WE ALL NEED SOMEONE TO LIEN ON

1
WE ALL NEED SOMEONE TO LIEN ON

• Surviving In the Lien Jungle

2
LIEN TYPES

• STATUTORY
• Government
• Private
• CONTRACTUAL
• e.g. Chiropractor

3
FEDERAL LIENS

• Uncle Sam Needs You(r) Money

4
MEDICARE (42 USC 11395 y(B))

• Notice Requirements
• Statute of Limitations 3 years
• Priority over other liens
• Effect of Failure to Pay Double Damages

5
MEDICARE DONT CARE

• If you say settlement was made without admission
  of fault
• Payments were for pain and suffering
• Plaintiffs verdict will be reduced by
  comparative fault
• You didnt have notice of their lien
• Query? 100,000 lien and 5,000 settlement

6
Radioactive Equals Proactive

• Plaintiffs age
• Payor in Medical Charts
• Call Medicare

7
MEDICARE NUMBERS TO CALL

• MSP Guideline Questions and Other Legal Issues
• Maria Mendoza, MSP Guideline Supervisor (805)
  367-1051, Fax [phone]
• Lori Cudahy, Third Party Liability Department
  [phone]

8
HOW TO PROTECT AGAINST MEDICARE LIEN

• 1. Put Medicare on Check
• 2. Have Plaintiffs attorney obtain letter
  authorizing payment to him
• 3. Contact Medicare directly
• 4. Have plaintiffs attorney indemnify company

9
Hospitals Can Opt Out of Medicare

• If They Accept Medicare Payments, Cannot Assert
  Lien

10
Negotiation Tip 1

• Plaintiffs negotiation options with Medicare
• Reduced by procurement costs and attorneys
  fees.
• Reduced or waived if little possibility of
  recovery
• If you negotiate directly with Medicare, argue a
  reduction on that basis

11
REAL LIFE EXAMPLE

• Example 61 y/o bicycle rider hit by car and has
  hip replacement.
• Medicare reduction 28,000 to 9,000. How much
  can plaintiff claim in his lawsuit against you?
• Can the hospital come after you or the plaintiff
  for the difference?

12
HOW TO ACHIEVE HERO STATUS

• If Hospital Accepted Medicare Payment, plaintiff
  cant collect more than amount paid(Hanif,
  Nishimura)
• Hospital Cant Claim More
• Your Hammer In Negotiations

13
ILL BE BACK (FOR YOUR MONEY)
14
MEDI-CAL (Wel. And Ins. Code 14124.71-14124.791)

• Notice MUST NOTIFY MEDI-CAL
• SOL 3 years from date of settlement,judgement or
  award
• Plaintiffs comparative fault N/A
• Protect Always

15
NEW LAW ALERTOLSZEWSKI

• OLSZEWSKI V. SCRIPPS(6/2/03)
• CALIFORNIA SUPREME COURT
• Overturns providers right to refund Medi-cal and
  go after any recovery obtained by plaintiff from
  third party defendant(not against 3rd party
  directly)
• DECISION GOOD FOR INSURERS
• Reinforces Hanif

16
HANIF

• Case summary
• Issue Can plaintiff make a claim for the amount
  of medical expenses billed or only what was paid?
• Held Can only claim amount that Medi-cal
  actually paid.
• Windfall For Insurance Companies

17
LEGISLATIVE RESPONSE?

• Supreme Court We urge the Legislature to remedy
  this anomaly in a manner consistent with federal
  law.
• Until that happens, continue to use Hanif.

18
Nishihama

• Case Summary
• Plaintiffs argument Hospital can still come
  after me.
• Court Hospital has already been paid in full per
  its agreement with HMO
• Windfall? Yes
• Case Closed?

19
Quagmire

20
HOSPITAL LIENSCivil Code 3045 et.seq.

• History Hospitals win one
• 1992 CC 3045
• Expands Hospitals Right to Recover
• Includes All treatment, not just emergency room
  treatment
• Maximum 50 of plaintiffs recovery
• Notice? Yes
• Statute One year from treatment
• You must protect

21
HYPOTHETICAL 1

• Hypo 50,000 in medical bills. 15,000 policy.
• Timely Lien Notice From Hospital
• Paid Out Policy With Honoring Lien.
• Do you keep your job?

22
BACON SAVED

• Mercy Hospital v. Farmers(1997)
• Hospital only entitled to ½ of what the plaintiff
  got or 7,500.
• If that happens, you can still resort to the
  Release.
• Check your release language

23
SEEKING THE CONTRACTUAL DIFFERENCE THE NEW
BATTLEGROUND

• Definition
• Historical Overview (Nishihama)
• Swanson v. St. John Medical Center
• McMeans v. Scripps Health Parnell v. Adventist
  Health System
• Implications to Insurers
• The Bottom Line

24
HMOs Civil Code 3040

• Newest Statute in the pantheon
• Purpose limit balance billing
• Who It Applies To Includes Kaiser, Blue Cross,
  Insurance Companies, IPAs or medical groups.
• Limits Recovery
• Only Applies To Plaintiffs
• Formula Alert

