Don’t Rely on an MSP Conditional Payment Notice when Executing a Settlement Agreement and General Release

In a recent decision on 3/13/2018, Mayo v. NYU Langone Medical Center, the courts voided a settlement on the grounds of a mutual mistake because both the plaintiff and defense relied upon a conditional payment notice rather than a conditional payment demand or initial determination. The plaintiff provided a conditional payment notice that was dated several months prior to settlement in the amount of $2,824.50, which represented what the Centers for Medicare and Medicaid Services (CMS) believed to be payments made by Medicare at that time.

After the settlement was reported, CMS issued a demand in the amount of $145,764.08 to the estate of the Medicare beneficiary, who had exhausted all appeals with CMS in an attempt to reduce the Medicare recovery amount. The court rejected the arguments from the defense, stating that it was the plaintiff’s responsibility to obtain the final conditional payment amount from Medicare.

Best practices include obtaining a conditional payment notice pre-settlement so that all parties are aware that related conditional payments demanded must be reimbursed to Medicare. Settlement language must be clearly worded so that the parties know who is obligated to repay Medicare and whether the conditional payment reimbursement will be paid “out of” or “in addition to” the total settlement amount. When a settlement involves a Medicare beneficiary, both parties should not close their files until confirmation that conditional payment recovery has been fully satisfied.

Optum Settlement Solutions can provide assistance in:

  • Researching the Medicare Secondary Payer Recovery Portal to track potential conditional payments assigned, or added, to your claim, including interest being accrued
  • Obtaining a conditional payment summary pre-settlement so you may evaluate your case and plan your negotiation strategy
  • Providing notice to CMS of a settlement date and amount to elicit a final amount owed
  • Reviewing Medicare Secondary Payer (MSP) compliance settlement language
  • Appealing unrelated conditional payments demanded by CMS recovery contractors
  • Assuring that the MSP conditional payment debt has been fully satisfied

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