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Essley: The land of (health care lien) confusion

February 12, 2014
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Indiana Lawyer Focus
By Eric Essley

essley-eric.jpg Essley
In 1986, the British rock band Genesis wrote of the troubling times the world faced. While practitioners might not be quite as anxious as the writers of “Land of Confusion,” there is likely some misunderstanding surrounding the various Indiana lien statutes attorneys face when trying to settle health care related claims. This is even truer given the Legislature’s recent revisions to the Hospital Lien Statute (see I.C. 32-33-4). Accordingly, this article will provide a high-level review of the few health care-related lien statutes often encountered and/or cited by the plaintiff’s bar and their in-house/defense counterparts.

Initially, attorneys frequently cite the Comparative Fault Statute (see I.C. 34-51-2-19(2)) in an effort to secure a lien reduction. This statute requires lienholders to diminish their recovery in the “same proportion as the claimant’s recovery is diminished.” Id. It also obligates the lienholder to pay “a pro rata share of the claimant’s attorney’s fees and litigation expenses.” Id. While it is sensible to expect a lien reduction and to be asked to compensate an attorney for her services, a few concerns jump off the page.

First, lienholders rarely ever see a detailed report describing the basis for the valuation of the pre-settlement/judgment case. Thus, a request to accept a substantial discount solely on an adverse party’s word might be hard to swallow, especially if the lien is significant. Second, because there is no rule as to what attorney rates can be charged in any given case, the fees and costs generated by different counsel are typically quite varied. Although I.C. 34-53-1-2 might work to offer some additional guidance to both parties in certain cases, counsel should naturally expect added scrutiny where the fees statement is considerable and, thus, where more insurer/provider dollars are at play.

The final concern is that the reduction request rarely acknowledges the first part of the statute, which calls for plaintiff’s own culpability to be measured. See I.C. 34-51-2-19(1). The insurer/provider will necessarily want to discuss the facts and evidence of the case as those aspects relate to plaintiff’s conduct. Privacy and ethical concerns must be respected, but these conversations should be pursued and anticipated. Notwithstanding the above, the resulting lien reduction process is often a standard negotiation between two parties who have an interest in maximizing their respective positions.

Next, practitioners should be aware of the lien statutes that specifically apply to Medicaid recipients. See I.C. 12-15-8 and I.C. 12-15-8.5. Ind. Code 12-15-8-1 unequivocally asserts that the state of Indiana (through the Office of Medicaid Policy and Planning) will have a lien on any recoveries where the office has paid medical expenses related to the underlying claim at issue. See I.C. 12-15-8-1. In practice, the “office” could include any health plan, provider network or individual provider that is contracted with the state directly or indirectly to provide approved Medicaid-related services to Indiana residents.

Given the scope of the office’s jurisdictional statement, the Medicaid lien statutes arguably occupy the field with respect to recoveries tied to Medicaid recipients. Further, they are different from the Comparative Fault Statute in a couple of critical ways.

First, there is no required lien reduction specifically due to a recipient’s comparative fault or in the event that the ultimate recovery does not achieve the projected value level. Though again, parties often negotiate reductions in order to efficiently close files. Next, this statute provides the office with the discretion to waive any rights to a lien it might otherwise have. See I.C. 12-15-8-9. The frequency of such benevolence by any one of the entities that might qualify as the “office” is unknown. Similar to the Comparative Fault Statute however, this chapter does contain a provision requiring the office to compensate plaintiff’s counsel for certain costs and expenses and for attorney fees. See I.C. 12-15-8-7 and -8.

Where I.C. 12-15-8 relates to Medicaid liens on the pecuniary proceeds of a recipient’s recovery, I.C. 12-15-8.5 addresses potential attachments to real property held by the recipient. Likely due to very reasonable public policy considerations, this chapter is much more restrictive and will allow the office to move forward with a property-based lien satisfaction only in limited circumstances. Nevertheless, it is not without teeth and should be considered when attempting to understand all potential lien hurdles.

Finally, Indiana’s Legislature recently passed a revised version of the Hospital Lien Statute. See I.C. 32-33-4. In Indiana, hospitals have the legal authority to pursue a recovery where the services rendered originate from an illness or injury that is the subject of a cause of action, lawsuit or claim. See I.C 32-33-4-3. This authority, however, is not unlimited. To begin, a hospital may not seek recoupment of its charges until the underlying injury claim has been resolved by settlement or judgment. See I.C 32-33-4-3.5(e).

