Medical Malpractice Settlement Agreement

MEDICAL MALPRACTICE SETTLEMENT AGREEMENT AND MUTUAL RELEASE

(Maryland)

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions (Payment / Liens / Dismissal)
4. Representations & Warranties
5. Covenants & Restrictions (Confidentiality; NPDB)
6. Default & Remedies
7. Risk Allocation (Mutual Release; § 3-2A-09 Cap; Tax)
8. Dispute Resolution
9. General Provisions
10. Execution Block

1. DOCUMENT HEADER

1.1 Parties

This Medical Malpractice Settlement Agreement and Mutual Release (the "Agreement") is entered into as of [EFFECTIVE DATE] (the "Effective Date") by and between:

(a) [CLAIMANT FULL LEGAL NAME], an individual residing at [ADDRESS] ("Claimant"); and

(b) [HEALTHCARE PROVIDER FULL LEGAL NAME], a [ENTITY TYPE] organized under the laws of [STATE] with its principal place of business at [ADDRESS] ("Provider").

Each is a "Party" and collectively the "Parties."

1.2 Recitals

A. Claimant alleges that Provider's medical services rendered on or about [DATE(S) OF CARE] caused personal injuries (the "Claim").
B. The Claim is or was the subject of a proceeding filed with the Maryland Health Care Alternative Dispute Resolution Office ("HCADRO") under Md. Code Ann., Cts. & Jud. Proc. § 3-2A-04, HCADRO Case No. [______], and, if waived or transferred, a civil action styled [CASE CAPTION] in the Circuit Court for [COUNTY], Maryland (the "Action").
C. A Certificate of Qualified Expert and accompanying Report were ☐ filed ☐ waived ☐ not yet required pursuant to Md. Code Ann., Cts. & Jud. Proc. § 3-2A-04(b).
D. The Parties wish to fully and finally resolve the Claim and the Action without admission of liability and in compliance with Md. Code Ann., Cts. & Jud. Proc. § 3-2A-01 et seq., including the noneconomic damages limitation under § 3-2A-09.

NOW, THEREFORE, in consideration of the mutual promises herein and other good and valuable consideration, the Parties agree as follows:

2. DEFINITIONS

"Action" — As defined in Recital B.

"Cap" — The statutory limitation on noneconomic damages set forth in Md. Code Ann., Cts. & Jud. Proc. § 3-2A-09, equal to $890,000 for causes of action arising during calendar year 2025 and $920,000 for causes arising during calendar year 2026, with annual $15,000 increases on January 1 of each subsequent year; for wrongful-death actions with two or more beneficiaries, 125% of the applicable Cap ($1,130,000 for 2026). Verify the figure applicable to the year Claimant's cause of action arose.

"Certificate" — A Certificate of Qualified Expert filed (or that would have been required to be filed) under Md. Code Ann., Cts. & Jud. Proc. § 3-2A-04(b).

"HCADRO" — The Maryland Health Care Alternative Dispute Resolution Office.

"Lien Holders" — Medicare, Medicaid, TRICARE, ERISA plans, hospital lienholders under Md. Code Ann., Com. Law § 16-601 et seq., and any other entity asserting a subrogation, reimbursement, or statutory lien against the Settlement Amount.

"NPDB" — The National Practitioner Data Bank established under 42 U.S.C. § 11101 et seq.

"Released Claims" / "Released Parties" — As defined in Section 7.2.

"Settlement Amount" — The total consideration set forth in Section 3.1.

3. OPERATIVE PROVISIONS

3.1 Payment of Settlement Amount

(a) Provider shall pay (or cause its insurer to pay) Claimant the total Settlement Amount of $[SETTLEMENT_AMOUNT] on or before [SETTLEMENT PAYMENT DATE] by [WIRE TRANSFER / CHECK] payable to [PAYEE — typically "[Law Firm] IOLTA Trust Account, FBO Claimant"].

(b) Allocation:
i. Economic damages (past/future medical expenses, lost wages): $[_____]
ii. Noneconomic damages (pain, suffering, loss of consortium), subject to the Cap: $[_____]
iii. Attorneys' fees and costs: $[_____]
iv. Lien resolution holdback: $[_____]

3.2 Structured Settlement (Optional)

If elected, Provider (or insurer) shall fund a qualified assignment under 26 U.S.C. § 130 and purchase an annuity from an A.M. Best A- or better carrier per the schedule on Schedule 3.2. The actuarial present value shall equal the Settlement Amount.

