No Legal Requirement for Medicare on Settlement Checks

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

State v. Mann

This morning, the New Jersey Supreme Court ruled that under our state's law, the plain view exception to the warrant requirement has three elements. These include:

1. The police officer must be lawfully in the viewing area.

2. The officer has to discover the evidence ‘inadvertently,’ meaning that he did not know in advance where evidence was located nor intend beforehand to seize it.

3. The officer has probable cause to associate the item with a violation of the law.

The determination by the court in this case, captioned State v. Mann, is important in that recent case law from the United States Supreme Court has called into question whether the "inadvertent" requirement is necessary under the Constitution. This case makes it clear that the three-step analysis is still required under New Jersey law.

State v. Moran

In State v. Moran, the New Jersey Supreme Court, for the first time, set forth standards that judges are to use when deciding whether (and how long) to suspend a defendant's driving privileges under NJSA 39:5-31. This statute authorizes a license suspension for any "willful" violation of Subtitle 1 of Title 39, the state's motor vehicle code. The court ruled that the motor vehicle code section 39:5-31 applies to situations involving enhanced recklessness, and the court now requires sentencing judge weigh, evaluate and place on the record a number of factors before imposing a license suspension. The mandatory factors are:

1) the nature and circumstances of the defendant’s conduct, including whether the conduct posed a high risk of danger to the public or caused physical harm or property damage;

2) the defendant’s driving record, including the defendant’s age and length of time as a licensed driver, and the number, seriousness, and frequency of prior infractions;

3) whether the defendant was infraction-free for a substantial period before the most recent violation or whether the nature and extent of the defendant’s driving record indicates that there is a substantial risk that he or she will commit another violation;

4) whether the character and attitude of the defendant indicates that he or she is likely or unlikely to commit another violation;

5) whether the defendant’s conduct was the result of circumstances unlikely to recur;

6) whether a license suspension would cause excessive hardship to the defendant and/or dependents;

7) the need for personal deterrence; and

8) Any other relevant factors clearly identified by the court also may be considered.

In addition to the foregoing, the Court reasoned that comparisons to motor vehicle statutes that impose mandatory license suspensions also may be a useful guide in some cases. It is not necessarily the number of factors that apply but the weight to be attributed to a factor or factors.

State v. Federico: 180 Max Jail time allowed in Municipal Court

In a decision handed down this morning, July 12, 2010, the Appellate Division ruled in State v. Federico that jail terms imposed as a result of multiple traffic ticket convictions arising out of a single incident may not exceed 180 days in municipal court.

This case involved a defendant who was convicted of a third offense DWI and driving on the revoked list as a result of a prior DWI conviction. The each of these offenses requires a jail term, a mandatory 180 days on the 3rd offense DWI and 10-45 days on the driving while suspended conviction when the suspension is from a prior DWI. Obviously, the combination of the two mandatory terms exceeded 180 days of municipal court jurisdictional limit. However, the Appellate Division ruled that the maximum sentence any defendant could be sentenced was 180 days because federal constitutional law would ONLY permit a sentence exceeding 180 days following the conviction for a variety of petty offenses stemming from the same incident if there were a jury trial. However, as a matter of long-standing policy, in the absence of the offer of a jury trial, 180 days of incarceration is the maximum permitted in our state for convictions of multiple petty offenses arising from the same incident.

State v. Marquez

In a stunning 4-3 decision, the New Jersey Supreme Court, reversing the state appellate court, ruled this morning in State v. Marquez that a person who has been arrested for drunk driving has the right to be informed of the obligation to submit to a breath test in the language he speaks. In order to implement the new procedures for those who speak foreign languages, the Court will rely upon the efforts of the Attorney General and the Motor Vehicle Commission to provide a means of having paragraph 36 available in a wide variety of foreign languages spoken in our state.

State v. Privott - lifting clothing during a frisk

Yesterday, the New Jersey Supreme Court ruled that the fact that the police have a legitimate basis to frisk a criminal suspect for weapons does not provide the officers with the right to lift the suspect's clothing for the purpose of recovering evidence. In State v. Privott, a five-justice majority ruled that,

"In assessing the scope of the search by the officer, the evidence is clear that defendant was cooperative at all times. When stopped, defendant placed his hands against a fence as instructed by the officer. A reasonable search, as well as the least intrusive maneuver needed to protect the safety of the officer against a possible weapon, would have been the traditional pat-down search of defendant’s outer clothing. That did not occur. Rather, the police officer lifted defendant’s

tee-shirt to expose defendant’s stomach, and in doing so, observed a plastic bag with suspected drugs in the waistband of defendant’s pants. That maneuver exceeded the scope of the patdown search needed to protect the officer against defendant having a weapon and was akin to a generalized cursory search of defendant that is not condoned."

Medicare Secondary Payer Statute

NJ appellate Division recently addressed Medicare Liens for personal injury matters in Jackson v. Time Warner, et als. Following a negotiated settlement plaintiff's counsel filed a motion witht he law divsion court seeking a court ordered allocation of the settlement proceeds in an attempt to avoid payment of the Medicare lien. The trial court refused to allocate proceeds. Plaintiff argued that the collateral source rule (NJSA 2A:15-97) barred recovery by Medicare beneficiaries of medical expenses. The appellate court did not agree with that argument. Plaintiff also argued that New Jersey's tort recovery rules are not preempted by the Medicare Secondary Payer Statute. The court stated that state collateral source statutes and other similar statutory schemes that interfere with Medicare's right to reimbursement are preempted.

In other words, before settling any case where there have been conditional medical payments made to medical providers by Medicare as well as the likelyhood that there will be future medicare payments within 36 months from the settlement of the case, the plaintiff's attorney must address this issue for his client or be personally liabile for the payments.