www.schmidtkramer.com
DPW Lien Resolution
By:
Joe Chapman
Schmidt Kramer PC
(717) 888-8888
December 3, 2012
jchapman@schmidtkramer.com
Example 1: the big easy
Tractor Trailer accident with
$100,000 of first party benefit and
Settlement for $85,000
Responsibility to
Give Notice-Twice
• 62 P.S. § 1409(b)(4) & (5)
—beginning of claim
-- settling the case
What to include in Notice Letter
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Name of client
Social security number of client (last four digits will work)
Date of birth
Address
Date of incident
Type of incident (auto/medical malpractice, premises)
Injuries sustained (with as much detail as can be
provided)*
Court name and docket, if in suit (if not in suit, tell them)
Name and address of tortfeasor
Name of both first and third party insurers if auto case
Insurance adjusters’ names and phone numbers
Subro Letter
Subro Letter
Injuries
• If at some point you are going to end up arguing
treatment was not related and therefore expenses
should not be part of the Statement of Claim…
• Don’t also include those treatments as part of
building your damages for the insurance adjuster.
• DPW may ask you at some point for you
demand…Obviously, want to claim the treatment
which is related, and leave other parts out.
• Corollary: before claiming a treatment was not
related, review your demand!
VIA FACSIMILE (717) 772-6553
Department of Public Welfare
Office of Administration
TPL-Casualty Unit
P. O. Box 8486
Harrisburg, PA 17105-8486
RE:
Client
Date of Birth: ____b/d____
SSN: ***-**-8476
Date of Accident: August 10, 2010
Dear Sir or Madam:
I write in follow up to my ______date____ letter in which I notified you that
the Department may have paid medical bills related to an auto accident on
______date of incident____ for ____client name____.
More specifically, I wanted to outline the injuries that she suffered in that
accident so that you can most easily identify bills which were paid related to
the accident: right distal intro-articular radius fracture; right wrist injury
requiring splinting; disc bulge at L4-L5; back pain requiring physical
therapy; back pain requiring steroid injections.
Please also know that we have reached a tentative settlement agreement
with the tortfeasor in the case for $___dollar figure___. To that end, I would
very much appreciate if you would provide a Statement of Claim so that we
can take care of our responsibilities to the Department, as well as move
forward on settling the case for our client.
Should you have any questions, please telephone me at my office. Thank
you.
Very truly yours,
SCHMIDT KRAMER PC
D. Joseph Chapman
Attorney at Law
DJC/aww
Notice of
settlement
Ethics
Rule 3.2 Expediting
Litigation
• A lawyer shall make
reasonable efforts to
expedite litigation
consistent with the
interests of the client.
Molasses in
December?
DPW
– Approximately 27,000 cases being
handled
– 23 workers to work the cases
– those same 23 workers are also
attempting to resolve over 12,000
estate reimbursement cases
– may take three months to get a
statement of claim
– they went paperless in March
2010
– in 2011/12 fiscal year they closed
$48 million dollars of claims.
Example 2: Achtung!
Small auto case where Plaintiff passed away
during the case from problems unrelated
to accident.
Review the Statement of Claim
• In this situation, I found that all the claimed
expenses DPW had on their statement of
claim were dated after the treatment that I
claimed in my demand.
• Send letter explaining why the expenses
are out and send copy of demand.
Send dispute letter
I write having reviewed your Statement of Claim from August of 2012, concerning the Estate of
Heather.
As you will recall, this office represents her for an auto accident which occurred on February 11, 2010.
Heather’s treatment for the injuries she received in the auto accident was limited, and the
settlement which is tentatively agreed to with the third party insurer represents that amount of
treatment. I have attached our Demand to this letter, so that you can see we claimed medical
treatment only up through the latter part of 2010.
I noticed that all of the medical expenses included in your Statement of Claim are for dates of services
which are 2011 and later. Please know that Heather was diagnosed with cancer as well as
serious problems with her kidneys, which eventually led to her demise in 2012. I do not believe
that expenses contained in the Statement of Claim are attributable to the car accident for which
we pursued a claim against Erie Insurance. Again as my reasoning I use that all of the treatment
claimed in our Demand was through 2010, where all of the medical expenses were for dates of
service following January of 2011 in your Statement of Claim. If you would, please review the
Statement of Claim expenses and let me know whether you are willing to retract your assertion of
a lien in this situation.
Should you have any questions, I would be glad to talk to you about any of the information in my letter.
Thank you.
Only Half
• DPW can only take half of your client's
settlment.
• The one half is calculated on the net after
attorney's fees and of costs
• It should be taken before paying other
outstanding medical bills.
• 62 Pa. C.S.A. 1409(b)(11)
Ethics:
Client concerns:
Make sure that you only pay
DPW back for expenses that resulted
from the accident…especially where
comorbidities.
Rule 1.6 Confidentiality of Information
• (a) A lawyer shall not reveal information
relating to representation of a client unless
the client gives informed consent, except for
disclosures that are impliedly authorized in
order to carry out the representation, and
except as stated in paragraphs (b) and (c).