25
How To Calculate

• Costs to perfect lien(minimal) plus either
• 1. Amount actually paid to providers(non-capitated
  plans)
• 2. 80 of the usual and customary charges by
  non-capitated providers in the area(capitated
  plans)
• Example capitated v. non-capitated
• Challenge usual and customary(eg. Kaisers
  charges can be way out of line)

26
After Determining Amount of LienSubtract the
Following

• 1. Reduction if attorney fees
• 2. Reduction for plaintiffs comparative fault.
• 3. Maximum cannot exceed
• 1/3 of amount due to p if attorney involved
• ½ due plaintiff if no attorney

27
WHY YOU NEED TO KNOW THIS

• I GOT ALL THESE LIENS I HAVE TO PAY BACK

28
HYPOTHETICAL(EASY)

• 15,000 settlement
• Attorney Fees and Costs 5,000
• Medical Lien(3040) 15,000
• How much does HMO get back?

29
Hypothetical(MEDIUM)

• 15,000 settlement
• No comparative fault
• Attorney Fees and Costs 5,000
• Emergency Room 7,500
• How much will plaintiff get?

30
Hypothetical(Who the hell knows?)

• 15,000 settlement offer
• Plaintiff 25 at fault(defense assessment)
• Attorney Fees and Costs 5,000
• HMO lien(3040) 10,000
• How much does HMO get?
• Answer subtract fee(9,000)
• Subtract 50 comparative fault 1,500
• 50 of that is 750.00
• NOTE Plaintiff attorney negotiations with 3040
  providers can be very imaginative.

31
Bonus Point Hypothetical

• 15,000 settlement
• 5,000 in attorney fees
• 10,000 in AAA first party med pay
• 10,000 hospital
• 5,000 HMO
• How much will plaintiff get?
• Answer 5,000
• How much will hospital get?
• Answer 3,330
• HMO 1,670

32
WHY YOU NEED TO KNOW THIS 2

• You Can Negotiate Directly!

33
All Other Medical Liens

• Chiropractors, acupuncturists, massage
  therapists, witch doctors, faith healers.
• All subject to negotiation
• A problem for the plaintiff and his attorney
• They cant come after you

34
Attorney Liens

• Must protect

35
WORKER COMPENSATION LIENS
36
Labor Code 3852

• Employer may recover from 3rd party tortfeasor
  total amount of compensation paid.

37
Labor Code 3865

• 3rd party judgment or settlement is subject to
  lien of Employment Development Department.

38
Government Code 20250-20255

• Right of Public Employees Retirement System to
  subrogate.
• Also see McQuillan v. Southern Pacific Co. (1974)
  40 CA 3d 802. PERS cannot subrogate where the
  employees injury was the proximate result of the
  employers act.

39
Attorney Fee and Priority Issues

• Quinn v. State of California (1975)
• 15 Cal. 3d 162. Active litigant can force
  passive litigant to pay share of costs and fees
  common fund doctrine.

40

• Gapusan v. Jay (1998) 66 Cal. App. 4th 734.
• An employers right to reimbursement takes
  priority over the employees recovery and may be
  asserted after fees and costs are deducted.

41
How do I get the ?_at_ Intervenor to reduce the
Workers Compensation lien?

• Understanding proportionate fault might help.
• Da Fonte v. Upright, Inc. (1992) 2 C 4th 593.
  Civil Code 1431-1431.5 must be applied where
  the workers injuries are caused by the tortious
  conduct of both the employer and a 3rd party.
  The employers share of the fault is not
  attributed to the 3rd party defendant when
  calculating non-economic damages.

42

• Kemerer v. Challenge Milk Co. (1980) 105 Cal.
  App. 3d 334. Plaintiffs negligence not imputed
  to employer for lien reduction purposes.

43

• In order to determine amount of intervenors
  potential recovery, Threshold Level must be
  established per Associated Construction and
  Engineering Co. v. WCAB (1978) 22 Cal. 3d 829.

44
Threshold Level

• Employer negligence as established by Jury X
  Total Damage Award determines Workers Comp.
  Carriers recovery.
• i.e. If verdict 1,000,000 and Employer Fault 40
  (1,000,000 X 40 400,000) employer lien
  100,000, employer gets no recovery.

45
Labor Code 3854

• If action is prosecuted by the employer alone,
  payments shall be considered as proximately
  resulting from such injury or death
• Please see Breese v. Price (1981) 29 Cal. 3rd 923
  3rd party defendant can challenge lien by
  arguing proximate cause.

46
Purchase of Lien/Assignment of Lien

• Hone v. Climatrol Indus. (1976) 59 Cal. App. 3d
  513. Court approves concept of lien assignments.

47

• Quinn v. Warnes (1983) 144 Cal. App. 3d 309. 3rd
  party defendant entitled to deduction for full
  amount of lien, not just consideration paid for
  lien when lien assigned to defendant.

48
Be Careful!

• Raisola v. Flower Street, Ltd. (1988) 205 Cal.
  App. 3d 1004. Employees attorney entitled to
  fee from lien assigned to 3rd party when employee
  prevailed in 3rd party case.

49
HOW TO CONTACT US

• Bradley BostickBradley Bostick_at_aol.com
• Christine Shawn Friestad Friestad_at_friestad.com
  
• Greg Stanfield GStanfield_at_HannaBrophy.com