3.3 Liens; Medicare Secondary Payer

(a) Claimant's Responsibility. Claimant is responsible for satisfying all Lien Holders from the Settlement Amount, including Medicare (42 U.S.C. § 1395y(b)(2); 42 C.F.R. § 411.24), Medicaid (42 U.S.C. § 1396a(a)(25)), ERISA, and Maryland Medical Assistance reimbursement under Md. Code Ann., Health-Gen. § 15-120.
(b) MSA / Set-Aside. If Claimant is a Medicare beneficiary or has reasonable expectation of enrollment within 30 months, the Parties shall consider a Medicare Set-Aside Arrangement consistent with CMS guidance.
(c) Indemnity to Provider. Claimant indemnifies Provider and Released Parties from any unsatisfied lien or recovery action by any Lien Holder, to the extent permitted by law.
(d) Section 111 Reporting. Provider's insurer shall report this settlement to CMS under 42 U.S.C. § 1395y(b)(8) as required.

3.4 Dismissal / Voluntary Withdrawal

Within five (5) business days after full delivery of the Settlement Amount, Claimant shall file (i) a notice of voluntary withdrawal of the HCADRO claim, and (ii) a Stipulation of Dismissal With Prejudice of the Action, each Party to bear its own fees and costs except as provided herein.

3.5 Conditions Precedent

Provider's payment obligation is contingent upon: (a) full execution; (b) Claimant's executed IRS Form W-9 (and W-9 from counsel); (c) executed dismissal/withdrawal documents in escrow; and (d) reasonable evidence of lien resolution status.

4. REPRESENTATIONS & WARRANTIES

4.1 Mutual Authority. Each Party has full power and authority to enter and perform this Agreement; if Claimant is a minor or under disability, court approval per Md. Rule 2-202(b) / Md. Rule 15-405 has been (or will be) obtained.

4.2 No Assignment of Claims. Claimant has not assigned, pledged, or transferred any portion of the Claim.

4.3 Lien Disclosure. All known Lien Holders are listed on Schedule 4.3.

4.4 Survival. Sections 4.1–4.3 survive for eighteen (18) months post-Effective Date; fraud claims survive indefinitely.

5. COVENANTS & RESTRICTIONS

5.1 NPDB Reporting. Provider acknowledges its insurer or self-insured trust is required to report any payment made for the benefit of a practitioner under 42 U.S.C. § 11131 and 45 C.F.R. § 60.7. Claimant's counsel acknowledges that NPDB reporting is mandatory and that no provision of this Agreement shall be construed to waive or limit it.

5.2 Confidentiality.
(a) Except as required by law (including NPDB and Section 111 reporting), or to tax/legal/financial advisors, insurers, immediate family, lienholders, and the Court, the Parties shall keep the terms (and existence, if elected) of this Agreement confidential.
(b) Permitted Disclosures. Court filings, IRS filings, Maryland Board of Physicians reporting under Md. Code Ann., Health Occ. § 14-413 if applicable, and disclosures compelled by law.
(c) Breach. Liquidated damages or other remedies for breach shall be limited to actual damages; punitive damages are not available for confidentiality breach.

5.3 Non-Disparagement. Each Party agrees not to make any false or defamatory statement about the other concerning the Claim. Truthful statements to regulators, the Maryland Board of Physicians, or law enforcement are expressly permitted.

5.4 No Future Care. Nothing herein restricts Claimant's right to seek care from any provider or restricts Provider's right to practice. Any provision purporting to do so is void as against Maryland public policy.

5.5 Notice & Cure. Written notice and a ten (10) business day cure period before any remedy under Section 6.

6. DEFAULT & REMEDIES

6.1 Events of Default.
(a) Provider fails to deliver payment when due;
(b) Claimant fails to file dismissal/withdrawal as required;
(c) Material breach of Section 5.2 confidentiality.

6.2 Remedies.
(a) Provider Default. Claimant may enter a stipulated judgment for the unpaid Settlement Amount plus statutory interest at the Maryland legal rate under Md. Code Ann., Cts. & Jud. Proc. § 11-107 (6% per annum, or 10% on judgments per § 11-301), reasonable attorneys' fees, and costs.
(b) Claimant Default. Provider may seek dismissal with prejudice and reasonable enforcement fees and costs.

6.3 Attorneys' Fees. Prevailing Party in enforcement action recovers reasonable fees and costs.

7. RISK ALLOCATION

7.1 Compliance with Statutory Cap. The noneconomic damages component of the Settlement Amount complies with Md. Code Ann., Cts. & Jud. Proc. § 3-2A-09 as in effect for the year the cause of action accrued. The Parties acknowledge no admission as to the value or applicability of the Cap.

7.2 Mutual Release.
(a) Released Claims — Any and all past, present, or future claims, demands, causes of action, damages, or liabilities of every kind, whether known or unknown, suspected or unsuspected, arising out of or related to the Claim, the medical care at issue, the Action, or the HCADRO proceeding.
(b) Released Parties — The Parties and their parents, subsidiaries, affiliates, insurers, reinsurers, officers, directors, agents, employees, predecessors, successors, heirs, and assigns.
(c) Release. Each Party fully and forever releases the other and the Released Parties from the Released Claims.
(d) Unknown Claims. Maryland does not have a Cal. Civ. Code § 1542 analog, but the Parties expressly acknowledge that this release extends to unknown and unsuspected claims and is intended to be construed as a general release to the fullest extent permitted by Maryland law.

