Dealing With Liens (Continued from page 19)
applicable. Federal employees, however, fall under the Federal Employees Health Benefits Program, and raise separate con- siderations.
4. FEHBP Federal employees obtain their health
coverage through health plans written by private carriers that are written under the Federal Employees Health Benefits Pro- gram (FEHBP).
This program is
controlled by the Federal Employees Health Benefit Act, 5 USC section 8901 et seq., which provides that FEHBP plans’ provisions pre-empt state law, which would include CJ 11-112. That said, there is an argument that un- der the enabling regulations, such plans cannot assert subrogation claims. In par- ticular, under 5CFR section 890.201(b)(4), plans under the FEHBP are prohibited from charging members anything other than the rate quoted for the plan: (b) To be qualified to be approved by OPM and, once approved, to continue to be approved, a health benefits plan shall not: ….
(4) have an initiation, service, enroll- ment, or other fee or charge in addition to the rate charged for the plan, except
that a comprehensive medical plan may impose an additional charge to be paid directly by the enrollee for certain medi- cal supplies and services, if the supplies and services on which additional charges are imposed are clearly set forth in advance and are applicable to all enrollees. … Arguably, this language, by enumerat- ing what a member can be charged, does not permit a plan to collect from a mem- ber via the assertion of a lien. The argument in this regard would be similar to the one presented in Reimer v. Colum- bia Medical Plan, a recent Maryland Court of Appeals decision which Bruce Plaxen will address. InReimer, it was held that similar language in Maryland’s HMO statute precluded HMOs from asserting liens. This is a potential argument only and to the writer’s knowledge, it has not been tested to date.
D. HMOs
Whether and when HMOs can assert liens is a major topic unto itself which is being covered by Bruce Plaxen.
E. Hospital Liens Maryland Commercial Law Anno- tated Code sections 16-601 to 16-605 create a lien for hospitals on personal in- jury and workers’ compensation claims. This statute allows for the hospital to file
notice of a lien with the courts, which in turn obligates any liability or workers’ compensation insurer to honor the lien. Under Section 16-601, the amount of the hospital lien is limited to 50% of the amount the patient recovers after deduc- tion of the patient’s attorney’s fees. The hospital’s lien is subordinate to the attor- ney lien of the patient.
F. Workers’ Compensation Many times, persons are injured at
work in accidents caused by the negligence of someone other than their employer. In these situations, there is not only a work- ers’ compensation claim for the injured employee but also an action against the so-called third party. The classic example is an employee driving a company vehicle who is struck by a negligent motorist. Under Maryland Labor and Employment Annotated Code Section 9-902, in this situation, the employer has the exclusive right to pursue a cause of action against the third-party tortfeasor for two months following the Workers’ Compensation Commission’s first award. Thereafter, the employee also has the right to bring an action against the third party, and if the employee does so, then the employer re- tains a subrogation right for the amount of workers’ compensation benefits paid to the plaintiff. In a situation where an em- ployee pursues an action and obtains a settlement or judgment, then the amount of the workers’ compensation lien is re- duced automatically by statute by a proportionate share of the attorney’s fees and expenses. Importantly, a workers’ compensation lien may not be asserted against any amount awarded for loss of consortium. In addition, as discussed below, a workers’ compensation lien may not be asserted against uninsured motor- ist benefits. It is rare for a workers’ compensation
insurer to pursue a cause of action against a third party. Often, the best course of action is for the attorney for the plaintiff to contact the workers’ compensation in- surer early and confirm that the plaintiff’s attorney will be pursuing the cause of ac- tion and acting, in part, on behalf of the workers’ compensation insurer. The ar- rangement should then be confirmed in writing, with the attorney noting that the workers’ compensation insurer may be asked in the event of serious settlement discussions to reduce its lien beyond the statutorily required pro rata reduction for attorney’s fees and expenses. If for some reason the workers’ com- pensation insurer is antagonistic and more than two months has passed since the ini-
20 Trial Reporter Spring 2001
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