Transcript Slide 1

WE ALL NEED SOMEONE
TO LIEN ON
Surviving In the Lien Jungle
LIEN TYPES
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STATUTORY
Government
 Private
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CONTRACTUAL
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e.g. Chiropractor
FEDERAL LIENS
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Uncle Sam Needs You(r) Money
MEDICARE
(42 USC 11395 y(B))
Notice Requirements:
Statute of Limitations: 3
years
Priority over other liens
Effect of Failure to Pay:
Double Damages
MEDICARE DON’T CARE
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If you say settlement was made without
admission of fault
Payments were for “pain and suffering”
Plaintiff’s verdict will be reduced by
comparative fault
You didn’t have notice of their lien
Query? $100,000 lien and $5,000
settlement
Radioactive Equals Proactive
Plaintiff’s age
 Payor in Medical Charts
 Call Medicare
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MEDICARE NUMBERS TO
CALL
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MSP Guideline Questions and Other
Legal Issues:
Maria Mendoza, MSP Guideline
Supervisor: (805) 367-1051, Fax:
(805) 367-1155
 Lori Cudahy, Third Party Liability
Department: (805) 367-1052
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HOW TO PROTECT AGAINST
MEDICARE LIEN
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1. Put Medicare on Check
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2. Have Plaintiff’s attorney obtain letter
authorizing payment to him
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3. Contact Medicare directly
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4. Have plaintiff’s attorney indemnify
company
Hospitals Can Opt Out of
Medicare
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If They Accept Medicare Payments,
Cannot Assert Lien
Negotiation Tip #1
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Plaintiff’s 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
REAL LIFE EXAMPLE
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Example: 61 y/o bicycle rider hit by car and
has hip replacement.
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Medicare reduction: $28,000 to $9,000.
How much can plaintiff claim in his lawsuit
against you?
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Can the hospital come after you or the
plaintiff for the difference?
HOW TO ACHIEVE HERO STATUS
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If Hospital Accepted Medicare
Payment, plaintiff can’t collect more
than amount paid
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Hospital Can’t Claim More
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Your Hammer In Negotiations
“I’LL BE BACK” (FOR YOUR
MONEY)
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
 Plaintiff’s comparative fault: N/A
 Protect: Always
 Ahlborn v. Arkansas Dept. of Health
Services(2006)
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OLSZEWSKI v. SCRIPPS
OLSZEWSKI V. SCRIPPS
 CALIFORNIA SUPREME COURT
 Overturns provider’s right to refund
Medi-cal and go after any recovery
obtained by plaintiff from third party
defendant.
 Windfall for insurers.
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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
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Nishihama
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Case Summary
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Plaintiff’s argument: Hospital can still come
after me.
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Court: Hospital has already been paid in full
per its agreement with HMO
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Case Closed?
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Did Defense Get Hanif wrong?
Greer
Full Amount of Medical Bills
Admissable
 Post Verdict Adjustment
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Katiuzhinsky
Finance Company Lien
 Full Amount Admissible Without
Reduction
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Olsen v. Reid
Knock, Knock, Knocking On Hanif’s
Door
 Collateral Source
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Quagmire
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HOSPITAL LIENS
Civil Code 3045 et.seq.
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History: Hospitals win one
1992 CC 3045
Expands Hospital’s Right to Recover
Includes All treatment, not just
emergency room treatment
Maximum: 50% of plaintiff’s recovery
Notice? Yes
Statute: One year from treatment
You must protect
HYPOTHETICAL #1
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Hypo: $50,000 in medical bills. $15,000
policy.
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Timely Lien Notice From Hospital
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Paid Out Policy With Honoring Lien.
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Do you keep your job?
BACON SAVED
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Mercy Hospital v. Farmers(1997)
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Hospital only entitled to ½ of
what the plaintiff got or $7,500.
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If that happens, you can still
resort to the Release.
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Check your release language
SEEKING THE “CONTRACTUAL
DIFFERENCE” : THE NEW
BATTLEGROUND
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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
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
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How To Calculate
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Costs to perfect lien(minimal) plus either:
1. Amount actually paid to providers(noncapitated 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.
Kaiser’s charges can be way out of line)
After Determining Amount of Lien
Subtract the Following
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1. Reduction if attorney fees
2. Reduction for plaintiff’s comparative
fault.
3. Maximum cannot exceed:
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1/3 of amount due to p if attorney
involved
½ due plaintiff if no attorney
Made Whole Doctrine
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Make First Party Med Pay Go Away
WHY YOU NEED TO KNOW
THIS
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“I GOT ALL THESE LIENS I HAVE TO
PAY BACK”
HYPOTHETICAL(EASY)
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$15,000 settlement
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Attorney Fees and Costs $5,000
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Medical Lien(3040) $15,000
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How much does HMO get back?
Hypothetical(MEDIUM)
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$15,000 settlement
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No comparative fault
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Attorney Fees and Costs: $5,000
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Emergency Room $7,500
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How much will plaintiff get?
Hypothetical(Who the hell
knows?)
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$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.
Bonus Point Hypothetical
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$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
WHY YOU NEED TO KNOW
THIS #2
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You Can Negotiate Directly!
ERISA
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Sereboff
All Other Medical Liens
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Chiropractors,
acupuncturists, massage
therapists, witch doctors,
faith healers.
All subject to negotiation
A problem for the plaintiff
and his attorney
They can’t come after you
Attorney Liens
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Must protect
WORKER COMPENSATION
LIENS
Labor Code §3852
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Employer may recover from 3rd
party tortfeasor total amount of
compensation paid.
Labor Code §3865
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3rd party judgment or settlement is
subject to lien of Employment
Development Department.
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
employee’s injury was the proximate
result of the employer’s act.
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Attorney Fee and Priority Issues
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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.
Gapusan v. Jay (1998) 66 Cal. App.
4th 734.
 An employer’s right to
reimbursement takes priority over
the employee’s recovery and may be
asserted after fees and costs are
deducted.
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How do I get the ?@*# Intervenor to
reduce the Workers’ Compensation lien?
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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 worker’s injuries are
caused by the tortious conduct of both the
employer and a 3rd party. The employer’s
share of the fault is not attributed to the
3rd party defendant when calculating noneconomic damages.
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Kemerer v. Challenge Milk Co.
(1980) 105 Cal. App. 3d 334.
Plaintiff’s negligence not imputed to
employer for lien reduction
purposes.
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In order to determine amount of
intervenor’s potential recovery,
“Threshold Level” must be
established per Associated
Construction and Engineering Co. v.
WCAB (1978) 22 Cal. 3d 829.
“Threshold Level”
Employer negligence % as
established by Jury X Total Damage
Award determines Workers’ Comp.
Carrier’s 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.
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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.
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Purchase of Lien/
Assignment of Lien
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Hone v. Climatrol Indus. (1976) 59
Cal. App. 3d 513. Court approves
concept of lien assignments.
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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.
Be Careful!
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Raisola v. Flower Street, Ltd. (1988)
205 Cal. App. 3d 1004. Employee’s
attorney entitled to fee from lien
assigned to 3rd party when employee
prevailed in 3rd party case.
HOW TO CONTACT US

Bradley Bostick:Bradley
[email protected]

Christine & Shawn Friestad:
[email protected]

Greg Stanfield:
[email protected]