Barclay Damon
Barclay Damon

Legal Alert

UPDATE: Recent New York Decisions Demonstrate the Need for Extreme Caution When Addressing Settlements Involving Medicare Issues

As we reported in the February 2012 legal alert entitled, Recent New York Decisions Demonstrate The Need For Extreme Caution When Addressing Settlements Involving Medicare Issues, Medicare liens are a source of anxiety for defense attorneys and insurance adjusters. In order to protect clients and carriers, defense counsel must insist that any Medicare lien verification measures be: (1) addressed in settlement negotiations; (2) contained in the settlement papers; and (3) clearly agreed to by all parties before the plaintiff tenders a Release. Recently, the Appellate Division, Second Department, highlighted the apparent split in the Second and Fourth Departments with its decision in Torres v. Hirsch Park, LLC, 2012 NY Slip Op 00775 (2d Dep’t Jan. 31, 2012). In Torres, the Court granted the defendant’s motion for leave to pay the settlement proceeds into Court based upon its finding that the plaintiff’s general release and stipulation of settlement defective, because it failed to include any provisions releasing and holding the defendant harmless from potential Medicare and Medicaid liens, or acknowledging that any such liens would be satisfied from the settlement proceeds. In so doing, the Court explicitly cited the Fourth Department’s decision in Tencza.

It remains to be seen whether the Court of Appeals will weigh in on this issue.

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