Dealing With Liens (Continued from page 21)
use a phrase talking of a recovery from a “third person” or “another person”. Cases from other jurisdictions have suggested that these terms would not include a claim by an individual against his own insurance policy for uninsured motorist coverage. This issue has not been tested in Maryland to the writer’s knowledge, but the argument has been used successfully in negotiations to achieve substantial reductions in asserted liens. Bolstering the argument against sub- rogation by third parties against UM benefits is a recent Court of Appeals case, Clay v. Geico, 356 Md. 257, 739 A.2d 5 (1999). There, the Court of Appeals held that a provision in an insurance policy that precluded a policy holder from making any assignment of UM benefits without the insurer’s permission precluded a health care provider who had obtained such an assign- ment from collecting any UM benefits.
H. Authorizations and Assignments Frequently, patients with personal in-
jury claims and their attorneys are confronted by a health care provider de- manding that an “Authorization and Assignment” be executed. Typically, such a document has the patient agreeing to pay the health care provider’s bill from any recovery in the personal injury claim and, in turn, the attorney agrees to set aside funds from any amounts received in or- der to pay the bill.
to execution by judgment creditors under Maryland Courts and Judicial Proceedings Annotated Code Section 11-504(b)(2). However, the Court went on to hold that the A&A created a contractual agreement between the attorney and the hospital re- quiring the attorney to protect funds for satisfaction of the hospital’s bill. As a re- sult, the attorney was held to be personally liable for the hospital’s $18,499 bill. In this regard, the Court ruled that the patient’s bankruptcy did not extinguish the attorney’s obligation. In contrast, if the attorney had not provided the A&A, the hospital would have been limited to pursuing a collection action against its patient, and that action would have been barred by the patient’s bankruptcy.
The health care
provider may insist that the A&A be ex- ecuted as a condition for providing treatment. Alternatively, the health care provider may insist that an A&A be ex- ecuted as a condition of providing medical records or as a condition for not pursu- ing immediate collection proceedings against the patient. Authorizations and Assignments can be
very, very bad news for trial attorneys and should be resisted, particularly were one is dealing with a health care provider that can- not be counted upon to be reasonable in the event of serious settlement discussions. Perhaps the ultimate nightmare for a trial attorney was presented in Hernandez v. Suburban Hospital Association, Inc., 319 Md. 226, 572 A.2d 144 (1990). In that case, a trial attorney and his client executed an A&A requested by Suburban Hospital. Before settlement, the plaintiff filed for bankruptcy. The personal injury claim then was settled for $35,000. Later, the hospital sought payment from the plaintiff and from the attorney for its bill of $18,499. The Court of Appeals acknowledged that funds recovered from tort actions are not subject
22
The lesson of Hernandez is that an A&A gives a health care provider much more than what they are entitled to at common law. By common law, the health care provider can sue the patient directly for payment, but not levy on any settlement funds re- ceived. With an A&A, that situation changes dramatically, and the attorney be- comes personally liable if the A&A is not honored. Because of these factors, a trial attorney must resist executing authoriza- tions and assignments. If a health care provider is trying to hold medical records hostage in exchange for the execution of an A&A, then the provider should be directed to Maryland Health General Annotated Code Section 4-303, which requires a health care provider to provide medical records if an appropriate medical authori- zation is submitted. If treatment is being held hostage for an A&A, then the health care provider should be contacted to see if they will remain flexible regarding compro- mising their bill in the event problems develop in the case and serious settlement discussions take place. The A&A should then be modified to reflect this understand- ing, or better yet, the provider’s agreement to accept a letter from the attorney instead should be obtained. If the health care pro- vider is recalcitrant, then the client needs to be made aware of the situation and of the option of obtaining care elsewhere.
I. Balance Billing by Health Care Providers
Not infrequently, a health care provider
will agree to hold its bill pending the reso- lution of a patient’s personal injury claim. However, more and more, the situation that is arising is that a health care pro- vider is accepting payment from a patient’s health insurance and later seeking to have the balance of its bill paid from the pro- ceeds realized from the patient’s personal injury claim. This is becoming increas-
Trial Reporter
ingly common since in an age of man- aged care, there frequently is a very large difference between what a health care pro- vider bills for a particular service and what a health plan pays for that service. Balance billing, however, is specifically
prohibited in many circumstances. As a result, practitioners should always scruti- nize carefully any contentions by a health care provider that they are entitled to bal- ance bill the client, because often, they cannot. With regard to Medicare and Medical Assistance, a health care provider that accepts payment from either of those government plans must accept the pay- ment received as payment in full. Maryland’s HMO statute, Health Gen- eral Section 19-710(o) specifically prohibits a health care provider from bal- ance billing an HMO subscriber. Even in the non-HMO context, many health plans impose limits by contract on what a participating provider can charge for a particular service. Obviously, if an authorization and as- signment is executed, the health care provider will have a much better argument for balance billing than if an A&A is not executed. This is yet another reason for not agreeing to A&As.
J. Carefirst Blue Cross Blue Shield Perhaps the entity which will be en-
countered most frequently in dealing with liens in the State of Maryland is Carefirst Blue Cross Blue Shield. Usually, and for- tunately, they are reasonable. The primary bulk of Blue Cross Blue
Shield’s work is handled by attorney Eu- gene Seidel.5
So long as you ask, his office
has a practice of reducing asserted liens by one-third for attorney’s fees regardless of potential ERISA arguments. In addition, Eugene Seidel has proven to be reasonable repeatedly with my interactions with him in agreeing to reduce liens further in cases of limited insurance coverage or difficult liability or causation issues. That said, even though Blue Cross
Blue Shield may be the one sending no- tice of a lien, Blue Cross Blue Shield may not actually be the entity providing pay- ment. Blue Cross Blue Shield serves as a coordinator for several major employers’ self funded plans. In other words, the em- ployer actually makes the payments for the medical services, and Blue Cr oss Blue Shield acts as an administrator.
These 5
Mr. Seidel’s information is as follows: B&O Building, Two North Charles Street, Suite 320, Baltimore, Maryland 21201; 410-752- 4700.
Spring 2001
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