LIENS

By Jessica D. Thomas, Esq. – Staff Lien Counsel

On May 5, 2010, the Second District Court of Appeals of Florida decided Ingenix v. Ham, 35 So.2d 949 (May 5, 2010). This case addresses the issue of health insurance carriers’ reimbursement reductions. A health insurance company can pursue litigation for subrogation pursuant to Florida Statute section 768.76, which mandates that they are subject to the pro rata reduction for case cost and attorney’s fees. Alternatively, an insurance company may sue under the policy language for breach of contract and reimbursement from the non-ERISA policy holder. However, the second District in Ham reasoned that if Florida Statute Section 768.76(4) is applicable than it, not the policy, controls. Below is a summary of the facts and procedural background with a summary of the important aspects of the Second District Court of Appeal’s holding.

In 2004, Gerald Ham suffered complications from an elective laparoscopic gastric bypass procedure, which resulted in his death. UnitedHealthcare paid Mr. Ham’s medical bills and asserted a lien for reimbursement from any recovery his estate obtained from the medical malpractice suit. Ham argued that under Florida Statute 768.76(4) UnitedHealthcare was only entitled to reimbursement reduced by a pro rata share of attorney’s fees and costs. The Second District court framed the issue as whether or not Florida Statute Section 768.76 applied in light of the language in the insurance policy providing for full reimbursement.

Florida Statute Section 768.76(4) provides that a collateral source provider that has a right of reimbursement shall be limited to the actual amount of collateral sources recovered minus its pro rata share of attorney’s fees and costs. Ham argued that the attorney’s fees and cost were 47% of the settlement and thus the UnitedHealthcare lien should be reduced by 47% as well. UnitedHealthcare paid almost all of Ham’s medical expenses in the amount of $154,075.46. The total settlement proceeds were $1,150,00.00. Ham sought to reduce UnitedHealthcare’s lien amount to $81,660.00 under Florida Statute Section 768.76(4). UnitedHealthcare argued that under the policy they were entitled to full reimbursement. The trial court ruled in favor of the Ham Estate and UnitedHealthcare appealed.

UnitedHealthcare argued that Florida Statute Section 768.76(4) only applied where the right of reimbursement was not founded on a contract, pursuant to Travelers v. Boyles, 679 So.2d 1188 (Fla. 4^th DCA 1996). In Travelers the health insurer argued that it was not seeking reimbursement under the statute but rather under the terms of its policy. The insured’s argument was that Travelers’ claim was barred since the uninsured motorist carrier was not a tortfeasor, as indicated in the policy language. According to the holding in Travelers, where the statute is not implicated, a policy provision may allow for full reimbursement. Travelers however, does not stand for the proposition that a policy provision controls when section Florida Statute Section 768.76(4) is otherwise applicable.

In Ham the Second District Court of Appeals relied on their previous decision in Osler v. Collins, 870 So.2d 65, 67-68 (Fla. 2d DCA 2003). In Osler the court held that where an insurance policy contains a right of reimbursement, Florida Stature Section 768.76(4) applies and requires a reduction of the amount of the insurer’s reimbursement by it’s pro rata share of costs and attorney’s fees.

The Second DCA shows a clear understanding that a right of reimbursement comes with a sharing of the cost to obtain such reimbursement. The Ham decision provides some much needed relief regarding the question of whether a right of reimbursement claim, such as this one is subject to a reduction for a pro-rata share of fees and costs. Ham provides hope for the plaintiffs in such cases who are often left with a net of zero after payment to the lien holder. The end result after the ruling in Ham, is that the contract doesn’t always control the outcome of your claim regarding reductions in reimbursement. Instead there has to be an extensive review of the policy language to reveal if the Florida collateral sources provision, Florida Statute Section 768.76(4) applies.

