www.schmidtkramer.com

DPW Lien Resolution

By: Joe Chapman Schmidt Kramer PC (717) 888-8888 [email protected]

December 3, 2012

Example 1: the big easy

Tractor Trailer accident with $100,000 of first party benefit and Settlement for $85,000

Responsibility to Give Notice-Twice

• 62 P.S. § 1409(b)(4) & (5) —beginning of claim -- settling the case

What to include in Notice Letter

• Name of client • Social security number of client (last four digits will work) • Date of birth • Address • Date of incident • Type of incident (auto/medical malpractice, premises) •

Injuries sustained (with as much detail as can be provided)*

• Court name and docket, if in suit (if not in suit, tell them) • Name and address of tortfeasor • Name of both first and third party insurers if auto case • Insurance adjusters’ names and phone numbers

Subro Letter

Subro Letter

Injuries

• If at some point you are going to end up arguing treatment was not related and therefore expenses should not be part of the Statement of Claim… • Don’t also include those treatments as part of building your damages for the insurance adjuster.

• DPW may ask you at some point for you demand…Obviously, want to claim the treatment which is related, and leave other parts out.

• Corollary: before claiming a treatment was not

related, review your demand!

VIA FACSIMILE (717) 772-6553

Department of Public Welfare Office of Administration TPL-Casualty Unit P. O. Box 8486 Harrisburg, PA 17105-8486

RE: Client Date of Birth: ____b/d____ SSN: ***-**-8476 Date of Accident: August 10, 2010

Dear Sir or Madam: I write in follow up to my ______date____ letter in which I notified you that the Department may have paid medical bills related to an auto accident on ______date of incident____ for ____client name____.

More specifically, I wanted to outline the injuries that she suffered in that accident so that you can most easily identify bills which were paid related to the accident: right distal intro-articular radius fracture; right wrist injury requiring splinting; disc bulge at L4-L5; back pain requiring physical therapy; back pain requiring steroid injections.

Please also know that we have reached a tentative settlement agreement with the tortfeasor in the case for $___dollar figure___. To that end, I would very much appreciate if you would provide a Statement of Claim so that we can take care of our responsibilities to the Department, as well as move forward on settling the case for our client. Should you have any questions, please telephone me at my office. Thank you.

Very truly yours,

SCHMIDT KRAMER PC

D. Joseph Chapman Attorney at Law

DJC/aww

Notice of settlement

Ethics

Rule 3.2 Expediting Litigation

• A lawyer shall make reasonable efforts to expedite litigation consistent with the interests of the client.

Molasses in December?

DPW – Approximately 27,000 cases being handled – 23 workers to work the cases – those same 23 workers are also attempting to resolve over 12,000 estate reimbursement cases – may take three months to get a statement of claim – they went paperless in March 2010 – in 2011/12 fiscal year they closed $48 million dollars of claims.

Example 2: Achtung!

Small auto case where Plaintiff passed away during the case from problems unrelated to accident.

Review the Statement of Claim

• In this situation, I found that all the claimed expenses DPW had on their statement of claim were dated after the treatment that I claimed in my demand. • Send letter explaining why the expenses are out and send copy of demand.

Send dispute letter

I write having reviewed your Statement of Claim from August of 2012, concerning the Estate of Heather. As you will recall, this office represents her for an auto accident which occurred on February 11, 2010. Heather’s treatment for the injuries she received in the auto accident was limited, and the settlement which is tentatively agreed to with the third party insurer represents that amount of treatment. I have attached our Demand to this letter, so that you can see we claimed medical treatment only up through the latter part of 2010.

I noticed that all of the medical expenses included in your Statement of Claim are for dates of services which are 2011 and later. Please know that Heather was diagnosed with cancer as well as serious problems with her kidneys, which eventually led to her demise in 2012. I do not believe that expenses contained in the Statement of Claim are attributable to the car accident for which we pursued a claim against Erie Insurance. Again as my reasoning I use that all of the treatment claimed in our Demand was through 2010, where all of the medical expenses were for dates of service following January of 2011 in your Statement of Claim. If you would, please review the Statement of Claim expenses and let me know whether you are willing to retract your assertion of a lien in this situation.

Should you have any questions, I would be glad to talk to you about any of the information in my letter. Thank you.

Only Half

• DPW can only take half of your client's settlment. • The one half is calculated on the net after attorney's fees and of costs • It should be taken before paying other outstanding medical bills.

• 62 Pa. C.S.A. 1409(b)(11)

Ethics:

Client concerns: Make sure that you only pay DPW back for expenses that resulted from the accident…especially where comorbidities.

