Third Party LIABILITY & Hospital LIENS

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Third Party Liability, Liens,
and Workers Compensation
By Isaac S. Schreibman, Esq.
Presented to the Wisconsin
Revenue Cycle Co-op/AAHAM
May 8, 2014
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Agenda
• Defining Third Party Liability
• Hospital Liens: Protecting Provider Rights to Reimbursement
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How Does it Work in Wisconsin?
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Required Elements and Recommended Perfection Tips
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Sample Lien
• The Reimbursement Process
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Importance of Follow Up
▫
Additional Reimbursement Opportunities
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Lien Adjudication
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Evaluating Settlement Offers
▫
How to Handle Bankruptcy
• Workers Compensation
• Case Studies
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Defining Third Party Liability:
Important Terms
• Med Pay/Personal Injury Protection: Patient’s auto policy
▫ Limited benefits
▫ Claims are paid in the order they are submitted and until benefits are exhausted.
• Liability Insurance: Negligent party
• Underinsured or Uninsured Motorist Protection: Patient auto
insurance
• Subrogation: Patient right to recover is transferred to a third party (e.g. health
insurance or Medicare) via contract and after payment
• Statute of Limitations: Personal injury case
▫ In Wisconsin, must be filed within 3 years of occurrence
• Lien: Creditor’s secured interest
• Tortfeasor: Negligent party
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Defining Third Party Liability:
Negligence
“The omission to do something which a reasonable
man, guided by those considerations which
ordinarily regulate human affairs, would do, or
doing something which a prudent and reasonable
man would not do.”
~Ballentine’s Law Dictionary
Not all accidents and injuries are the result of negligence!
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Defining Third Party Liability:
Common Types of Liability Claims
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Defining Third Party Liability:
Anatomy of a Personal Injury Claim
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Auto Driver
Auto Owner
Pedestrian
Bicyclist
Homeowner
Business Owner
Parents
Governmental Entities
Manufacturers (Product Liability)
Contributory Negligence
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Identifying Third Party Liability
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Attorney requests for bills or medical records
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Emergency room care
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Police or EMT reports
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Patient contact/interview
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Therapy charges
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Trauma diagnoses
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Defining Third Party Liability:
Indications of a Case
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High-dollar open balance accounts (greater than $10,000)
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Accounts with communication (written or verbal) from an
attorney representing a patient:
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Attorney requests for itemized bills or medical records
Settlement offers or requests to reduce the outstanding charges
Legal pleadings (e.g. Subpoena, Complaint)
Always evaluate for potential third party reimbursement or Financial
Assistance eligibility prior to sending accounts to collections.
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Hospital Liens:
Protecting Provider Rights to Reimbursement
• Why should I pursue liability cases?
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Maximize reimbursement and potentially recover total charges
Creates a secured interest
Creates a right to payment from third parties
Allows providers to built trust with patients by advising patients of
their rights to a liability claim
• What does it take to pursue a liability case?
▫ Dealing with patient’s attorneys
▫ Specialized, thorough, detailed knowledge of regulations and
process
▫ Preparation and perfection of Hospital Lien
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Hospital Liens:
Protecting Provider Rights to Reimbursement
Injured
Party
Negligent
Party
Medical
Provider
Hospital
Lien
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Hospital Liens:
Protecting Provider Rights to Reimbursement
• How Does it Work in Wisconsin?
▫ Lien right is created by state statute. Strict compliance with all
provisions is required (Chapter 779.80-Wisconsin Revised Statues).
▫ A hospital lien attaches to “any and all rights of action, suits, claims,
demands…which such injured person…might have against any such
other person for damages on account of such injuries, for the amount
of the reasonable and necessary charges of such hospital.”
▫ Third party payers are liable to the hospital for the amount of the lien
for one year from the date of the payment. 779.80(4) WRS
Third party payers may advise they have received a
release or patient attorney has assumed
responsibility……the payer remains liable for
payment until the hospital releases its lien!
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Hospital Liens:
Protecting Provider Rights to Reimbursement
• Required Lien Elements:
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Name & address of patient (injured party)
Date and location of accident/injury
Name & address of hospital
Name & address of Tortfeasor
• Recommended Lien Elements:
▫ Liability insurance carrier
▫ Lien should be be “verified”
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Perfecting the Hospital Lien
Protecting Provider Rights to Reimbursement
▫ File in the circuit court of the county where the injuries occurred or
where the hospital is located.
▫ File within 60 days of patient’s discharge from the hospital.
▫ Send a copy of the notice by certified mail to the injured party and the
person liable for those injuries within 10 days of filing the notice of
lien. Include the date of filing.
▫ The hospital shall also serve a copy of the notice of lien on any insurer
which has insured the party alleged to be liable for the injuries.
“If such hospital fails to give notice if the name and address of the
person injured or the person allegedly liable for the injury are known or
should be known, the lien shall be void.” 779.80 WRS Section (3)(b)
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Hospital Liens:
Protecting Provider Rights to Reimbursement
• Want a perfect lien? Know the details:
▫ Negligent Party (Tortfeasor)
▫ Negligent Party’s attorney
▫ Negligent Party’s liability insurance
▫ Other negligent parties
Liens should be served on all parties who have or may have
funds payable to the injured party.
