the insurance company could require that confirmation be obtained that there is no Medicare lien and that no Medicare liens will exist in the future. 

The Plaintiff filed a motion to enforce the settlement when the carrier would not settle the case without the letter. The Plaintiff provided an agreement to indemnify and hold harmless and also affidavits pertaining to the Medicare issue. 

The court granted the Plaintiff's motion to enforce the settlement.  Interestingly, at footnote 5 the court noted that if the carrier "seeks certainty that Medicare will never assert a lien, the Court is doubtful that Medicare could or would provide such a guarantee with regard to the unknown, hypothetical costs for future medical care that may or may not occur.” 

Anyone desiring a copy of this decision may contact me at dancummins@comcast.net.

I send thanks to Attorney Scott Cooper of the Harrisburg, PA law firm of Schmidt Kramer for bringing this case to my attention.


Commentary:

This decision supports an argument that requests for confirmation of possible future Medicare liens will not be upheld.  This decision also appears to be another example of a type of case were the court will not allow a payment of a settlement amount to be held up by a demand for the production of a Final Medicare Lien Letter first if that contingency was not a part of the pre-settlement negotiations. 

Keep in mind, however, that other court decisions have held that where the carrier makes specific demands, during the course of settlement negotiations, that a Final Medicare Lien Letter will have to be produced prior to the issuance of a settlement draft, such a demand will be upheld as a part of the meeting of the minds in the settlement process.

For other Tort Talk blog posts on this recurring issue, click HERE.