ILNews

Essley: The land of (health care lien) confusion

February 12, 2014
Back to TopCommentsE-mailPrintBookmark and Share
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.•

--------

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.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. No second amendment, pro life, pro traditional marriage, reagan or trump tshirts will be sold either. And you cannot draw Mohammed even in your own notebook. And you must wear a helmet at all times while at the fair. And no lawyer jokes can be told except in the designated protest area. And next year no crucifixes, since they are uber offensive to all but Catholics. Have a nice bland day here in the Lego movie. Remember ... Everything is awesome comrades.

  2. Thank you for this post . I just bought a LG External DVD It came with Cyber pwr 2 go . It would not play on Lenovo Idea pad w/8.1 . Your recommended free VLC worked great .

  3. All these sites putting up all the crap they do making Brent Look like A Monster like he's not a good person . First off th fight actually started not because of Brent but because of one of his friends then when the fight popped off his friend ran like a coward which left Brent to fend for himself .It IS NOT a crime to defend yourself 3 of them and 1 of him . just so happened he was a better fighter. I'm Brent s wife so I know him personally and up close . He's a very caring kind loving man . He's not abusive in any way . He is a loving father and really shouldn't be where he is not for self defense . Now because of one of his stupid friends trying to show off and turning out to be nothing but a coward and leaving Brent to be jumped by 3 men not only is Brent suffering but Me his wife , his kids abd step kidshis mom and brother his family is left to live without him abd suffering in more ways then one . that man was and still is my smile ....he's the one real thing I've ever had in my life .....f@#@ You Lafayette court system . Learn to do your jobs right he maybe should have gotten that year for misdemeanor battery but that s it . not one person can stand to me and tell me if u we're in a fight facing 3 men and u just by yourself u wouldn't fight back that you wouldn't do everything u could to walk away to ur family ur kids That's what Brent is guilty of trying to defend himself against 3 men he wanted to go home tohisfamily worse then they did he just happened to be a better fighter and he got the best of th others . what would you do ? Stand there lay there and be stomped and beaten or would u give it everything u got and fight back ? I'd of done the same only I'm so smallid of probably shot or stabbed or picked up something to use as a weapon . if it was me or them I'd do everything I could to make sure I was going to live that I would make it hone to see my kids and husband . I Love You Brent Anthony Forever & Always .....Soul 1 baby

  4. Good points, although this man did have a dog in the legal fight as that it was his mother on trial ... and he a dependent. As for parking spaces, handicap spots for pregnant women sure makes sense to me ... er, I mean pregnant men or women. (Please, I meant to include pregnant men the first time, not Room 101 again, please not Room 101 again. I love BB)

  5. I have no doubt that the ADA and related laws provide that many disabilities must be addressed. The question, however, is "by whom?" Many people get dealt bad cards by life. Some are deaf. Some are blind. Some are crippled. Why is it the business of the state to "collectivize" these problems and to force those who are NOT so afflicted to pay for those who are? The fact that this litigant was a mere spectator and not a party is chilling. What happens when somebody who speaks only East Bazurkistanish wants a translator so that he can "understand" the proceedings in a case in which he has NO interest? Do I and all other taxpayers have to cough up? It would seem so. ADA should be amended to provide a simple rule: "Your handicap, YOUR problem". This would apply particularly to handicapped parking spaces, where it seems that if the "handicap" is an ingrown toenail, the government comes rushing in to assist the poor downtrodden victim. I would grant wounded vets (IED victims come to mind in particular) a pass on this.. but others? Nope.

ADVERTISEMENT