Rule 1.6 Confidentiality of Information

• (a) A lawyer shall not reveal information relating to representation of a client unless the client gives informed consent, except for disclosures that are impliedly authorized in order to carry out the representation, and except as stated in paragraphs (b) and (c).

Example 3: The Thinker

• Pedestrian accident where client is left in vegetative state, limited coverage.

• Client requires continuing government services.

How do you want to handle things?

Or…

Start Early, That is Your stick!

Grinch Pinata

Consider a Special Needs Trust

• Self Funded- 42 U.S.C. §1396p(d)(4)(A) • Pooled- 42 U.S.C. § 1396p(d)(4)(C) • 62 P.S. §1414, Pennsylvania Statute providing for SNTs

Pooled

Options: Todd Belisle The Center for Special Needs Trust Administration 4912 Creekside Drive Clearwater, FL 33760 [email protected]

(877) 766-5331 Arc Community Trust of Pa.

1004 West 9th Ave King of Prussia, PA 19406 Phone: 610-265-4788 Fax: 610-265-4688 [email protected]

Special Needs Trust-Financials

Petition for Settlement and SNT

• • • • • • Part of Bryan’s medical bills were paid by the Commonwealth’s Department of Public Welfare (“DPW”), which has asserted a lien in the amount of $250,757.12. (See DPW statement of claim attached as Ex. I.) In accord with the statutory provisions, DPW is entitled to only 50% of net after counsel fees and costs, 62 P.S. § 1409(b)(11), and Petitioner requests permission to hold in escrow the amount of $17,791.85 in order to resolve the lien with DPW.

Petitioner will request that the Medicare and DPW liens be waived, based on the serious nature of the injury, Bryan’s financial condition, and the hardship which paying the liens would inflict on him.

Bryan currently qualifies for Medicaid benefits, payable through Pennsylvania’s DPW, including medical assistance and assistance with home care. He also receives Social Security Disability payments.

In order to maintain these necessary benefits, as well as any other benefits for which Bryan may be eligible now or in the future, his natural guardian will create a Special Needs Trust. The documents to establish the trust are attached as Ex. J. Petitioner requests this Court’s approve use of the trust and grant permission for Bryan’s natural guardian, Pam, to establish the pooled Special Needs Trust for Bryan Herrick’s benefit.

Petitioner and Petitioner’s counsel believe it is in the best interest of the incapacitated not to have funds owned by Bryan or his natural guardian, Pam with whom he resides, but rather to have the funds placed in a Special Needs Trust.

Petitioner requests the amount to be awarded to the incapacitated Bryan, be distributed to the Trustee of the Special Needs Trust, and Petitioner’s counsel will provide the Court with proof of transfer to the trustee within ninety (90) days of this Court’s approval of the Special Needs Trust.

Is fifty percent too much?

Recall: In the Third Circuit’s Tristani opinion it was concerned about the procedure for a dispute over the amount of the lien.

Sometimes you want to go…

But it doesn’t always work out that way.

•Settlement before suit •Obviously compromised value •Significant lien •Not a minor/incapcitated person/deceased •You want a hearing

DPW Bureau of Hearings and Appeals

http://www.dpw.state.pa.us/dpworganization/officeofadministr ation/bureauofhearingsandappeals/index.htm

Standing Practice Order

http://www.dpw.state.pa.us/foradults/hearingsandappealsprocess/index.htm

Supplemental Manual

http://services.dpw.state.pa.us/oimpolicymanuals/manuals/bop/su/index.htm

• You will find policies on: – Fair hearing – Scheduling the hearing – Conduct of the hearing

Pa. Code Administrative Hearings

55 Pa. Code § 275

Dateline: Friday, November 30, 2012: 3:30pm. Email explaining how it would come about that our clients would be given the opportunity to have an administrative hearing.

Late Breaking News

If there is an indication that the statement of claim is under dispute and consensus cannot be reached, then we refer the case to our legal office for creation of a statement of claim with appeal rights letter. This is not a standard letter in our suite of correspondence as it requires the oversight of legal counsel. The letter includes instructions on how to appeal.

• •

Ethics

Here, you not only had to protect your client’s interest in the claim by making sure the lien is only what it should be…and maybe applying for a waiver or compromise, but also Have to protect against the loss of future government services.

• •

Rule 1.1 Competence

– A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.

Rule 3.1 Meritorious Claims and Contentions

– A lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein, unless there is a basis in law and fact for doing so that is not frivolous, which includes a good faith argument for an extension, modification or reversal of existing law.

Clean Up

If I haven’t said it enough

•Start Early •Treat DPW rep like an adjuster, if they ask you to pull, don’t push.

•Remember what your client wants is the check, after you have told them the case is settled.

•Save the pushing for when it •matters.