GA Court Orders Settlement Check Without Listing Medicare as Co-Payee


Hearn v. Dollar Rent A Car, Inc., et al

Minnie Hearn filed her complaint against DTG, York, and Dollar based upon a dispute as to whether a $20,000 settlement check should include Medicare as a payee.  The settlement arose from a November 28, 2002 automobile accident in which the driver of a car rented from DTG struck Hearn's vehicle.  DTG “contractually retained York as an independent Third Party Administrator (“TPA”) to handle claims in Georgia against DTG's renters.”

During settlement discussions between Hearn's attorney and a claims adjuster with York, the issue of Medicare's involvement arose.  According to the claims adjuster, she relied upon the attorney's representation that Medicare did not have an enforceable lien when she agreed not to include Medicare as a payee on the check.

The attorney's version was that “from day one” he and the claims adjuster both knew Hearn had been on disability and that Medicare paid some of her bills relating to the accident.  In support, he pointed to the medical bills he provided to the claims adjuster in May of 2004 indicating Medicare had made adjustments, write-offs, and payments.

On October 5, 2004, the claims adjuster offered in writing to settle Hearn's claim for $20,000.  There was no mention of Medicare being an additional payee on any settlement check in this letter.  Hearn signed the release, which included her agreement to indemnify against “all further liability, loss, damage, claims of subrogation and expense.”  She also agreed to release “known and unknown liens including Medicare.”  After returning the executed release to the adjuster, the settlement check included Medicare as a payee. 

Under Medicare statutory and regulatory framework, York faced potential liability for both the amount of any Medicare lien and double the amount if Hearn failed to satisfy any such lien within 60 days of receiving the settlement check.  The adjuster stated the potential liability was the basis for adding Medicare to the settlement check.  Hearn sued to require another check be issued without Medicare being listed as a payee.

After reviewing and considering the Medicare reimbursement statutes and regulations relevant to the specific facts of this case, the Court concluded that public policy does not preclude a court from enforcing an agreement to omit Medicare as a co-payee on a settlement check where, as here, the plaintiff signed a release that acknowledged her responsibility to pay any Medicare claim and agreed to indemnify the released parties.

About The Author:
Rayford H. Taylor

Rayford H. Taylor is an “AV” rated lawyer by Martindale-Hubbell.  He is a member of The Florida Bar and the State Bar of Georgia, and practices in the areas of administrative and governmental law, appellate practice, legislative consultation, and workers' compensation.He has practiced law in Georgia since 2002 and in Florida  since 1974. Prior to entering the private practice of law, he was affiliated with The Florida Bar for more than 12 years where he served as its general counsel and legislative counsel.

Mr. Taylor is with the Law Firm of Casey Gilson, P.C., and is a member of the National Workers' Compensation Defense Network.

His full bio is available here.

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