we all need someone to lien on surviving in the lien jungle
TRANSCRIPT
WE ALL NEED SOMEONE TO LIEN ON
Surviving In the Lien Jungle
LIEN TYPES
STATUTORY Government Private
CONTRACTUAL e.g. Chiropractor
FEDERAL LIENS Uncle Sam Needs You(r) Money
MEDICARE (42 USC 11395 y(B))
Notice Requirements:
Statute of Limitations: 3 years
Priority over other liens
Effect of Failure to Pay: Double Damages
MEDICARE DON’T CARE If you say settlement was made without
admission of fault Payments were for “pain and suffering” Plaintiff’s verdict will be reduced by
comparative fault You didn’t have notice of their lien Query? $100,000 lien and $5,000
settlement
Radioactive Equals Proactive Plaintiff’s age Payor in Medical Charts Call Medicare
MEDICARE NUMBERS TO CALL MSP Guideline Questions and Other
Legal Issues: Maria Mendoza, MSP Guideline
Supervisor: (805) 367-1051, Fax: (805) 367-1155
Lori Cudahy, Third Party Liability Department: (805) 367-1052
HOW TO PROTECT AGAINST MEDICARE LIEN 1. Put Medicare on Check
2. Have Plaintiff’s attorney obtain letter authorizing payment to him
3. Contact Medicare directly
4. Have plaintiff’s attorney indemnify company
Hospitals Can Opt Out of Medicare
If They Accept Medicare Payments, Cannot Assert Lien
Negotiation Tip #1 Plaintiff’s negotiation options with
Medicare Reduced by “procurement costs” and
attorneys fees. Reduced or waived if little possibility of
recovery If you negotiate directly with Medicare,
argue a reduction on that basis
REAL LIFE EXAMPLE
Example: 61 y/o bicycle rider hit by car and has hip replacement.
Medicare reduction: $28,000 to $9,000. How much can plaintiff claim in his lawsuit against you?
Can the hospital come after you or the plaintiff for the difference?
HOW TO ACHIEVE HERO STATUS
If Hospital Accepted Medicare Payment, plaintiff can’t collect more than amount paid
Hospital Can’t Claim More
Your Hammer In Negotiations
“I’LL BE BACK” (FOR YOUR MONEY)
MEDI-CAL (Wel. And Ins. Code 14124.71-14124.791)
Notice: MUST NOTIFY MEDI-CAL SOL: 3 years from date of
settlement,judgement or award Plaintiff’s comparative fault: N/A Protect: Always Ahlborn v. Arkansas Dept. of Health
Services(2006)
OLSZEWSKI v. SCRIPPS OLSZEWSKI V. SCRIPPS CALIFORNIA SUPREME COURT Overturns provider’s right to refund
Medi-cal and go after any recovery obtained by plaintiff from third party defendant.
Windfall for insurers.
HANIF Case summary Issue: Can plaintiff make a claim for
the amount of medical expenses billed or only what was paid?
Held: Can only claim amount that Medi-cal actually paid.
Windfall: For Insurance Companies
Nishihama Case Summary
Plaintiff’s argument: Hospital can still come after me.
Court: Hospital has already been paid in full per its agreement with HMO
Case Closed?
Did Defense Get Hanif wrong?
Greer Full Amount of Medical Bills
Admissable Post Verdict Adjustment
Katiuzhinsky Finance Company Lien Full Amount Admissible Without
Reduction
Olsen v. Reid Knock, Knock, Knocking On Hanif’s
Door Collateral Source
Quagmire
HOSPITAL LIENSCivil Code 3045 et.seq. History: Hospitals win one 1992 CC 3045 Expands Hospital’s Right to Recover Includes All treatment, not just
emergency room treatment Maximum: 50% of plaintiff’s recovery Notice? Yes Statute: One year from treatment You must protect
HYPOTHETICAL #1 Hypo: $50,000 in medical bills. $15,000
policy.
Timely Lien Notice From Hospital
Paid Out Policy With Honoring Lien.
Do you keep your job?
BACON SAVED Mercy Hospital v. Farmers(1997)
Hospital only entitled to ½ of what the plaintiff got or $7,500.
If that happens, you can still resort to the Release.
Check your release language
SEEKING THE “CONTRACTUAL DIFFERENCE” : THE NEW BATTLEGROUND
Definition Historical Overview (Nishihama) Swanson v. St. John Medical Center McMeans v. Scripps Health & Parnell v.
Adventist Health System Implications to Insurers The Bottom Line
HMOs Civil Code 3040
Newest Statute in the pantheon Purpose: limit balance billing Who It Applies To: Includes Kaiser,
Blue Cross, Insurance Companies, IPAs or medical groups.
