Settlement money being held due to Medicare lien?

by C
(New York)

During the process of a lawsuit, an attorney's letter indicated to us that, by law, a settlement check can only be held in escrow for 15 days from date of deposit and all paperwork must be completed within this time frame.

The suit was settled and payment was made to the attorney's office over 1 1/2 months ago. The attorney's office is now stating that the hold up for client disbursement is based on Medicare's timeline. (Are they using Medicare as a stall factor?)

Can a client's money be held longer than 15 days waiting for "final lien information from Medicare" or should this have already been finalized with the attorney's office prior to receipt of the settlement check? Thank you for any relevant information you can give.

Disclaimer: Information provided in our response is NOT formal legal advice. It is generic legal information based on the very limited information you provided. Under no circumstances should the information in our response, or anywhere else on this site be relied upon when making decisions about your case. You should always get a formal case review from a licensed attorney.

ANSWER for "Settlement money being held due to Medicare lien?":

C (New York):

If you are presently represented by an attorney in this matter you should seek his or her advice. Your attorney is intimately familiar with the facts and the laws surrounding your case.

While it may be true a settlement check can only be held in Escrow for 15 days, if within that 15 day time period the attorney was "ready, willing, and able" to disburse the funds but was restrained from doing so by the federal government in the guise of Medicare, the attorney may be well within legal boundaries to do so.

If the sole cause for the delay is Medicare's "dragging their feet" then the attorney can't be blamed for the holdup. In New York an attorney is required by law to pay Medicare the funds previously expended on behalf of the victim/ Medicare recipient. The attorney may have had all other paperwork fully completed within the 15 day period. Presuming that is the case the attorney can't be held liable for a delay caused by a federal government agency.

If you are the victim of the delay in disbursement and the delay is over reimbursement of Medicare funds paid on your behalf, you have a right to pick up the telephone and contact Medicare. Again, if you have an attorney you should seek his or her advice before doing so.

Since laws change frequently and across jurisdictions you should get a personalized case evaluation from an attorney licensed in your state (if you haven't already). Find an experienced local attorney to give you a FREE personalized case review here.


Best of luck,

Law Guy