Is a payer entitled to a reversal?

  • By admin
  • 7 December, 2012
  • Comments Off on Is a payer entitled to a reversal?


Yes, the payer can be entitled to a reversal, depending on how the Settlement Agreement is resolved.

A reversionary clause can be negotiated as part of the Medicare Set-Aside Settlement Agreement, where if the beneficiary dies prematurely some or all of the initial investment (capital) can come back to whoever is designated per the Agreement.  At the time the Agreement is drawn up, funds can either revert back to the payer (i.e. insurer or self-insured), they can be designated to go to the beneficiary (the claimant’s named beneficiary), or funds can be designated  to be divided up and go to both the payer and the beneficiary.

Terms for how to revert funds are determined as part of the Settlement Agreement and all negotiations must occur prior to signing the Agreement.  Sometimes, a reversionary clause can help bring a Settlement to full Agreement more quickly.   For example, if a claimant believes that a certain set of funds are needed to protect their interests, yet the payer feels they are too high, often a reversionary clause can be written to have funds revert back to the payer in order to bring about resolution.

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