Limits Recovery Only Applies To Plaintiffs Formula Alert
How To Calculate Costs to perfect lien(minimal) plus either: 1. Amount actually paid to providers(non-
capitated plans) 2. 80% of the “usual and customary”
charges by non-capitated providers in the area(capitated plans)
Example capitated v. non-capitated Challenge: “usual and customary”(eg.
Kaiser’s charges can be way out of line)
After Determining Amount of LienSubtract the Following
1. Reduction if attorney fees 2. Reduction for plaintiff’s comparative
fault. 3. Maximum cannot exceed:
1/3 of amount due to p if attorney involved
½ due plaintiff if no attorney
Made Whole Doctrine Make First Party Med Pay Go Away
WHY YOU NEED TO KNOW THIS
“I GOT ALL THESE LIENS I HAVE TO PAY BACK”
HYPOTHETICAL(EASY) $15,000 settlement
Attorney Fees and Costs $5,000
Medical Lien(3040) $15,000
How much does HMO get back?
Hypothetical(MEDIUM) $15,000 settlement
No comparative fault
Attorney Fees and Costs: $5,000
Emergency Room $7,500
How much will plaintiff get?
Hypothetical(Who the hell knows?) $15,000 settlement offer Plaintiff 25% at fault(defense assessment) Attorney Fees and Costs: $5,000 HMO lien(3040): $10,000 How much does HMO get? Answer: subtract fee(9,000) Subtract 50% comparative fault: $1,500 50% of that is $750.00
NOTE: Plaintiff attorney negotiations with 3040 providers can be very imaginative.
Bonus Point Hypothetical $15,000 settlement $5,000 in attorney fees $10,000 in AAA first party med pay $10,000 hospital $5,000 HMO How much will plaintiff get? Answer: $5,000 How much will hospital get? Answer: $3,330 HMO: $1,670
WHY YOU NEED TO KNOW THIS #2 You Can Negotiate Directly!
ERISA Sereboff
All Other Medical Liens
Chiropractors, acupuncturists, massage therapists, witch doctors, faith healers.
All subject to negotiation A problem for the plaintiff
and his attorney They can’t come after you
Attorney Liens Must protect
WORKER COMPENSATION LIENS
Labor Code §3852 Employer may recover from 3rd party
tortfeasor total amount of compensation paid.
Labor Code §3865 3rd party judgment or settlement is
subject to lien of Employment Development Department.
Government Code §§20250-20255
Right of Public Employees Retirement System to subrogate.
Also see McQuillan v. Southern Pacific Co. (1974) 40 CA 3d 802. PERS cannot subrogate where the employee’s injury was the proximate result of the employer’s act.
Attorney Fee and Priority Issues
Quinn v. State of California (1975) 15 Cal. 3d 162. Active litigant can force passive litigant to pay share of costs and fees; common fund doctrine.
Gapusan v. Jay (1998) 66 Cal. App. 4th 734.
An employer’s right to reimbursement takes priority over the employee’s recovery and may be asserted after fees and costs are deducted.
How do I get the ?@*# Intervenor to reduce the Workers’ Compensation lien?
Understanding proportionate fault might help.
Da Fonte v. Upright, Inc. (1992) 2 C 4th 593. Civil Code §§1431-1431.5 must be applied where the worker’s injuries are caused by the tortious conduct of both the employer and a 3rd party. The employer’s share of the fault is not attributed to the 3rd party defendant when calculating non-economic damages.
Kemerer v. Challenge Milk Co. (1980) 105 Cal. App. 3d 334. Plaintiff’s negligence not imputed to employer for lien reduction purposes.
In order to determine amount of intervenor’s potential recovery, “Threshold Level” must be established per Associated Construction and Engineering Co. v. WCAB (1978) 22 Cal. 3d 829.
“Threshold Level” Employer negligence % as established
by Jury X Total Damage Award determines Workers’ Comp. Carrier’s recovery.
i.e. If verdict $1,000,000 and Employer Fault 40% ($1,000,000 X 40% = $400,000) employer lien $100,000, employer gets no recovery.
Labor Code §3854 If action is prosecuted by the
employer alone, payments “shall be considered as proximately resulting from such injury or death…”
Please see Breese v. Price (1981) 29 Cal. 3rd 923 – 3rd party defendant can challenge lien by arguing proximate cause.
Purchase of Lien/Assignment of Lien
Hone v. Climatrol Indus. (1976) 59 Cal. App. 3d 513. Court approves concept of lien assignments.
Quinn v. Warnes (1983) 144 Cal. App. 3d 309. 3rd party defendant entitled to deduction for full amount of lien, not just consideration paid for lien when lien assigned to defendant.
Be Careful! Raisola v. Flower Street, Ltd. (1988)
205 Cal. App. 3d 1004. Employee’s attorney entitled to fee from lien assigned to 3rd party when employee prevailed in 3rd party case.
HOW TO CONTACT US Bradley Bostick:Bradley
Christine & Shawn Friestad: [email protected]
Greg Stanfield: [email protected]