Dealing With Liens (Continued from page 23)


fees. In effect, they are seeking to have the benefit of the attorney’s services for free. For these lien holders, attorney’s fees, case expenses, and compromised claim value due to problems with liability or causation are all for the client to deal with, not them, and to hear them tell it, ERISA gives them the right to craft their health plans so that is exactly how things work. As a result, when major lien holders as-


sert a lien, they should be contacted early on and an understanding reached as to how their lien will be handled. They should not be told who the liability carrier is until such an understanding is reached. In dealing with a recalcitrant health


care plan, the attorney should not forget that he or she always has the option of walking away from the case. If a lien holder is going to make pursuit of a claim infeasible, then the attorney should tell the lien holder exactly that and send a let- ter confirming that because of the lien holder’s lack of cooperation, the attorney cannot pursue the case. The attorney may wish to suggest that since the lien holder is taking the position that the case prima- rily is for the benefit of the lien holder, it would be a conflict of interest for the at- torney to be hired by the injured person but in effect wind up working primarily for the lien holder. Health care plans frequently reserve the right in their plans to pursue a personal injury action on be- half of their policy holder, and so the attorney may wish to suggest to the lien holder that they hire counsel to handle the claim for themselves and their policy holder, advising of the applicable statute of limitations in the process. Frequently, a difficult health plan backs down when presented with that option. While they frequently reserve the right in their plans to pursue a personal injury action on be- half of their policy holder, they virtually never do so. They are not interested in hiring attorneys, they are not interested in laying out the expenses, and they cer- tainly are not interested in incurring the risk of being sued by their policy holders for screwing up their cases and not ad- equately protecting their interests.


If a


lien holder’s representatives are presented with a credible threat that the claim will not be presented by the policy holder’s attorney unless they compromise, often they will respond. Such a threat is cred- ible, however, only if it is sincere and made early on before suit has been filed.


24


Negotiate Liens Before Settling the Case In negotiating with health care plans, it is important to recognize that the ne- gotiations with them must take place before the case is settled in order to be effective. The only real leverage that the injured person has over the health care plan is to hold up settling the case. Once the case has been settled and money is in hand, leverage for negotiation is lost.


5. The Collateral Source Rule: How Managed Care Can Help


An important point to remember in dealing with the lien game is that regard- less of whether or not a lien is being asserted for a particular item of special damages in the case, the full amount of that item is admissible in evidence and recoverable under the collateral source rule.7


SeeMaryland Pattern Jury Instruc-


tion 10:8. Thus, even where medical expenses have been paid gratuitously by a third party, evidence concerning the fair and reasonable value of those medical ex- penses is admissible in evidence, and those amounts are recoverable by the Plaintiff. Plank v. Summers, 203 Md. 552, 102 A.2d 262 (1954). At the same time, many health plans require health care providers to accept less than what they have billed as payment in full. The net effect is that if a health care provider charges $5,000 for a particular medical service but is re- quired by a health plan to accept $3,000 as payment in full, $5,000 can be claimed in the personal injury action, but the lien for that expense is only $3,000 and the provider cannot balance bill. In these situ- ations, it is perhaps easier to accept a health plan taking the position that is has ERISA preemption and will only reduce its lien by, for example, twenty percent. Even under those circumstances, the plaintiff, in effect, will still be paying less than fifty cents on the dollar for the medi- cal treatment which they received.


7


With regard to medical negligence cases, the collateral source rule has been modified by statute. Under CJ 3-2A-05(h) and 3-2A- 06(f), following a judgment in favor of a plaintiff, a panel chairman or trial judge is authorized to reduce the amount of an aware or judgment to the extent that the claimant has been or will be paid, reimbursed, or in- demnified by a collateral source. However, this statute contains several exceptions, and ERISA preemption would preempt the ap- plication of this statute to any self funded employment based health plan.


Trial Reporter


6. Evaluate Carefully What Medical Expenses Are Claimed The other factor taken into account with liens is that sometimes it is wise to be careful what expenses are claimed on behalf of the client. If the attorney is faced with limited insurance coverage and seri- ous injury, it may be wise to take a very conservative view as to what medical ex- penses are causally related to the underlying claim. The lien can only exist for medical expenses for which the tortfeasor is responsible. Within reason, there cannot be a contention of a causal linkage for a particular medical expense if the plaintiff is not claiming that in their action. Some practitioners will argue that this position can be taken to an extreme so that if the plaintiff chooses not to claim any medical expenses, then there is no lien. It is suggested that such a position is too aggressive since it might leave the plaintiff vulnerable to having medical ex- penses sought from them later on the basis that medical expenses were causally related and that causal linkage cannot be elimi- nated by a willful decision not to claim the reasonable expenses in the underly- ing cause of action.


7. “Share the Pain” Negotiation Tactics


With regard to negotiation tactics, in


the event that there are health care pro- viders who can balance bill, it is often very important in the process of settlement dis- cussions to obtain concessions from a number of different health care providers at the same time. The approach which is recommended is to send a joint letter to all of the health care providers who have open bills, identifying for each of them the open balances which everyone else has and then proposing a uniform percent- age reduction in their bills. This approach is typically every effective if the attorney, in turn, also offers to reduce his or her attorney’s fee.


8. When the Lien is Resolved, Be Sure to Kill It


Any time payment is issued in satis- faction of a lien, it is recommended that the check be marked as “accepted as full and final payment” on the back where it will be endorsed or stamped. Addition- ally, in dealing with a health care plan, it is recommended a letter be sent identify- ing the payment “as full and final payment with the understanding that the plaintiff’s health insurance coverage remains in full force and effect.”


Spring 2001


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