By Stacey N. Jiunto, Esq. – Staff Lien Counsel

Two questions are at the forefront of every injured party’s mind concerning litigation: 1) how much will I recover, and 2) how long will it take to receive my money? Outsourcing your lien resolution needs offers a solution that can help address both of these issues. Lien resolution specialists strive to efficiently provide the injured party with significant savings[1] in as little as a few months after settlement.[2]

Ethical Guidelines Permitting Outsourcing

The American Bar Association has outlined several guidelines (Formal Opinion 08-451) to address any ethical concerns that may arise when outsourcing. The Florida Bar has also issued its own mandate (Opinion 07-2) in regard to outsourcing that provides similar guidance. Specifically, a lawyer may outsource legal or non-legal support services provided the lawyer remains ultimately responsible for rendering competent legal services to the client. Reasonable efforts should be made to ensure that the conduct of the lawyers or non-lawyers to whom tasks are outsourced is compatible with one’s own professional obligations as a lawyer. Additionally, client consent should be obtained, and appropriate disclosures made, regarding the use of lawyers or non-lawyers outside of the lawyer’s firm. The fees charged must be reasonable and the outsourcing lawyer must avoid assisting the unauthorized practice of law.

Advantages of Outsourcing

The benefits of outsourcing lien resolution to specialists include minimizing operating costs of the firm, gaining a knowledgeable partner, and providing the best possible result to the client. Each phone call made or correspondence written consumes precious firm resources and time of lawyers and support staff. Moreover, inefficiencies abound when lawyers and support staff work with lien holders without being armed with all available arguments that may reduce or eliminate lien obligations. A personal injury law firm that conducts lien resolution services in-house must remain well-versed in all relevant laws and practices in addition to any changes or developments. Alternatively, lien resolution attorneys and analysts already possess the requisite knowledge to handle even the most difficult lien holders and have an established history of achieving results. In addition, lien resolution specialists spend all day every day dealing with subrogation issues so they can more efficiently resolve issues. Lastly, high client satisfaction with regard to the resolution of lien obligations may produce repeat business and/or boost referrals from new clients. Having a client receive a check very quickly after settlement because of efficient lien resolution means a happy client and hopefully a future referral source.

If you have questions about lien resolution outsourcing or the obligations associated with it, contact our lien resolution experts today.

Question:

Do the VA subrogation rights apply to UM coverage, or do they only apply to the responsible third-party?

Answer:

The right of the VA to recovery from UM is not a definite yes or no answer.

When the VA cannot recover:

In researching UM recovery in VA cases, we have to look to the language within the UM plan. According to Government Employees Insurance Co. v. Andujar, 773 F.Supp. 282, it was determined that the ability of the US Government was only able to recover the “reasonable value” of medical benefits from the tortfeasor, who was an uninsured driver. The argument is that under 42 U.S.C. § 2651(a), the code specifically applies to that of the responsible third party. In this case, the United States did understand that the UM insurer, GEICO, was not the liable party, but sued them for benefits anyway. Ultimately it came down to the language of the GEICO plan, which specifically excluded the United States from recovery in the “Exclusions” section of the policy, stating “We do not cover the United States of America or any of its agencies as an insured, a third party beneficiary, or otherwise”.

When the VA can recover:

There are cases where the VA has been able to recover based on the ambiguous language of a UM plan. In United States v. State Farm 936 F. Supp. 206, 1991, the court ruled in favor of the United States in its recovery due to the following provision within the State farm policy, “Payment of Medical Expenses: We ma pay the injured person or any person or organization performing the services.” This was vague and basically permitted the United States to pursue recovery of medical benefits paid.

Other cases where the United States has won the right to recover from UM:

United States v. United Services Automobile Association, 431 F. Supp 735 5^thCircuit 1970

United State v. GEICO 440 F. Supp. 1338 5^thCircuit, 1971

United States v. Automobile Club Ins. Co. 522 F. Supp 1 5^thCircuit, 1975

So basically speaking, the attorney is advised get a copy of the UM specific plan description to be sure that the language specifically excludes the United States from receiving repayment for medical expenses. If there is no provision, then they can recover from UM benefits.