7.3 Tax Treatment — IRC § 104(a)(2).
(a) The Parties intend that the portion of the Settlement Amount allocated to compensation for personal physical injuries and physical sickness be excludable from Claimant's gross income under 26 U.S.C. § 104(a)(2).
(b) Any portion allocable to interest, punitive damages, lost wages (employment claims), or emotional distress unrelated to physical injury may be taxable.
(c) No Tax Advice. Provider has not provided tax advice. Claimant shall consult independent tax counsel.
(d) Reporting. Provider/insurer shall furnish IRS Form 1099 reporting only as required by law.

7.4 No Admission of Liability. This Agreement is a compromise of disputed claims. Neither the negotiation, execution, nor performance of this Agreement constitutes an admission of liability, fault, or wrongdoing by Provider or any Released Party.

7.5 Force Majeure. Neither Party is liable for delay caused by events beyond reasonable control, except payment obligations are not excused.

8. DISPUTE RESOLUTION

8.1 Governing Law. Maryland law, without regard to conflict-of-laws principles.

8.2 Forum. Exclusive jurisdiction in the Circuit Court for [COUNTY], Maryland.

8.3 Optional Arbitration. Upon mutual written election within ten (10) business days of the Effective Date, disputes shall be resolved by binding arbitration before a single arbitrator under the Maryland Uniform Arbitration Act, Md. Code Ann., Cts. & Jud. Proc. § 3-201 et seq., in [CITY], Maryland. The arbitrator shall be a retired Maryland Circuit Court or appellate judge.

8.4 Jury Waiver (Optional). Subject to Md. Rule 2-325, the Parties knowingly and voluntarily waive trial by jury in any proceeding arising from this Agreement.

9. GENERAL PROVISIONS

9.1 Amendments; Waivers. In writing, signed by both Parties.
9.2 Assignment. No assignment without prior written consent, except Provider may assign to its insurer for payment purposes.
9.3 Successors & Assigns. Binds and benefits successors and permitted assigns.
9.4 Severability. Invalid provisions are construed narrowly; remainder remains in effect.
9.5 Entire Agreement. This Agreement, with Schedules, is the entire agreement and supersedes prior negotiations.
9.6 Counterparts; Electronic Signatures. Counterparts permitted; electronic signatures valid under Md. Code Ann., Com. Law § 21-101 et seq. (MUETA).
9.7 Court Approval for Minors / Incapacitated Persons. If Claimant is a minor or under disability, this Agreement is conditioned on approval under Md. Rule 15-405 / Md. Rule 10-204.

10. EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

CLAIMANT

____________________________________
[CLAIMANT NAME]
Date: _______________________________

CLAIMANT'S COUNSEL (acknowledging lien-resolution obligations and tax disclosure)

____________________________________
[COUNSEL NAME / FIRM]
Date: _______________________________

PROVIDER

____________________________________
[AUTHORIZED SIGNATORY]
Title: ______________________________
[PROVIDER LEGAL NAME]
Date: _______________________________

SCHEDULES

• Schedule 3.2 — Periodic Payment / Structured Settlement Schedule
• Schedule 4.3 — Disclosed Liens (Medicare, Medicaid, ERISA, hospital, subrogation)
• Schedule 7.3 — Tax Allocation Statement (economic vs. noneconomic; IRC § 104(a)(2))

SOURCES AND REFERENCES

• Md. Code Ann., Cts. & Jud. Proc. § 3-2A-01 et seq. — Health Care Malpractice Claims Act
• Md. Code Ann., Cts. & Jud. Proc. § 3-2A-04 — Certificate of Qualified Expert (mandatory)
• Md. Code Ann., Cts. & Jud. Proc. § 3-2A-06 — HCADRO procedures and waiver
• Md. Code Ann., Cts. & Jud. Proc. § 3-2A-09 — Noneconomic damages cap ($890K 2025; $920K 2026; +$15K/yr; 125% for wrongful death with 2+ beneficiaries)
• 42 U.S.C. § 11131; 45 C.F.R. § 60.7 — NPDB reporting (mandatory)
• 26 U.S.C. § 104(a)(2) — Tax exclusion for personal physical injury damages
• 42 U.S.C. § 1395y(b) — Medicare Secondary Payer; 42 C.F.R. § 411.24
• Md. Code Ann., Health-Gen. § 15-120 — Maryland Medical Assistance reimbursement
• Md. Rule 15-405; Md. Rule 10-204 — Court approval of minor/incapacitated settlements