Next, the hospital’s lien must now be reduced to reflect amounts to which the plaintiff is entitled, regardless of whether such a recovery is realized. See I.C 32-33-4-3(b)(5). This section represents a departure from the previous iteration of the statute, which did not require hospitals to apply the reductions and/or credits against a patient’s bill unless the hospital actually received payment from an alternate source. Now, hospitals cannot casually avoid the often cumbersome legwork required to collect recoveries from these other sources. Third, the new statute contains another lien reduction provision aimed at addressing the scenario where the patient’s recovery is disproportionally low as compared to the hospital bills. See I.C 32-33-4-3(c). Lastly, the new Hospital Lien Statute has added a number of carve-out populations. Most notably, the statute will not apply to persons covered by state and/or federal workers’ compensation laws, to Medicare recipients or to individuals whose claims are subject to a disability insurance policy or an automobile policy that includes medical payment benefits. See I.C 32-33-4-3(b)(3) and (d).

Attorneys must navigate many lien challenges as they work to close files on behalf of their clients. The health care lien statutes addressed in this article represent just one small corner of that complex world.•

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Eric Essley is an associate general counsel at MDwise Inc., an Indiana-based HMO. Eric’s practice focuses on a diverse set of in-house and state and federal health care matters. The opinions expressed in this article are those of the author.

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  1. This guy sounds like the classic molester/manipulator.

  2. Louis D. Brandeis was born in 1856. At 9 years of age it would have been 1865. The Brandeis family did not own slaves. My source Louis D. Brandeis: A Life, by Melvin L. Urofsky.