Synergy’s lien resolution group can assist your firm with Military Plan Lien Resolution. We are experienced in Tricare and Department of Veterans Affairs liens and compromises. Contact us today for more information on our Military Resolution Services, at (877)907-5436, info@synergysettlements.com.

We are the Lawyer’s Complete Solution for Lien Resolution!

Question: “I am the executor of estate on behalf of my mother who was a Medicare beneficiary. This is a wrongful death case, so does Medicare have a lien in this situation?” – Florida Resident

Answer: According to the Medicare Secondary Payer Manual (Chapter 50.5.4.1.1), Medicare’s right to recover against a wrongful death claim depends on two things, 1. The beneficiary’s state of residence, and if the state law allows for the recovery of medical expenses in a wrongful death claim, and 2. If the state’s law allows for recovery of medical claims, the amount Medicare is entitled to recover against may vary (full recovery in some states, limited recovery in others). So basically, depending on where the beneficiary lived, there may or may not be an obligation to Medicare. Some states do not allow for the recovery of medical payments, so in those states Medicare cannot assert a claim against the deceased beneficiary or survivors.

I assume that you are in Florida, so I reviewed the Florida Wrongful Death Act (FL §768.14 – 768.26) in this state. In §768.21(6)(b) it states that medical expenses that have been charged to the estate are recoverable, and § 768.21(7) states, “All awards for the decedents estate are subject to claims of creditors who have complied with the requirements of probate law concerning claims”. Therefore, in Florida, Medicare does have a right to recover their claim against the estate of the beneficiary in a wrongful death case. My suggestion is that you discuss this matter with a probate attorney for further clarification on how to proceed in this case. Be advised that this is only a general response to your question, and should not be viewed as specific legal advice, as I am not an attorney. I hope this is helpful to you in your research. Please contact us at Lien Settlement Solutions have any more questions.

Lien Settlement Solutions has professionals that can assist with questions of compliance and lien validity in cases of Wrongful Death, Malpractice, Workers Compensation, and Liability. Feel free to call us with your questions at (877) 907-5436 or email at info@lienss.com!

QUESTION:
Will the new Health Care Reform Law have any affect on ERISA plans and subrogation in the future? – FL Attorney

ANSWER: Right now there are many unknown variables regarding ERISA plans and the new Patient Protection and Affordable Care Act of 2010 that was signed into law on March 23, 2010. What we do know is that health insurance practices, including Subrogation and Recovery will experience changes over the next few years. The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans (US Department of Labor, www.dol.gov). Employer provided health plans are governed by ERISA, which also loosely defines their right of recovery, allowing for “appropriate equitable relief” (29 USC 1132(a)(3)). Plans that are self funded by the employer are evaluated based on federal ERISA law for validity. However, it is reported that over the coming months, the Department of Health and Human Services will be conducting a study to evaluate the financial solvency and ability by self funded companies to provide consistent benefits during times of economic downturn, along with several other markers (www.myhealthguide.com). This may mean a change in the classification of employer provided plans from self – funded (under federal law) to insured plans, which are evaluated against state insurance law. Next year, in 2011, insurance plans will be required to provide specific plan descriptions (SPD) and coverage information in plain, easy to understand language with, definitions, and common sense examples in a uniform format (www.myhealthguide.com). This will allow for a clearer understanding of the subrogation rights and parameters in plain terms for evaluation per Sereboff v. Mid Atlantic Medical Services, Inc. (2006), where the plan’s recovery is defined by the specific language within the plan. It will be more important than ever to obtain a copy of the specific plan description for the year of coverage to which the claimant was injured. Paying attention to these detais may make all the difference in your settlement, and may save money for your client.

As more information about the changes to ERISA Lien Resolution and Subrogation are released, we will continue to assist in the understanding of the new measures. Lien Settlement Solutions offers ERISA, Private Insurance, and Hospital/Provider Lien Resolution Services. Contact us at (877)907-5436 or email at info@lienss.com for more information.