Should Defense Urge Clients To Forgo Medicare Covered Treatment?

Question: I am currently processing a settlement in which the client is a Medicare recipient. Nevertheless, he has never received Medicare covered medical treatment and has none planned. The defendant is insisting on a provision in the settlement agreement stating that the client agrees not to seek Medicare covered treatment for a period of 30 months. Is there anything in the MSP statute that supports this notion? I don't think so, but how should I respond? I cannot advise this man to forego covered treatment just for the convenience of a defense lawyer who does not understand the statute.

Answer: You are correct to believe that the MSP statute does not support the notion that a claimant must agree to forgo any Medicare covered treatment for the 30 month period of time post-settlement simply because the defense misunderstands its Medicare compliance obligations. Instead of having language in the settlement release speaking to a time period in which the claimant may not seek Medicare covered treatment, you should try to keep the release terms couched in currently enacted law under 42 USC §1395y(b) and the associated MSP federal regulations. Furthermore, you should feel comfortable enough to indemnify defense on any future cost of care issues which may arise from Medicare after the settlement. Despite their misguided perception, defense does not have any exposure to Medicare on future cost of care issues. That liability lies with your client and you. Therefore, providing indemnification on that issue provides them with a certain level of comfort while you are not agreeing to any more than the statute would require – that your client verifies and resolves any conditional payment reimbursement obligations.