by Thomas D. Begley, Jr., CELA
Prior to making distribution in the settlement of a class action or mass tort lawsuit, a number of lien issues may need to be addressed, depending on the nature of the case, the elements of the recovery, and the population of claimants. These issues may include reimbursement claims asserted by Medicaid, Medicare, Medicare Advantage and Prescription Drug Plans, ERISA Plans, Federal Employee Health Benefits, Federal Medical Care Recovery Act, Veterans Administration and TRICARE Claims, Welfare Liens, Mental Health Liens, Traumatic Brain Injury Fund, Catastrophic Illness and Children’s Relief Fund, Victims of Crime Compensation, State Worker’s Compensation Claims, Federal Employee Compensation Act, Hospital Liens, Child Support and Division of Disabilities (DDD).
It is important to understand the differences between these two related concepts.
Liens are generally enforceable against the settlement of the injured party on whose behalf benefits are paid, but it is unlikely they are enforceable against proceeds of derivative claims of others arising from the incident.[1] For example, wrongful death claims would not generally be subject to liens because they are property of persons other than the decedent; in contrast, a survival claim, as property of a decedent’s estate, may be subject to a lien.[2] Similarly, allocation of loss of consortium claims to those who do not have responsibility for medical bills, such as a spouse or child of an injured party, may in some circumstances serve to reduce the amount attachable by a health care lien.
As a condition of Medicaid eligibility, a Medicaid applicant is required to assign to the state any rights to payment of medical care from any third party.[3] This is essentially a statutory right of subrogation. Federal law further requires that each state Medicaid program have procedures for determining the legal liability of third parties to pay for medical assistance provided by the state’s Medicaid plan, and for reimbursement of the cost of medical assistance provided, whenever recovery is feasible.[4] In New Jersey, the Attorney General is responsible for enforcing any rights against third parties or recovery of liens.[5] When an individual brings an action for damages against a third party, written notice must be given to the director of the Division of Medical Assistance and Health Services. In addition, such individual must promptly notify the Division of any recovery from a third party. The recipient of a third-party recovery must immediately reimburse the division from the proceeds of any settlement, judgment, or other recovery.[6]
A Medicaid lien applies only to the extent of medical assistance related to the injury and only to payments made from the date of the injury to the date of the settlement.
There are two ways to reduce a Medicaid lien.
The Medicare Secondary Payer Act (MSPA) governs all claims for recovery of Medicare payments for accidents or injuries.[9] Under the MSPA the federal government has a statutory lien.
Medicare will grant a credit against its reimbursement claim for a proportionate share of the necessary procurement costs incurred in obtaining the underlying personal injury settlement. Procurement costs are court costs and attorneys’ fees.[14] The attorneys’ fees and expenses are calculated as a percentage of the total settlement sum and serve as the same percentage reduction of the conditional payment amount (total attorneys’ fees and costs/total settlement amount = percent reduction).
Cases will be compromised where there is questionable liability. In such cases, counsel notifies Medicare of the strengths and weaknesses of the defendant’s case in order to justify a reduction of the Medicare claim. The beneficiary is entitled to an appeal of an adverse decision on the request for waiver or compromise pursuant to § 870c of the Social Security Act. The request can be pre- or post-settlement. Requests for compromise must be accompanied by the amount of the pre-settlement offer.[15]
[1] Admin. Comm. of Walmart Stores, Inc. v. Gamboa, 479 F.3d. 538 (8th Cir. 2007).
[2] Bradley v. Sebelius, 621 F.3d 1330 (11th Cir. 2010).
[3] 42 U.S.C. § 1396k(a)(1)(A); N.J.S.A. 30:4D-7.1(c).
[4] 42 U.S.C. § 1396a(a)(25)(A), (B), (H).
[5] N.J.S.A. 30:4D-7.1(a).
[6] N.J.S.A. 30:4D-7.1(b).
[7] N.J.S.A. 30:4D-7.1(b).
[8] Arkansas Dept. of Health and Human Servs. v. Ahlborn, 126 S. Ct. 1752 (2006).
[9] 42 U.S.C. § 1395y(b)(2).
[10] 42 U.S.C. § 1395y(b)(2)(B).
[11] 42 U.S.C. § 1395y(b)(2)(B); 42 C.F.R. § 411.24(b).
[12] 42 C.F.R. § 411.24(c)(2).
[13] 42 C.F.R. § 411.24(g).
[14] 42 C.F.R. § 411.37c.
[15] 42 U.S.C. § 1395y.
The post LIEN RESOLUTION IN PERSONAL INJURY CASES PART 1 first appeared on SEONewsWire.net.]]>by Thomas D. Begley, Jr., CELA
Prior to making distribution in the settlement of a class action or mass tort lawsuit, a number of lien issues may need to be addressed, depending on the nature of the case, the elements of the recovery, and the population of claimants. These issues may include reimbursement claims asserted by Medicaid, Medicare, Medicare Advantage and Prescription Drug Plans, ERISA Plans, Federal Employee Health Benefits, Federal Medical Care Recovery Act, Veterans Administration and TRICARE Claims, Welfare Liens, Mental Health Liens, Traumatic Brain Injury Fund, Catastrophic Illness and Children’s Relief Fund, Victims of Crime Compensation, State Worker’s Compensation Claims, Federal Employee Compensation Act, Hospital Liens, Child Support and Division of Disabilities (DDD).
It is important to understand the differences between these two related concepts.
Liens are generally enforceable against the settlement of the injured party on whose behalf benefits are paid, but it is unlikely they are enforceable against proceeds of derivative claims of others arising from the incident.[1] For example, wrongful death claims would not generally be subject to liens because they are property of persons other than the decedent; in contrast, a survival claim, as property of a decedent’s estate, may be subject to a lien.[2] Similarly, allocation of loss of consortium claims to those who do not have responsibility for medical bills, such as a spouse or child of an injured party, may in some circumstances serve to reduce the amount attachable by a health care lien.
[1] Admin. Comm. of Walmart Stores, Inc. v. Gamboa, 479 F.3d. 538 (8th Cir. 2007).
[2] Bradley v. Sebelius, 621 F.3d 1330 (11th Cir. 2010).
The post LIEN RESOLUTION IN PERSONAL INJURY CASES first appeared on SEONewsWire.net.]]>