Medicare & Workers’ Compensation Liens Ten Practical Tips For Each by Dennis F. O’Brien
Dennis O’Brien (Foard, Gisriel, O’Brien & Ward) received hid J.D., cum laude, from the University of Baltimore School of Law. Mr. O’Brien is a trial lawyer. He remains dedicated to protecting the rights of those injured as a result of others’ carelessness and neglect.
Over the last several years, it has be- come increasingly clear that those entities possessing subrogation claims or liens are seeking a larger percentage of money with increasing frequency. With Medicare and workers’ compensation liens, we face statutorily created lienholders who have an interest in our clients’ claims. These liens must be addressed at every stage of the case as they will affect the outcome, as well as the economic viability, of pro- ceeding.
Workers’ Compensation Liens Under Maryland law, an insurer or self-
insurer who pays workers’ compensation benefits has a lien on the recovery that the injured employee obtains from a third person. Labor & Employment Article, Md. Code Ann. ß 9-901. This statute establishes a lien on the recovery and also provides an extension of the statute of limitations for the injured worker. The employer/insurer retains an exclusive right to proceed against the third-party in the first two months after injury. This almost never occurs, but the extension has been interpreted to extend the injured worker’s statute of limitations against the third- party by an equivalent time period. Thus the injured worker has an additional sixty days tacked on to the applicable statute
of limitations (most likely three years). See Hayes v. Wang, 107 Md. App. 598 (1996). The workers’ compensation lien must
be addressed by the attorney representing the injured worker. The workers’ com- pensation carrier has a dollar for dollar lien on any recovery, up to the amount that it has paid, and an offset against fu- ture benefits payments to the extent the injured worker’s recovery is greater than the lien. The lien is satisfied by repay- ment of the lien, with a one-third reduction for attorney’s fees and a pro- rated reduction for the costs associated with the recovery (case expenses). If the recovery is not sufficient to satisfy the lien, payment of the above satisfies the obliga- tion. If the recovery exceeds the lien and there are net proceeds, the workers’ com- pensation insurer will have a “holiday” until the injured worker incurs benefits that exceed the net amount. Only then will the injured worker be entitled to ad- ditional workers’ compensation benefits. It is wise for an attorney handling a third- party case which arises out of a workers’ compensation claim, to think the situa- tion through and plan ahead. Creative approaches and early intervention can re- sult in more favorable treatment, or at the minimum, some level of cooperation and certainty as to how the lien will be re- solved.
My suggested approaches are as follows: 1. Make inquiries with the workers’ compensation carrier early and as- certain whether they have done any investigation and whether they will share the results. Photographs, statements, etc. may be available and can prove invaluable in estab- lishing liability in the underlying case.
2. If the third-party case is likely to be “expense” heavy, attempt to strike an agreement with the work- ers’ compensation carrier to share the expense burden on an ongoing basis. This will help defray the costs of the litigation.
3. Seek and utilize their leverage with the employer to get access to equip- ment, co-employees and other information that might be hard to obtain.
The carriers can often smooth the way for you to visit the site of an accident with an expert and obtain photographs and docu- mentation regarding machinery. Be mindful of the fact you may have a claim against a co-employee and avoid creating a conflict.
4. Have the workers’ compensation carrier provide a lien statement,
(Continued on page 20)
Harry A. Milman, Ph.D.
ToxNetwork.com
Consulting in Toxicology, Carcinogenesis, Pharmacology, and Pharmacy Standard of Care
14317 Bauer Drive Rockville, MD 20853
www.toxnetwork.com
Phone: 301-871-6715 Fax: 301-871-5586
e-mail:
hmilman@toxnetwork.com
18
Trial Reporter
Winter 2006
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