Your health insurance company may have paid for the injury-related care that is part of your lawsuit. Some health insurers have a right to be reimbursed for the payments they made from your personal injury settlements. This right to reimbursement can be based in either statute or the contractual languageinyour policy. When your health insurance pays for medical bills caused by a third party, it suffers an economic loss. As a result, your health insurance may have a claim or “lien” against the third party just like you do. However, that claim shifts to you once you receive money from the third party, because you received compensation for the medical bills your insurer paid.
Depending on the type of healthcare lien, failure to resolve reimbursement obligations could result in the suspension of your healthcare coverage, financial penalties, an/or a potential lawsuit against you.
In complex litigation, it is common for law firms to engage the expertise of a thirty-party company that specializes in healthcare lien resolution. This company, referred to as the Lien Resolution Administrator (“LRA”) is tasked with reporting cases to the relevant lienholders, auditing claims listings, and finalizing liens to ensure compliance with statutory and contractual law. LitPROis the company our firm has engaged to perform this work in this litigation.
Medicare-entitled claimants will receive a copy of a Medicare Rights & Responsibilitiesletter which states that CMS was notified that you filed a liability insurance claim on their behalf. The letter confirms that a Medicare Secondary Payer (MSP) recovery case has been established, and it goes on to explain the concept of conditional payments made toward the injury-related care. Medicare benefits will not be affected as we work through this process.After the Rights & Responsibilities letter, claimants will receive copies of all Conditional Payment Letters and any correspondence that the LRA has requested. You do not need to act on these letters. The LRA will handle all lien correspondence.
As your attorney, we are legally and ethically obligated to verify and resolve certain types of healthcare liens. We are conducting a process to scan health insurance databases to determine whether statutory and/or contractual reimbursement obligations exist. Once this process is complete and we confirm there is no match against the database, money will be released.
As a claimant in this litigation, you have been enrolled in [INSERT GLOBAL PROGRAM]. It is common in litigations with larger claimant populations to proactively negotiate reimbursement terms with certain health insurers. Average injury category treatment is modeled and set reductions are applied to resolve liens as expeditiously and favorably as possible.
The time it takes to finalize healthcare liens is highly dependent on the type of lien involved. This process can take weeks up to several months. No matter the lien type, the steps in the traditional lien resolution process are the same: (1) reporting claimant information to the lienholder; (2) thelienholder presents claims listings for each claimant; (3) the LRA performs a thorough audit of claims and disputes unrelated claims; (4) liens are negotiated and finalized;and (5) payment is made to the lienholder from settlement funds.
This company represents the reimbursement interests of a significant number of national and regional private insurance companies or health plans. Currently, the firm is verifying with this company whether any of the plans they represent have an interest in the proceeds of your personal injury lawsuit by virtue of providing health benefits to you.
Below is a list of common health insurers that may have a right to be reimbursed from your personal injury settlement.
Medicare Parts A & B
Medicare is the federal government’s healthcare program that provides healthcare for individuals 65 and older, those qualifying for social security disability, and individuals diagnosed with end-stage renal disease or Lou Gehrig’s disease. When an individual is injured and later receives compensation from another party in relation to those injuries, federal law enables Medicare to be reimbursed from those funds. In cases where Medicare is not reimbursed properly, Medicare may assert financial penalties against you. Accordingly, federal law requires that you satisfy any potential Medicare reimbursement obligation from your personal injury settlement proceeds.
Medicare Parts C and D
Beneficiaries who qualify for Medicare coverage can receive their Medicare benefits through a private insurance company like Humana or United Healthcare. This election is referred to as Medicare Part C and is more commonly known as a Medicare Advantage Plan. Medicare beneficiaries may also elect to purchase a Medicare Part D Prescription Drug Plan to cover medication that is not covered under Medicare Parts A and B. Both Medicare Parts C and D have the same rights of reimbursement described above for Medicare Parts A and B. Accordingly, you are required to satisfy any potential Medicare Parts C and D obligations from your personal injury settlement proceeds.
Medicare Supplement
Medicare Supplement plans, commonly referred to as a Medigap plan, is insurance offered to Medicare beneficiaries to cover individuals for amounts that Medicare Parts A and B will not otherwise cover. Unlike Medicare Parts A, B, C, and D, Medicare supplement plans derive their rights to reimbursement under state law instead of federal law. Nonetheless, many of these plans do have a right to be reimbursed from your personal injury settlement proceeds.
Medicaid
Medicaid is a needs-based program available to people who are under certain income and/or asset thresholds, administered by the states with federal government oversight. The ability of these plans to seek reimbursement from injury-related settlements varies from state to state as the rules that guide each Medicaid program are unique to each state.
Military Health Benefits
Members and retirees of the United States Military are able to receive healthcare benefits through a number of programs. The Department of Veteran’s Affairs (“VA”) for example allows veterans who served during wartime to receive their healthcare free at VA hospitals and clinics. For active-duty members and their spouses and dependents, health insurance is commonly offered through the TRICARE program. Finally, CHAMPVA provides coverage to the spouse or widow(er) and to the children of a Veteran who do not otherwise qualify for TRICARE. Federal law gives all of these Military Programs the ability to seek recovery directly from your personal injury settlements.
Workers Compensation
Workers Compensation benefits are given to employees who are injured as the result of a job-related function. In cases where youare receiving Workers Compensation benefits for the same injury that you are also receiving personal injury proceeds; Workers Compensation may have the right to recover from your personal injury proceeds. The laws governing Workers Compensation are unique to each state and the ability and amount that Workers Compensation can recover varies accordingly.
Federal Employees
Individuals employed by the federal government are generally eligible for health benefits through a separate federal healthcare program. Under federal law, these plans have a right to seek recovery from your personal injury proceeds.
Private Health Insurance
Many companies offer private healthcare coverage to their employees. Similarly, any individual can purchase a private health insurance policy. In some instances, varying from state to state and the specific plan that you had, the private health insurance company may have a right to seek recovery from your personalinjury proceeds.