  3. My name is Matthew Lucas Major, I recently went through a jury trial in Bloomington , In. It was the week of Feb 19-21. Although I have been incarcerated since August 5, 2014. The reason I 'am writing to you sir is on the 21 of February the jury came in with a very excessive and wrongful verdict of guilty on 6 child molesting charges against my daughter who was 9 at the time I was accused. I also had 2 other Felonies one of Intimidation and 1 of Sexual Vicarious Gratification. Judge Marc Kellam on the second day of trial gave me a not guilty on those 2 felonies. The jury was sent out during that time and when brought back Judge Kellam told them to not concern themselves with the 2 Felonies that he ruled on them. They were told to not let evidence they had already heard influence there verdicts. I never in my life touched any child sexually and definitely not with my own daughter. When I was arrested Detective Shawn Karr told me I would be convicted guilty just on my daughters word even without evidence. That's just what happened. my public defender did me so wrong he never once proved to the court and jury all the lies the child told, and Jeremy Noel my public defender could of proven the lies easily. The stories in Serenity's depositions and Forensic interview changed and were not consistent as Prosecutor Darcie Fawcett claimed they were. Yet my attorney never mentioned that. The facts that the child accused me of full penetration in her vagina and rectum was proven lies. Doctor Roberta Hibbard of Riley hospital in Indianapolis confirmed Serenity's hymen intact, no scars, no tearing, no signs of rape to her. Yet my attorney didn't use that knowledge . the DNA was all in my favor. I tell you I will spend my entire life in prison going through rape and beatings etc. even Judge Kellam abused his authority by telling the jurors to listen and believe what the prosecutors side in evidence like my daughters testimony. In one interview with the detectives my daughter got flustered with her mom and said on camera " I'm saying what you told me to mom"!! Yet Mr. Noel said nor did anything to even resemble a defense attorney. Judge Kellam allowed edited version of a taped conversation between the child and her mother. Also Judge Kellam allowed the Prosecutor too bring in to my case a knife found under my seat, the knife wasn't part of my case. She was allowed by my attorney and the judge to put a huge picture of it on the screen and huge picture of my naked privates in a full courtroom and open court. Ms. Fawcett says to jury see how easy Mr. Major could reach the knife and cut his Childs throat. Even though I had no weapons charge against these cases. This gave the jurors prejudice thought against me thinking I threatened her with that knife and how scared she would of been knowing i could get it and kill her. On my sentencing court March 19, 2014 my public defender told Judge Kellam he wish to resign from being my attorney and wished for the court to give me outside council to file a error to trial or appeal. We were denied. Now after openly knowing my public defender don't want to represent me he has to. Well when as parents we make our kids clean a room when they really don't wish to, well the child will but don't mean she will do a good job, that's where I'm at with Mr. Noel. please dont ignore mine and my families pleas for your help . we have all the legal proof you could need to prove Im innocent. Please dont make my spend years in prison innocent when you can fix this wrong. Im not saying Im a perfect man or that I was a perfect dad to my 2 children none of us are. Ive made some bad choices in life and I paid for them. But I didnt ever touch or rape my daughter . I love my children with all my heart. And now through needing attention and a ex-wife who told my granny several times she wish she could put me in prison to get me out of their lives. Well my ex finally accomplished her goal. Sad part is she is destroying our daughter with all this horrific lies and things she taught my daughter to say. My daughter will need therapist to ever hope for a chance of a normal life after what she had done to her by her mom and their side of the family. My daughter told everyone even on stand she had a dream months before i supposedly molested her in this dream I was molesting her and when I finally did it matched her dream perfectly. She admitted to watching movies about little girls being molested and watching U-Tube videos about child molesting all before it happened supposedly to her. Doesn't that sound very unusual that a non molested 9 yr old would need to know so much about being molested? The only reason I could think a 9 year old would need so much information is to be prepared to know what to say and be able to say how it felt what took place etc.. So when questioned by authorities she would be prepared. And there again sir if a parent is pre grooming a 9 year old child she would need intimate details . Like telling her daughter about a couple moles on my private area. The child admitted to sneaking my cell and looking many many times at nudes of me and my girlfriend even one where my penis was entering my girlfriends vagina. In that picture my moles are obvious. Yet when prosecutor showed everyone in court my privates and pictures of the moles she said the only way the child would know about them is if she saw them for herself. My attorney once again said nothing about the pictures my child saw. Or could a ex-wife be able to describe my moles to help her case against getting rid of me? I beg you help me. This is my very existence. Ive lost everything , a good job, a wonderful girlfriend, my freedom, but worse thing Ive lost is my children. They were my reason to get up every morning and strive to be better. The wonderful bond I had with my Serenity is gone. After this I would be afraid to even hug her for fear of what next can they do to me. I'm not afraid to tell you I sit here in this cell and try to hold back my tears. Everyone knows you cant show weakness in prison. My life has already been threatened here at Wabash Valley Prison. After only 3 days of arrival. I was tricked into signing a waiver now Im in G Block General Population with 6 child molesting felony charges. Mrs. Hart as a 18 year old I almost died hooked to machines in hospital almost 1 month and now I know that fear was childish compared to this . I cant help but put emotions in this, after all Mrs. Hart Im human and God help Me I never been more afraid in my life. I didnt hurt my little girl I didnt touch her sexually. As much as it shreds me and fills my mind what Im facing I worry more about my mom and granny because of their great love for me mam they are suffering so deeply. I aint done this things but my loved ones suffering right along beside me and If you take my case you will be in essence freeing them also. I sent momma this letter and asked her to email it to you. I'm scared I have been done so unjustly by our legal system and I need you to fix this and give me freedom. I ask you please don't just ignore my pleas. Here in America its nice to be able to trust our legal justice system, well they destroyed my and my loved ones trust in our justice system . And I'm trusting in You !!! My entire family is suffering this nightmare with me. My 77 year old granny had a stroke and isn't doing so well. My single mother that raised 3 kids alone is dying from Lupus and since my arrest has stayed so sick and weary. Our lives torn to peices by a government I was taught I could trust in. my momma has tried so many innocent project and wrongfully accused and cant get anywhere. please please help me. A quote from the late Nelson Mandela: To be free is not merely to cast off ones chains, But to live in a way that respects and enhances The Freedom Of Others. I have Faith in you and your clinic to cast my chains off and give me freedom I do deserve as a wrongfully accused Man, son, brother, father, friend. Matthew Major DOC# 246179 Cause # : 53c02-1308-FA-000779 God Bless you. Please contact me with your decision so I know you made a life changing decision for me , just please at least write me so I know you care enough about your citizens to respond to cries for your help. You can speak openly with my mother Charlotte Spain (828) 476-0406: 71 Lakeview Dr. Canton, NC 28716 Thank You Matthew Major I know yall get thousands of request and inmates claiming innocence, and each person who are innocent deserve to have organizations like yours willing to fight for them and I give yall so much Thanks and I thank God everyday yall are out there caring enough to help free the innocents. Since discovering firsthand how easily lives and families can be destroyed by Poor Defense attorneys not doing their job . And Prosecutors allowed to do as they please in court

  4. Frankly, it is tragic that you are even considering going to an expensive, unaccredited "law school." It is extremely difficult to get a job with a degree from a real school. If you are going to make the investment of time, money, and tears into law school, it should not be to a place that won't actually enable you to practice law when you graduate.

  5. As a lawyer who grew up in Fort Wayne (but went to a real law school), it is not that hard to find a mentor in the legal community without your school's assistance. One does not need to pay tens of thousands of dollars to go to an unaccredited legal diploma mill to get a mentor. Having a mentor means precisely nothing if you cannot get a job upon graduation, and considering that the legal job market is utterly terrible, these students from Indiana Tech are going to be adrift after graduation.

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