NY Supreme Court Case Highlights the Importance of Settlement Language in Medicare Beneficiary Settlements

Last week, the New York Supreme Court dismissed an employer’s appeal regarding unclear Medicare Secondary Payer (“MSP”) settlement language in the case of Matter of Perez v. Bed, Bath & Beyond, 2022 NY Slip Op 02607 (App. Div.). This appeal dismissal is a good reminder that if settlement language as it pertains to MSP obligations is unclear, the settlement can be challenged.

Factual Overview & Ruling

The Respondent, Jose Perez, suffered a workers’ compensation injury to his left ankle, left knee, and back in a 2012 accident while he was employed by Bed, Bath & Beyond (“Appellant”). In 2019, Mr. Perez entered into a Section 32 Waiver Agreement (“Agreement”) with Appellant, which, under New York law, is a negotiated settlement agreement between an injured worker and an insurance carrier/employer to settle indemnity and/or medical benefits under a workers’ compensation claim.

The Agreement provided Mr. Perez with $300,000.00 plus a Medicare Set-Aside (“MSA”) annuity, and it also included a provision which allowed the parties to withdraw from the Agreement within ten (10) days of its filing with the New York Workers’ Compensation Board (“Board”). The Agreement was ultimately finalized; however, more than 10 days after the agreement was filed with the Board, Mr. Perez filed a letter indicating his intent to withdraw from the Agreement on the basis that there was an inconsistent provision regarding the MSA annuity.

Although the Board found the request to withdraw untimely, it granted the parties ninety (90) days to mutually agree upon modifying the Agreement due to the inconsistent MSA annuity provision. Appellant appealed this decision to the New York Supreme Court (“Court”). Ultimately, the Court dismissed Appellant’s appeal on the basis that the Board’s decision was interlocutory and not the proper subject of an appeal.

Sanderson Firm Commentary

The Perez case highlights the importance of clear MSP settlement language. Compliance with the MSP Act is already a complex feat to tackle for any attorney/claims professional, and thus, those not working with Medicare claims often unknowingly create ambiguities when crafting settlement language for MSP claims. Sanderson Firm sees the improper use of settlement language occur when “boilerplate” settlement language is used involving Medicare beneficiary settlements.

In cases like the instant one discussed herein, where attorneys craft unclear MSP settlement language, the end result may unfortunately be retracted continued litigation on a claim that should have been previously finalized. Parties would be wise to partner or consult with an MSP legal professional prior to finalizing settlement paperwork in order to eliminate exposure to post-settlement litigation / withdrawal attempts based upon unclear meeting of the minds as it pertains to MSP obligations of the parties. At Sanderson Firm, our legal professionals work hand-in-hand with the settling attorneys to craft clear MSP settlement provisions that is tailored to each particular settlement. As a result, our clients may remain confident that their MSP settlement language will not later be challenged by a court or the claimant / claimant’s attorney.

If you have any questions regarding this case or wish to retain Sanderson Firm for Medicare Secondary Payer services, please contact us.