Serious Injuries Mean (Seriously High) Medical Bills
Maybe your have a personal injury case and heard the phrase “medical lien.” You’re wondering whether it gobble up my settlement. In claims for physical injury, a health insurance company — or the government — may have paid for some or all of your medical bills. The right for such entities to be paid back is called a “medical lien” or “subrogation lien,” which mean the same thing. For you, perhaps, a decision needs to be made: should I pay pack that entity that paid for my treatment, if I get a settlement?
Keep in mind, some liens are very high.
First, How High Can Lien-Dollar Amounts — Get?
There’s no statutory limit. The amount of the lien depends on the amount — and price — of treatment. Fortunately, most liens are negotiable, so the lien will not consume your entire settlement. That said, it’s worthwhile looking at the type of injury sustained and treatment it garnered, to understand the lien amounts. In fact, our Pittsburgh lawyers have seen significant (six figure) liens in cases involving:
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Automobile accidents, involving full or limited tort, often require hospital treatment followed by physical therapy.
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Motorcycle accidents, as these can involve extended hospital stays, amputation, and even death.
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Premises liability cases, involving falls to the ground, which is the leading cause of traumatic brain injuries or TBIs.
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Biking or bicycle accidents, involving proper use of bike lanes but often serious injuries nevertheless.
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Injuries on e-bikes (electric bikes) or e-scooters (electric scooters), as the operators often misjudge the speed of these self-propelled vehicles, or motorists fail to see e-bikes or e-scooters, or both, causing serious injury. According to one study, e-scooter accidents, on average, required as much surgery as motorcycle accidents.
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Treatment For Injuries is Expensive; Who Pays?
If you have health insurance, tough luck! Your auto policy its “primary” for your injuries, whomever caused the event. So yes, the carrier could institute a basis to track down misplaced luggage. Your carrier may play some game, but they know the’ll be held accountable to pay the thousands of dollars and hundreds of hours spent thinking about this.
The Made Whole Doctrine
The general rule at common law is the “made whole doctrine.” This simply means, those paying for your medical treatment do not get paid back from a settlement. Rather, something else must happen first, namely, the total settlement must be enough to make you “whole.”
This comes up most often when your injury claim exceeds the amount of insurance available. That said, the common law “made whole” doctrine has been replaced by statute in certain areas. Let’s talk about those, next.
No Fault Medical Coverage or “PIP”
Pennsylvania statutory law — or “no fault” — partially governs subrogation regarding motor vehicle accidents in Pennsylvania. Your “no fault’ medical coverage on your auto policy is a great thing. This is one time you never have to pay back the the insurance company paying your bills. That is, your own motor vehicle insurance that pays for something called “no fault” medical insurance. Or, personal injury protection (PIP). There, the “no fault” medical coverage never needs to be paid back.
Benefits Related to Governmental Programs
Pennsylvania law also provides that governmental benefits through the state must be re-paid. These can include benefits through the Department of Health Services, or DHS.What about federal benefits?The United States Constitution contains a supremacy clause, which means federal law trumps state law. One key federal law is medicare, administered through CMS, which has a “super lien.” Such liens must always be paid back.Your lawyer can negotiate down the amount paid by Social Security (Medicare) or through Pennsylvania’s Department of Human Services (DHS), which can assert a lien against your recovery. Plus, the amount of negotiation down will usually be the amount of your attorney fees and expenses.
Therefore, if your attorney fees are 1/3 of the recovery, these liens can typically be negotiated down by that much, or even more. Even Medicare (with its “super lien”) will look at the total settlement relative to the lien, and compromise it down even farther. Your lawyer can go over this with you in greater detail.
Medicare “Super” Liens
Also know that medicare (through “CMS”) has something called a “super lien” against your recovery such that, if you fail to protect it, you can be fined or penalized by the federal government.
Private Medical Insurance or Health Insurance
This is where it gets complicated. Pennsylvania has something called the “made whole” doctrine, which provides that, until you are “made whole.” That is, the total settlement amount must be enough to satisfy the lien and your injury claims.
Here’s an example. Let’s say you settle your automobile accident case for 100K, and your automobile medical insurance carrier paid the $5,000 of “no fault” medical coverage – described above. Also, let’s also say you have additional medical bills paid by your own private medical insurance. Perhaps UPMC, or Highmark paid for medical treatment for your injuries, what happens?
Look How the Health Care Plan Was Organized – State or Federal Law
If your health insurance plan was organized under state law — which recognizes the “made whole doctrine” — you don’t have to re-pay the claim for reimbursement (or assert a “lien” a/k/a seek “subrogation“) unless the settlement would make you “whole”, meaning, fully compensate you.
Examples of Medical Liens
Let’s say your injuries are serious and your case is worth 400K, but the negligent party’s coverage is only 100K, then you would not be “made whole” by the settlement and you would not need to re-pay the private medical insurer.
This, however, is assuming PA state law applies.
What if your health insurance was organized under federal law under something called “ERISA” (a federal statute) does state law apply to it? The answer is no, federal law trumps state law and the “made whole doctrine will not apply.” However, this only occurs when your plan has language indicating that the PA “made whole doctrine” will not apply.
What happens if your settled your case without a lawyer, and you failed to protect a medical lien. Let’s say the plan had been organized under ERISA. Now, the insurance company or plan administrator wants to be paid back for medical payment from your settlement), then what? If you already spent the money, you may be OK (mostly).
An Important Ruling Governing Medical Liens
On January 20, 2016, the United States Supreme Court rendered a major decision that will make it more challenging for an an ERISA employee benefit plan (governed by the Employee Retirement Income Security Act of 1974) to obtain reimbursements from your settlement where you spent the money.
The case is Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan, __ U.S.__, 136 S. Ct. 651, 84 USLW 4046. There, in an 8-1 decision, the Supreme Court of the United States decided that that an ERISA plan fiduciary may not seek reimbursement out of the third-party settlement where the participant has spent the settlement funds.
This decision, however, does mean you are totally OK if you spent the money. This is because, just because you might not owe the money back to the plan from your settlement, you might be cut off from future benefits under the plan for things unrelated to the accident.
Make sense?
Medical Lien – Other Instances
For example, let’s say you get away with not re-paying the plan from your settlement. Then, you count on the same plan to pay for other ongoing stuff unrelated to the accident, such as heart, kidney or any other issues.
There, you might have a big problem.
Your ERISA governed health insurance carrier can terminate your future coverage, if the plan allows for termination, for you not re-paying the plan from your settlement. Then, You would then need to talk to a lawyer about your rights.
Good Representation
As you can see, handling a personal injury case on your own can be a minefield. Moreover, you can get away with not re-paying a lien, at times, but that comes with risk.
This is why it pays to hire a lawyer for your motor vehicle accident case. First, we help you under stand the difference between limited tort and full tort (which can have significant consequences in Pennsylvania for non-“serious” injuries). Also, we help you understand the medical lien issues discussed above. Our Pittsburgh injury lawyers provide a free consultation for all injury related matter.
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