Dealing With Liens (Continued from page 17)


Medicare beneficiary, the beneficiary’s Medicare number,2


the date of the acci-


dent, the type of accident, the type of injuries, and a medical authorization al- lowing Medicare to provide information to the attorney.


In Maryland, the con-


tractor for part A of Medicare, which is for hospital services, is Blue Cross/Blue Shield, and a good contact person is Anna Bertin.3


Medicare Part B for Maryland-


ers is handled out of Dallas. Medicare’s rule is that the part that has the larger in- terest is the one given responsibility for negotiating and dealing with the total lien. Since part A deals with hospitalization ex- penses, it typically is the part that is given control over the lien. This is fortunate since the Timonium office is known to have helpful and reasonable persons while perhaps the Dallas office does not. Medicare takes a reasonable approach


to resolving their liens. It is a given that Medicare automatically will reduce its lien by a pro rata share of attorney’s fees and expenses, except with regard to pip pay- ments. In addition, if, for example, there is a problem with insurance coverage or with the issues of liability and causation, a Medicare lien can be negotiated further, but here the matter is referred to the Health Care Financing Administration, which has the sole authority for these types of negotiations. A rule of thumb often adhered to is that Medicare, through HCFA, will not seek more than half of the net recovery after deduction of attorney’s fees and expenses. In cases of financial hardship, Medicare will consider waiving its lien altogether. Medicare is a bureaucracy, and if a trial


2 3


This is usually the person’s Social Security number, but not always.


Ms. Bertin’s information is as follows: Mary- land Medicare Part A, 1946 Greenspring Drive, Timonium, Maryland 21093, phone: 410-561-4293, fax: 410 561 4293.


B. Medical Assistance Medical Assistance is a federally funded


program run by the states that provides health coverage for certain persons in fi- nancial hardship. At present in Maryland, persons who typically qualify for Medical Assistance are those in financial hardship who either have children or are regarded as disabled. Maryland Health General Annotated


Code Section 15-120 creates a subroga- tion lien for Medical Assistance against personal injury actions. However, unlike Medicare, the lien only has effect if writ- ten notice is provided by the Medical Assistance program. However, if the writ- ten notice is provided to an attorney, then the attorney faces personal liability for any settlement monies disbursed without the written approval of Medical Assistance. In Maryland, the contact person con- cerning Medical Assistance is Michael Levine in the Medical Assistance Legal Recoveries Unit (410-767-1781). Unlike Medicare, Medical Assistance will not automatically reduce its lien by a pro rata share of attorney’s fees and expenses. However, they are receptive to compro- mising their liens in situations of disputed liability or causation. Generally, they never seek to claim more than half of what is left after attorney’s fees and expenses, and in situations of limited liability cov- erage and catastrophic loss, they often will waive their lien altogether. However, be- fore waiving, Medical Assistance likely will insist that an attorney reduce his or her fee.


Since eligibility for Medical Assistance depends in large part on meeting rigor- ous criteria demonstrating financial hardship, a delicate situation can arise


attorney is seeking more than a pro rata reduction of a Medicare lien for attorney’s fees and expenses, then that process has to be set in motion early. At a minimum, 45 days is needed to review a lien for po- tential compromise. This same delay applies with regard to getting a Medicare lien trimmed down on the basis that it is over inclusive.


when a Medical Assistance recipient is about to obtain a significant sum of money from a personal injury settlement. Often, tragically injured persons have no source of coverage for medical expenses other than Medical Assistance. In order to avoid killing their eligibility for Medi- cal Assistance, a “Special Needs Trust” can be established. The trust allows for mon- ies to be set aside to pay for medical costs and other living expenses that will not be covered by Medical Assistance, such as the cost of a specially equipped van or house. In turn, the trust document provides that upon death, any assets left in it revert first to Medical Assistance. In creating a Spe- cial Needs Trust, a valuable contact person is Assistant Attorney General John Lessner (410-767-1858). There may be some basis for concern that an attorney handling a personal in- jury claim can become responsible for a Medical Assistance lien even if the depart- ment of Health and Mental Hygiene has not given them written notice of such a lien. Section 15-120(b) provides as fol- lows:


(b) Notice to Department - (1) An


attorney representing a program recipient in a cause of action to which the depart- ment has a right of subrogation shall notify the department prior to filing a claim, commencing an action, or negoti- ating a settlement. (2) The attorney shall notify the department in advance of the resolution of a cause of action and shall allow the department three business days from the receipt of the notice to establish its subrogated interest. (3) The subsec- tion may not be construed to create a cause of action for notifying or failing to notify the department. Respectfully, it is suggested that un- less the attorney is given written notice of a Medical Assistance lien, then the attor- ney does not have liability under the Medical Assistance lien statute in light of section 15-120(b)(3) which states that subsection (b) “may not be construed to create a cause of action for notifying or failing to notify the department.” Nevertheless, in cases of serious injury or ongoing need for future care, wisdom dictates that the Department of Health and Mental Hygiene should be contacted, particularly where there is going to be a need to set up a special needs trust.


C. Health Insurance Plans


1. General Considerations Often, but not always, a health plan that pays for medical expenses incurred as a result of an accident will send a letter to its member asserting a lien against any


18 Trial Reporter Spring 2001


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56