Jeffrey P. Gale, P.A. // Florida Personal Injury Law: Medical Lien Cutoff Dates

dollars.jpgIt is not uncommon in personal injury cases that some medical bills are paid by health insurance and Medicare. These payments should not be ignored by any of the parties to the personal injury case, especially the injured party.

These sources must be repaid from the proceeds of any recovery made in the personal injury case. (Note: PIP, which is mandatory no-fault motor vehicle medical insurance, does not have to be reimbursed.)

While it may be possible to negotiate the repayments, it is, of course, important to know how much is owed. Making this determination can depend on when the payments were made in relationship to when the personal injury case was settled.

This cutoff date varies depending on the entity involved.

HEALTH INSURANCE: The cutoff date depends on whether or not the health insurance policy is subject to ERISA. If it is not, the lien ends at the date of settlement. See Florida’s collateral statute — 768.76. It is fairly well established (although not conclusively — see Coleman v. Blue Cross and Blue Shield of Alabama, Inc. So.3d , 35 FLW D2718 (Fla. 1st. DCA 12-8-2010) for a contrary view) — that the collateral source statute does not apply to ERISA plans. ERISA lien rights are controlled by the subrogation/reimbursement language in the Summary Plan Description (SPD). The SPD should be requested, but in all likelihood its provisions are expansive, allowing for the recovery of all charges related to the accident including those made post-settlement. The plan may provide that it is not responsible for covering post-settlement accident related care.

Because ERISA laws strongly favor the carriers, dealing with ERISA liens is never pleasant. Nevertheless, we drive a hard bargain. We sometimes begin negotiating by making a low ball offer to repay 30% of the lien amount coupled with a request that the insurance carrier agree to cover future accident-related medical expenses. Another approach is to argue for a 40+% discount to account for attorneys fees and costs incurred in securing the recovery.

MEDICARE: The cutoff date is the date of settlement. However, bills for services provided before the settlement, but not billed to or received by Medicare until after the settlement must be repaid. Less clear is whether Medicare must be reimbursed for medical services planned before but not provided until after settlement. An option for dealing with this is for the Plaintiff’s attorney to hold in trust for a reasonable period of time the anticipated (or known) charges for the post-settlement medical services.

SETTLEMENT DATE: Is it the date the parties have agreed to settle, the date Plaintiff has executed the settlement release, the date the settlement money is tendered, or the date the money is ready to be distributed? Traditional “offer and acceptance,” “meeting of the minds,” principles should dictate settlement, but not everyone agrees. Some folks will argue that the settlement date is when the settlement proceeds are received by the plaintiff’s attorney or not until the proceeds are distributed.

Serious consequences can come from failing to resolve liens. With regard to Medicare, it’s a criminal offense. Because the lien resolution process can extend beyond the time the settlement proceeds are available to be disbursed, oftentimes we hold enough money in trust to cover the worst case scenario until we are comfortable that we and our clients are out of harm’s way. Get all lien satisfaction agreements in writing to avoid later conflicts.

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Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.

While prompt resolution of your legal matter is our goal, our approach is fundamentally different. Our clients are “people” and not “cases” or “files.” We take the time to build a relationship with our clients, realizing that only through meaningful interaction can we best serve their needs. In this manner, we have been able to best help those requiring legal representation.