Many insurance companies are
insisting on putting Medicare as
a payee on settlement checks. As
Clayton Starnes
of
The Plaintiff’s Resource points
out in the following piece there
is no legal requirement for
Medicare to be made a payee on
settlement checks.
“There is a misconception among
payers of personal injury
settlements that Medicare, by
law, should be named on the
settlement check to comply with
the Medicare Secondary Payer
Provisions of the Social
Security Act (MSP). This is not
the law and is simply not so.
There is no legal requirement to
put Medicare’s name as a payee.
Medicare is not a party to the
lawsuit. Further, Medicare does
not request that they be
included on the settlement
check.
In Tomlinson v. Landers,
2009 WL 1117399 (M.D. Fla. 2009)
the Court found that the MSP
didn’t require Medicare be on
the check. This was an auto
accident case with a $100,000
policy limit. The Defendant’s
insurance company added Medicare
as a payee on the check after
the parties agreed to settle the
case. Unpleased about it, the
Plaintiff returned the check and
requested it to be issued
without Medicare listed as
payee, and further indicated
that Medicare would be
reimbursed and would agree to
hold the insurance company
harmless for any Medicare
claims. Nonetheless, the carrier
insisted that federal law
requires that Medicare be
included as a payee on the
settlement check, citing 42 CFR
411.24(i) and refused to remove
Medicare from the check.
The Court stated that Defendant
misconstrued the Medicare
Secondary Payer Act and the Code
of Federal Regulations. The
Court found that: 1) federal law
does not mandate that a primary
payer (or insurer) make payment
directly to Medicare; and 2) the
insurance company would not have
violated federal law if it
omitted Medicare from the
settlement check.
Although the Court recognized
that an insurer may be liable to
Medicare if the
beneficiary/payee does not
reimburse Medicare for any
amounts owed to Medicare within
60 days, and may be in the
carrier’s best interest, the
carrier was not required by
federal law to include Medicare
on the check. “
Clayton Starnes
