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					WE ALL NEED SOMEONE
          TO LIEN ON
    Surviving In the Lien Jungle
LIEN TYPES
   STATUTORY
     Government
     Private



   CONTRACTUAL
       e.g. Chiropractor
FEDERAL LIENS
   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
   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
MEDICARE NUMBERS TO
CALL
   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
HOW TO PROTECT AGAINST
MEDICARE LIEN
   1. Put Medicare on Check

   2. Have Plaintiff’s attorney obtain letter
    authorizing payment to him

   3. Contact Medicare directly

   4. Have plaintiff’s attorney indemnify
    company
Hospitals Can Opt Out of
Medicare
   If They Accept Medicare Payments,
    Cannot Assert Lien
Negotiation Tip #1
   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

   Example: 61 y/o bicycle rider hit by car and
    has hip replacement.

   Medicare reduction: $28,000 to $9,000.
    How much can plaintiff claim in his lawsuit
    against you?

   Can the hospital come after you or the
    plaintiff for the difference?
HOW TO ACHIEVE HERO STATUS

     If Hospital Accepted Medicare
      Payment, plaintiff can’t collect more
      than amount paid

     Hospital Can’t Claim More

     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)
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.
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
Nishihama
   Case Summary

   Plaintiff’s argument: Hospital can still come
    after me.

   Court: Hospital has already been paid in full
    per its agreement with HMO

   Case Closed?

   Did Defense Get Hanif wrong?
Greer
 Full Amount of Medical Bills
  Admissable
 Post Verdict Adjustment
Katiuzhinsky
 Finance Company Lien
 Full Amount Admissible Without
  Reduction
Olsen v. Reid
 Knock, Knock, Knocking On Hanif’s
  Door
 Collateral Source
Quagmire

HOSPITAL LIENS
Civil Code 3045 et.seq.
   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
   Hypo: $50,000 in medical bills. $15,000
    policy.

   Timely Lien Notice From Hospital

   Paid Out Policy With Honoring Lien.

   Do you keep your job?
BACON SAVED
   Mercy Hospital v. Farmers(1997)

   Hospital only entitled to ½ of
    what the plaintiff got or $7,500.

   If that happens, you can still
    resort to the Release.

   Check your release language
SEEKING THE “CONTRACTUAL
DIFFERENCE” : THE NEW
BATTLEGROUND

     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
How To Calculate
   Costs to perfect lien(minimal) plus either:
   1. Amount actually paid to providers(non-
    capitated 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
      1. Reduction if attorney fees
      2. Reduction for plaintiff’s comparative
       fault.
      3. Maximum cannot exceed:

          1/3 of amount due to p if attorney
           involved
          ½ due plaintiff if no attorney
Made Whole Doctrine
   Make First Party Med Pay Go Away
WHY YOU NEED TO KNOW
THIS
   “I GOT ALL THESE LIENS I HAVE TO
    PAY BACK”
HYPOTHETICAL(EASY)
   $15,000 settlement

   Attorney Fees and Costs $5,000

   Medical Lien(3040) $15,000

   How much does HMO get back?
Hypothetical(MEDIUM)
   $15,000 settlement

   No comparative fault

   Attorney Fees and Costs: $5,000

   Emergency Room $7,500

   How much will plaintiff get?
Hypothetical(Who the hell
knows?)
   $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
   $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
   You Can Negotiate Directly!
ERISA
   Sereboff
All Other Medical Liens

   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
   Must protect
WORKER COMPENSATION
       LIENS
Labor Code §3852
   Employer may recover from 3rd
    party tortfeasor total amount of
    compensation paid.
Labor Code §3865
   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.
Attorney Fee and Priority Issues
     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.
How do I get the ?@*# Intervenor to
reduce the Workers’ Compensation lien?

    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 non-
     economic damages.
   Kemerer v. Challenge Milk Co.
    (1980) 105 Cal. App. 3d 334.
    Plaintiff’s negligence not imputed to
    employer for lien reduction
    purposes.
   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.
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.
Purchase of Lien/
Assignment of Lien

    Hone v. Climatrol Indus. (1976) 59
     Cal. App. 3d 513. Court approves
     concept of lien assignments.
   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!
   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
    Bostick@aol.com

   Christine & Shawn Friestad:
    Friestad@friestad.com

   Greg Stanfield:
    GStanfield@HannaBrophy.com

				
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