When it comes to health care the bills are not only high but can be confusing for a layman as well. On the other hand, processing and verification of these bills may take some time, especially when it comes to Medicare, which adds to the complexities as well. Chances are, a bill can be either overpaid or underpaid along with other complications that a money lender dealing with such specific sectors need to consider.
It is important to understand the features and factors of UCC or Uniform Commercial Code because every transaction must be made according to the UCC and its rules.
- According to UCC, the secured creditor is termed as the “assignee” of any account. This secured creditor will be eligible to as for a security interest when it comes to account receivable.
- It is also required to ensure that all such transactions are subject to all the terms and conditions mentioned in the loan contract that is signed after an agreement is reached between the account holders or the third party and the borrower commonly termed as the assignor.
- In addition to that, it is also required by the UCC that any claim or defense that may rise from any contractual relationship must be settled as per the terms and conditions of the agreement as well. This is called the “recoupment” of claims.
- Apart from that, the UCC also states that the assignee or the secured party is also subject to any other claim or defense raised by the account debtor against the assignor. However, such claims must accrue before the receipt of any notification of the assignment by the account debtor. These specific claims are called the “setoff” claims.
All these means that a lender, whether it is a traditional bank or the borrowers prefer to seek a loan from any online money lending source such as https://www.libertylending.com/, must be aware of all of the other liabilities along with the chances of any potential overpayment that may have been made even years before the company entered into the specific lending relationship with the borrower.
This means, all the claims must be made within the statute of limitations but when it comes to Medicare and other specific health care insurances, the federal agency cannot make any stale claims. However, recovery or adjustments of any previous overpayments can be made by the agency according to the rules set by the government.
Role played by the courts
The courts also play a very important role in dealing with the issues that needs to be addressed immediately. Generally, when it comes to dealing with these issues, UCC states that a secured creditor is actually subject to any existing right for the setoff of such issues. The court ensures that and along with it, the court also ensures that:
- The right of recoupment of the third party is set accordingly whether or not the same existed before perfecting the lien of the secured creditor.
- In addition to that, the court also demonstrates that the lien of the secured creditor is subject to the right of setoff.
- However, the court also ensures that this right of setoff is in existence and in proper alignment with the time when such assignments were made.
All these focus on the addressing of the priority of payments which is typically in the context of the secured health care financing.
The Medicare receivables and its features
In such situations, the company has to enter into a financial agreement while financing any health care facility that will give the money lender a specific security of interest in the Medicare receivables.
- In fact, Medicare has already moved for relief from its automatic stay that is imposed at the start of a bankruptcy situation where it sets off all of its prior overpayments as against all of the ongoing payments.
- In such situations the secured lender can oppose the motion claiming inter alia and state that the rights of it as agreed as a secured creditor has given it the priority over the setoff rights that are laid down by the government.
However, in such cases the court keeps a note of the UCC which provides the money lenders with a right to setoff. This setoff rights may be asserted against the assets that are otherwise subject to a specific security interest. In case the setoff right arises before the notification of the account assignment is made, the statutory rights set by the government to offset the Medicare payments will come to the effect. These rights are normally published in the US Code.
Notice of the setoff rights of the government
When it comes to lending money to the healthcare sector by the asset based money lenders, all secured money lenders are usually on notice made by the setoff rights of the government. This is done before making any perfection in the security held or grants made on which the normal and agreed rate of interest may be applied and incurred.
- In addition to that the court also has the right to verify whether or not the company is actually following the UCC rules as set for lending money to the health care industry or payments made according to Medicare benefits.
- In such cases the court ensures and notes that the secured creditor is actually notified about any other parties involved with the potential claim against the accounts receivables for the specific assignments before the right of setoff actually arise.
To sum up
It is all about the mere filing of the financing statement and fulfilling of the clauses and terms mentioned in it. It is important because the other unsecured creditor typically has no legal right or obligation to check on the UCC clauses on filings and its fulfillment.
In such a situation, the lender is usually offered with no evidence that will prove that the Medicare program in these situations has actually received a notice of the security interest prior to setting off the rights that the court granted in favor of the motion of Medicare.