HEALTH CARE OBLIGATIONS WHEN SETTLING A PERSONAL INJURY CASE
FEDERAL, STATE AND PRIVATE
Under the laws of most states, when a plaintiff receives a personal injury settlement, he or she must use part of that settlement to pay back whoever paid for the medical care needed to treat the injury, whether it’s the government, your employee health plan, or your health insurance company. These health care “liens” or “reimbursement obligations” are now a part of almost all personal injury settlements. Yet many plaintiffs are not aware that they may have such obligations when they settle their personal injury case. Courts, defendants, and health care providers are placing stronger emphasis on satisfying health care liens related to a personal injury settlement. Laws and regulations, and the healthcare coverage policies that interpret them, often place the burden on the plaintiff to verify whether or not a health care provider has a lien and, if so, to resolve it. Therefore, as a plaintiff, you should take a few moments to make sure you understand your health care benefits, your obligations and your rights. Doing so will ensure that your personal injury claim best serves you by proactively evaluating and resolving the health care provider’s interest in the most efficient and favorable fashion as well as providing for your continued access to good quality health care.
What is a Lien?
We often think that healthcare coverage is meant to pay for all of our medical needs, no matter what the cause. However, the concept behind health care liens in personal injury settlements is that the responsible/negligent party should pay the medical bills. Therefore, regardless of your past premiums, co-pays or deductibles, if a third party (i.e a “defendant” in a personal injury claim) is liable for your injury, that third party ultimately should pay for your medical bills, not your health care provider. Most healthcare plans, whether provided by the government (federal or state programs) or by your employer, create their right to a claim or lien on any settlements when you originally became entitled and accepted coverage. This right of recovery is disclosed within the plan documents, but many individuals are not be aware of this or even think about it because most never foresee themselves a victim of a personal injury event.
A health care provider’s lien is typically focused solely on injury-related medical expenses paid for from the date of the injury through the date of settlement.
What are the Different Types of Health Care Providers?
As mentioned above, any health care plans’ right of recovery is disclosed in the plan documents. The first order of businesses is to have a strong grasp of the type(s) of coverage you currently receive or expect to rely upon in the future. Within the U.S., there are numerous ways for obtaining health care coverage. This document describes three of the most prevalent: Medicare, Medicaid, and private health insurance. Medicare is the federal government’s healthcare program, it provides healthcare for those 65 or older or those under 65 who are disabled, suffering from permanent kidney failure, or diagnosed with Lou Gehrig’s disease. Medicaid is the state government’s needs-based healthcare program. Each state administers its own program; therefore the laws for each program may vary. For the government programs, reimbursement obligations or liens arise from statutes. This occurs as soon as a recipient of government (state or federal) healthcare receives the first dollar of coverage. Private
insurance is administered by many different insurance companies. Most Americans on private insurance get their coverage through their employer. For this type of insurance, lien obligations arise out of a pre-existing contract between the client and health plan.
This settlement planning guide focuses on clients who are settling a personal injury case and who are receiving health insurance coverage through a private (employer based) health care plan.
Employee Health Coverage: What Is It and What Are The Rules?
You may receive health and medical insurance coverage through your employment. If, as a result of your injuries, you have received medical care paid for by your employee health plan, the health plan may be entitled to reimbursement for those expenses from any settlement you receive. This is called subrogation or third-party reimbursement, and a lien may be placed on your settlement by your employee health plan.
What is Your Obligation as a Beneficiary of an Employee Health Plan?
Unlike the governmental health plans discussed above, any obligation you may have under an employee health plan is determined by the language contained within the plan or policy. You should have a copy of this document, which must be given to you by your employer under federal law. If you cannot find your copy, request one from your employer immediately.
Search the plan document or policy for any section entitled “Subrogation,” “Third Party Liability,” “Third Party Reimbursement,” or something similar. This section will describe what rights the employee health plan may have to impose a lien upon your settlement. It may also state what your obligations are as a beneficiary to cooperate in that effort. Employee health plans will often contain provisions to reduce or eliminate your medical coverage if you fail to cooperate.
For this reason, it is important that any lien rights held by your employee health plan be addressed as a part of your settlement. As soon as you have found the plan document, deliver a complete copy to your attorney and discuss any questions you may have concerning the contents of the document.
What Can Be Done To Ensure the Most Favorable Result?
Your attorney and his or her firm dedicate their time to maximizing any settlement you may receive. However, the rules surrounding healthcare liens concern a different area of the law requiring a different focus. Both private and governmental healthcare liens constitute a complex field with potential impact on future health care coverage for you and your family.
The Garretson Law Firm’s dedicated staff has a sound knowledge of these developing laws and legal processes and can help resolve these matters in your best interest. The Garretson Firm’s experience helps to provide you with the best result, maximizing your recovery and protecting your health benefits.
What does this all mean to you, the plaintiff?
As mentioned, you may have obligations to a governmental healthcare program or your employee health plan if it has paid for medical care resulting from your injuries. The Garretson Firm helps both you and your attorney to satisfy these obligations, to protect your healthcare coverage, and to resolve any lien in your best interests to help maximize your settlement.
Conclusion
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Your attorney has taken all the above mentioned issues into account and has committed to securing the most favorable results for you. These efforts include having the resources with the appropriate skills to both evaluate your health care provider’s right of recovery and satisfy their interest in the most efficient and favorable fashion. By providing you with these materials, it is evident that your attorney is committed to making sure you are aware of the obligations associated with your health care plan. Please be aware the firm has a formalized means of addressing these issues and we ask that you do not duplicate the efforts as it could lead to significant delays.
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We trust you find this guide beneficial and that it provides you a peace of mind that your attorney has taken into consideration your best interest in both securing the best results in your settlement and your continued access to quality health care.
