Dealing with Defendants’ Requirement to Pay Medicare’s Lien Directly

Posted in Injury Law

A recent trend among defendants is their imposition of the following conditions prior to the issuance of their settlement drafts, where one’s client is or was receiving Medicare: (1) a copy of Medicare’s Final Settlement Detail Document and Net Refund Letter and (2) that they pay Medicare’s lien directly from the settlement proceeds. Rarely are these “conditions” discussed, let alone negotiated before the settlement offer is accepted. Compliance with these conditions can cause delays in perfecting a settlement since Medicare’s final conditional payment documents are often unattainable within a reasonable time.   

An immediate motion to enforce settlement will help ameliorate the settlement delays caused by these tactics. Since defendants’ conditions were not negotiated and accepted as part of the settlement, the courts should not vary the material terms of the settlement, which should be enforced without these conditions. Further, nothing in Medicare’s statutory right of reimbursement authorizes defendants to assert Medicare’s right to reimbursement as a preemptive means of guarding against their own risk of liability.

Courts have required defendants to issue settlement drafts upon receipt of executed releases that do not contain these conditions. Nevertheless, in an effort to assuage both parties’ concerns regarding their respective Medicare liability, courts have also required plaintiffs to furnish defendants with post-settlement copies of Medicare’s final conditional payment documents and proof that Medicare’s lien has been satisfied.  
    
Rather than resort to motion practice, perhaps the most expeditious method for perfecting settlements when dealing with these types of conditions would be to offer defendants, during negotiations, post-settlement copies of Medicare’s lien payment documents.