Maximizing Your Net Settlement
by Reducing Medical Liens:

There are several ways to maximize your bicycle injury settlement. Let’s talk about a couple.

A current hot legal issue is whether you have to repay your health care insurance company from your settlement proceeds. The health care companies assert they have a contractual right to recovery in their plan. They want any medical bills they paid reimbursed. It seems odd the insured (you) has to repay his insurance company. After all, you loyally paid premiums for coverage and would expect to receive a benefit in exchange for the premiums you paid. That’s why your paid premiums in the first place. Reimbursement is not fair, because this will reduce your net settlement. A recent case entitled Shereboff v. Mid-Atlantic Medical Services, Inc. (2006) 126 S. Ct. 1869 has discussed this issue and the interplay between consumer friendly Federal Erisa legislation that historically exempted repayment.

The US Supreme Court has held that an Erisa plan can seek reimbursement from the insured’s settlement of a lawsuit, provided it can place a lien on an “identifiable account”.

More specifically, the lien recovery companies will argue that if the injury victim or his lawyer is in possession and control of settlement funds when the lien is asserted then there is an asset to enforce an equitable right of reimbursement. So, timing and distribution of your settlement, as well as a lien reduction, are factors to consider with your experienced trial lawyer.

Having an experienced trial attorney can often help you negotiate a lien reduction based on the attorney’s rate of recovery. This savings (i.e. a 33% reduction) can be passed on to the injured client.

There’s also another lien reduction theory, called the “made whole” doctrine. If the injured party is not made whole due to low insurance policy limits by the wrong doer, it can be argued the victim should not have to reimburse settlement funds to the health insurance company. This would be inequitable. So, a “waiver” of repayment may be in order. (Should you have a “medical payment” coverage provision on your auto policy – these same negotiation strategies may apply).

A second form of attack on your settlement can come from a statute called Civil Code section 3045 et al. This allows a medical provider like a hospital (as opposed to a health care insurance company) to recover up to half of your recovery. I always argue their recovery begins after attorney fees and litigation costs are paid. This protects your settlement fund. (Where as, uninsured – underinsured motorist cases can be totally exempt from repayment, it depends on the insurance contract.)

In conclusion - learning how to identify the type of lien asserted and negotiate around different types of liens requires an experienced lawyer who has studied this complex ever changing area of law.

Since 1983 I have watched this area of law evolve. Knowing the lien laws nuances’ has helped save clients thousands of dollars.

I take pride in maximizing your net settlement recovery by working out a reasonable settlement strategy for you and or your loved ones.

Ride safe, ride strong.
 

This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. Persons accessing this site are encouraged to seek independent counsel for advice regarding their individual legal issues.