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The Healthcare Lien Resolution Problem
A common scenario at the end of a personal injury case is a mad scramble to obtain healthcare plan documents to help you determine whether the client’s healthcare lien must be repaid. The problem is that you have no documents, and you’re not even sure who the employer is so that you can get the documents. You look back at your intake notes, and no one has indicated how the client obtained their healthcare, where they are employed, or whether the healthcare is provided by their spouse or parent. All you know for sure is that a collections for the healthcare plan is sending you letters concerning their healthcare lien every week threatening to sue your client and your firm if you don’t pay them. This article provides an approach to help you with your healthcare lien resolution process.
Change Your Intake Process
A simple fix to your intake process can end some of this needless frustration. Update your intake sheets to be sure that someone at your office is obtaining relevant healthcare information from the very outset of the case. A sample of intake is attached for download here. We encourage you to cut and paste it into your existing personal injury intake sheet.
Whether your client will ultimately have to repay their healthcare plan often boils down to whether or not their healthcare is regulated by ERISA (Employee Retirement Income and Security Act). That means you will need to know some information about the plan so that you can make that determination at some point, preferably early in the case. To make that determination, you will need to know the name of the employer providing the benefits so that you can request the relevant documents that will tell you this information. Most importantly, learning the healthcare and employment information at intake allows you months – not days – to collect this information to make an informed decision about the enforceability of the healthcare lien. That eliminates the last-minute scramble for documents, frustrated clients, and worst of all, uncertainty surrounding whether you really have to pay the lien.
Questions to Ask
Too often, when an intake sheet asks for health insurance information, there is only a simple answer like, “BlueCross.” Unfortunately, that could be any number of government, single payer, or private employer healthcare plans administered by BCBS. What you really need to ask at intake is, “where do you get your health insurance.” As in, what is the name of the employer or entity that provides you with health insurance? What you are listening for is whether the health insurance is provided by a private employer or not, and if so, what is the type and size of that employer.
There are four things the answer to this intake question will tell you:
- If there is not an employer involved, then it is probably either Medicare, Medicaid, which you will have to reimburse.
- If the client has single-payer insurance such as insurance purchased off the Federal government’s healthcare exchange (i.e. “Obamacare”), you will not have to reimburse;
- If it is a state or county governmental entity, you will likely not have to reimburse;
- If it is a private company, your client will most likely have to pay it back unless it is a small business.
This information, obtained in the first meeting with the client, should give you some inkling regarding the enforceability of a healthcare lien. For instance, if your client is using state healthcare benefits circle and highlight and put a star by it, because there is a 99 percent probability they will not have to reimburse the plan, pursuant to Georgia’s made whole law, O.C.G.A. § 33-24-56.1. The same goes for healthcare purchased off the federal exchange, HealthCare.gov or any other direct contribution plan. In Georgia, all of these non-employer plans are subject to the made-whole rule.
Private healthcare insurance from a business is more tricky. You won’t really know whether you will have to reimburse the private employer healthcare plan until you obtain the plan documents to determine whether the plan is governed by ERISA. Therefore, if the intake information indicates a private employer provides the insurance, that should trigger an automatic task for requesting the plan documents to make that determination. For more information on obtaining plan documents download a copy of our article here.
However, the size of the client’s employer will give you a hint as to what you are likely to find. The larger the employer, (i.e. a national corporation) the more likely the plan will fall under ERISA and you will have to pay it back. The smaller the company, (i.e. a small mom-and-pop business or professional office with few employees) the more likely it will not be ERISA and you will not have to pay it back pursuant to the made-whole rule in § 33-24-56.1. However, you will not really know until you obtain the documents.
Other Types of Benefits
You also want to make sure you add other important questions about government benefits to your intake. For instance, if your clients are treating with Medicare you need to know this early in the case. That should trigger a task to obtain a conditional payment letter from Medicare/CMS before you settle the case. Otherwise you will be waiting 60 days or more after settlement simply waiting to learn how much Medicare will have to be repaid.
Another important question should include Medicaid or other means-based assistance. If your client is receiving means-based assistance, such as Medicaid, their receipt of personal injury proceeds may disqualify them from being able to continue receiving those benefits. This should trigger a task to consult with a benefits attorney to determine how best to protect your client’s status by placing the funds in a medical trust or other account.
Making these few additions to your standard intake will improve efficiency and help prevent last minute scrambling over issues that don’t rear their head until the end of the case.