Example 3: The Thinker
• Pedestrian accident where
client is left in vegetative
state, limited coverage.
• Client requires continuing
government services.
How do you want to handle
things?
Or…
Start Early,
That is Your
stick!
Grinch Pinata
Consider a Special Needs Trust
• Self Funded- 42 U.S.C. §1396p(d)(4)(A)
• Pooled- 42 U.S.C. § 1396p(d)(4)(C)
• 62 P.S. §1414, Pennsylvania Statute
providing for SNTs
Pooled
Options:
Todd Belisle
The Center for Special Needs
Trust Administration
4912 Creekside Drive
Clearwater, FL 33760
Todd.Belisle@centersmail.com
(877) 766-5331
Arc Community Trust of Pa.
1004 West 9th Ave
King of Prussia, PA 19406
Phone: 610-265-4788
Fax: 610-265-4688
info@arctrust.org
Special Needs Trust-Financials
Petition for Settlement and SNT
•
Part of Bryan’s medical bills were paid by the Commonwealth’s Department of Public Welfare (“DPW”),
which has asserted a lien in the amount of $250,757.12. (See DPW statement of claim attached as Ex.
I.) In accord with the statutory provisions, DPW is entitled to only 50% of net after counsel fees and
costs, 62 P.S. § 1409(b)(11), and Petitioner requests permission to hold in escrow the amount of
$17,791.85 in order to resolve the lien with DPW.
•
Petitioner will request that the Medicare and DPW liens be waived, based on the serious nature of the
injury, Bryan’s financial condition, and the hardship which paying the liens would inflict on him.
•
Bryan currently qualifies for Medicaid benefits, payable through Pennsylvania’s DPW, including
medical assistance and assistance with home care. He also receives Social Security Disability
payments.
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In order to maintain these necessary benefits, as well as any other benefits for which Bryan may be
eligible now or in the future, his natural guardian will create a Special Needs Trust. The documents to
establish the trust are attached as Ex. J. Petitioner requests this Court’s approve use of the trust and
grant permission for Bryan’s natural guardian, Pam, to establish the pooled Special Needs Trust for
Bryan Herrick’s benefit.
•
Petitioner and Petitioner’s counsel believe it is in the best interest of the incapacitated not to have
funds owned by Bryan or his natural guardian, Pam with whom he resides, but rather to have the
funds placed in a Special Needs Trust.
•
Petitioner requests the amount to be awarded to the incapacitated Bryan, be distributed to the Trustee
of the Special Needs Trust, and Petitioner’s counsel will provide the Court with proof of transfer to the
trustee within ninety (90) days of this Court’s approval of the Special Needs Trust.
Is fifty percent too much?
Recall: In the Third Circuit’s Tristani opinion it was
concerned about the procedure for a dispute over
the amount of the lien.
Sometimes you want to go…
But it doesn’t always
work out that way.
•Settlement before suit
•Obviously compromised value
•Significant lien
•Not a minor/incapcitated
person/deceased
•You want a hearing
DPW Bureau of Hearings and Appeals
http://www.dpw.state.pa.us/dpworganization/officeofadministr
ation/bureauofhearingsandappeals/index.htm
Standing Practice Order
http://www.dpw.state.pa.us/foradults/hearingsandappealsprocess/index.htm
Supplemental Manual
http://services.dpw.state.pa.us/oimpolicymanuals/manuals/bop/su/index.htm
•
You will find policies on:
– Fair hearing
– Scheduling the hearing
– Conduct of the hearing
Pa. Code Administrative Hearings
55 Pa. Code § 275
Late Breaking News
Dateline:
Friday,
November 30,
2012: 3:30pm.
Email
explaining how
it would come
about that our
clients would
be given the
opportunity to
have an
administrative
hearing.
If there is an indication that
the statement of claim is
under dispute and consensus
cannot be reached, then we
refer the case to our legal
office for creation of a
statement of claim with
appeal rights letter. This is
not a standard letter in our
suite of correspondence as it
requires the oversight of legal
counsel. The letter includes
instructions on how to appeal.
Ethics
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Here, you not only had to protect your client’s
interest in the claim by making sure the lien is
only what it should be…and maybe applying for
a waiver or compromise, but also
Have to protect against the loss of future
government services.
Rule 1.1 Competence
– A lawyer shall provide competent representation
to a client. Competent representation requires
the legal knowledge, skill, thoroughness and
preparation reasonably necessary for the
representation.
Rule 3.1 Meritorious Claims and Contentions
– A lawyer shall not bring or defend a proceeding,
or assert or controvert an issue therein, unless
there is a basis in law and fact for doing so that
is not frivolous, which includes a good faith
argument for an extension, modification or
reversal of existing law.
Clean Up
If I haven’t
said it
enough
•Start Early
•Treat DPW rep like an adjuster,
if they ask you to pull, don’t
push.
•Remember what your client
wants is the check, after you
have told them the case is
settled.
•Save the pushing for when it
•matters.