When I started practicing law over 15 years ago, I would successfully fight the insurance companies to obtain a recovery for our clients, and that would be the last battle we had to fight in the case.
Now, however, when we obtain a good recovery for our clients, there are those who try to take it away—mostly the medical facilities that attach liens or subrogation interest to the recovery we are trying to make.
Lawyers now have to fight a second—and sometimes long—battle for their clients to keep the money they have obtained for them.
In the past 10 years, Medicare, Medicaid and health insurance companies have become very active in their attempts to take away your personal injury recovery.
The following are the most common categories of entities that are lined up to get their hand in your pocket after you obtain a settlement for your personal injury.
A good personal injury attorney will fight the efforts of these groups to take your money away from you.
Medicare is a program funded and administered by the Federal Government which provides certain health insurance benefits for disabled people and citizens receiving Social Security retirement benefits. Federal law provides that Medicare is a “secondary” payer. This means that if there is any insurance or benefits available to pay medical bills, those sources should be exhausted before Medicare is used.
An example of the third party recovery would be proceeds from a personal injury lawsuit paid by an insurance company which insures a negligent driver.
The law provides, however, that Medicare can pay health care costs in advance of the claimant receiving funds from the negligent party or its insurance company.
However, when the victim of an automobile accident or some other negligent conduct receives money, the federal government has a lien against those proceeds for whatever benefits were paid by Medicare relating to the injuries arising out of the negligent conduct.
It is usually not possible to completely eliminate a Medicare lien. However, there are certain things a lawyer can do to help reduce the Medicare lien.
Among the things a lawyer should do are to carefully examine the Medicare payments for which reimbursement is being sought. If those Medicare payments are not related to injuries caused by the negligent conduct, Medicare should not be reimbursed.
The lawyer should ask for a reduction in the lien. Many times in hardship cases the federal government will voluntarily reduce a Medicare lien.
Medicaid is provided to certain citizens who, for financial hardship reasons, are unable to pay for their medical costs. This is a needs-based program, and there are strict asset and income guidelines which must be met in order for an individual to become eligible for Medicaid.
Medicaid is also a federally-funded program, which is, however, administered by the states.
Unlike Medicare, there is a specific percentage limitation on the amount of a Medicaid lien.
As in the case of Medicare charges, your lawyer should carefully check the Medicaid charges to be sure they are directly related to the injuries, which arise from the accident.
If your medical bills were paid by your health insurance policy or by an employee benefit plan provided by your employer, the health insurance company or your company’s employee benefit plan will very likely want you to reimburse it out of any personal injury recovery you receive. A subrogation clause is language in an insurance policy which provides that if an insurance company pays any medical bills for you for which you are reimbursed wholly or partially by another source of funds such as a recovery from a liability insurance policy, the health insurance company would be subrogated to your claim. In other words, the health insurance company would stand in your place and collect from your recovery against the negligent party an amount sufficient to fully reimburse it for whatever health insurance cost it may have paid for you.
Many states do not allow these kinds of insurance policies under state law. Unfortunately, insurance companies seek to avoid state law by claiming that it is governed by a federal law known as the Employee Retirement Income Security Act of 1974. This law is commonly called ERISA.
ERISA laws are very complex. This area of the law changes frequently and needs to be closely monitored by your attorney. It is a strict policy of our office to fight the ERISA claim. Some lawyers “roll over” and pay their clients personal injury recoveries to any governmental agency, insurance company, doctor or hospital that makes a claim. Good lawyers do not. They carefully analyze the law and the facts and make every effort to see that the personal injury recovery is paid fully to their clients.
If you are represented by a lawyer who is not familiar with this area of the law and has not handled an ERISA case, tell them to call me.