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Sample Lien:
Header Information
NOTICE OF HOSPITAL LIEN
Injured Party:
Baron Rollo
27763 W. Lakeview Drive N
Lake Barrington,IL60084
Liability Carrier:
Mutual Insurance Company
5420 W South St.
Philadelphia, PA 45124
Claim No.:B1234
Injured Party's Attorney:
Dewey, Cheatum and Howe
2525 Dempster
Evanston,IL 60202
Liable Party:
Jim Jones
P.O. Box 456
Los Angeles, CA 89898
Claim No.:A1234
Additional Liable Party:
Acme Truck Co.
1417 E. West Rd
Milwaukee, W! 40151
Liability Carrier:
State Insurance Co
1 Robinson St
New Orleans, LA 78487
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Sample Lien:
Body Content
You are hereby notified that Baron Rollo, residing at 27763 W. Lakeview Drive, N. Lake Barrington, IL
60084 was injured on or about 03/11/12, at SR 35 and Ely Road, Neenah, WI as a result of the negligence
of Jim Jones , P.O. Box 456,Los Angeles, CA 89898.
You appear to be holding funds or expect to be holding funds in the future against which Memorial claims a
Hospital Lien Baron Rollo is a patient in the hospital indicated below or was a patient from 04/12/11
Hospitaldue to said injuries.
Memorial Hospitallocated
at P.O. Box 841, Wauconda, IL 60084, claims a lien upon any claim or
demand or cause of action which the said injured party may have against the alleged liable party, and
against any funds you may have presently or in the future which may be directed as payment to the
injured party.
This lien is authorized by the terms and provisions of the statutes of the State of Wisconsin (Ch. 779.80
WRS) relating to Hospital Liens. This lien is for the amount of the reasonable and necessary charges for
the services rendered and to be rendered in t he treatment, care and maintenance of such injured person.
All notices, including any notice to adjudicate are to be sent to The Law Office of Isaac S. Schreibman at
the address below.
Amount of Lien:
$100.00
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Sample Lien:
Concluding Elements
Date:
April 15, 2012
Client: Memorial Hospital-Test
Account(s):
000123
By:
The Law Office of Isaac S. Schreibman
Attorney for Memorial Hospital-Test
P.O. Box 841
Wauconda,IL 60084
847-756-7606
VERIFICATION
_________________________ being duly sworn on his/her oath deposes and says that she/he is the duly
authorized agent of Memorial Hospital-Test,that she/he has read the foregoing NOTICE OF
HEALTHCARE PROVIDER LIEN and that all of the facts therein stated are true and correct.
PROOF OF SERVICE
The undersigned, being of legal age and being first duly sworn on oath, deposes and states that on
___________________, I served the foregoing Notice of Hospital Lien upon the above-mentioned
persons by mailing a true copy thereof by certified mail and/or fax, email,regular mail to the above named
persons at their respective addresses above shown.
Sworn and Subscribed before me on this______day of _____________, 2012.
____________________________
Notary Public/Attorney
State of Illinois
County of Lake
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The Reimbursement Process:
Executing Diligent Follow Up
• Contact all parties and confirm lien
was received
• Confirm case status with patients’
attorneys and liability carriers
• Confirm maximum benefits available
• Confirm liens served by other
providers
• Follow up every 45-60 days
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The Reimbursement Process:
Additional Reimbursement Opportunities
• Workers Compensation
• Check for health insurance
• Review HMO contracts
▫ May be obligated to accept payment from health insurer
• Medicaid and Medicare
▫ Payers of “Last Resort”
▫ Provider must make an “election”
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The Reimbursement Process:
Medicare as a Secondary Payer (MSP)
• Medicare pays only after all other potential third party sources of payment
• First 120 days after service, provider must pursue third party
• After 120 days, provider can bill Medicare if it appears the third party will
not pay “promptly”, or at all
• Provider must release lien if Medicare is billed
• Careful evaluation of third party payment potential is required to make
correct “election”. Be aware of billing deadlines.
• Liens will result in higher reimbursement than Medicare (in most cases)
• Medicare has priority to all other liens at the time of settlement of the
liability case
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The Reimbursement Process:
Adjudication of Liens
• No set percentage or amount for provider provided for by
statute
• Wisconsin statute provides for no minimum recovery by patient
• Court has the authority to adjudicate liens among lien holders
• Patient is responsible for any amounts remaining after partial
payment of lien, unless adjudicated or compromised
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The Reimbursement Process:
Evaluating Settlement Offers
• Total amount of the settlement
• Amounts and “types” of other liens
• Distinguish between “bills” and perfected liens
• Offer to compromise account or lien
• Patient’s attorneys willing to reduce fee?
• Patient willing to complete a financial assistance application for
balance remaining after settlement?
• Medicare liens
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The Reimbursement Process:
How to Handle Bankruptcy
• Lien must be perfected prior to bankruptcy
• Claim should be scheduled as “Priority and
Secured”
• Valid liens will survive if objection to
discharge is filed (adversary claim)
• Discharge by Bankruptcy Court terminates
patient responsibility but not lien
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Workers Compensation
• Process for adjudication of claims to prevent employees from
suing employers for injuries sustained in the workplace
• Healthcare providers have no right to a lien
• Patient is not responsible for payment unless:
▫ Patient or attorney are not cooperative
▫ Injuries found to be “non work-related”
• Compensates injured employees for actual losses, not “pain and
suffering” or punitive damages to punish the negligent party
• Claims generally resolved faster than liability cases in state court
• Employers are required to have Workers Compensation
Insurance
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Liability vs. Workers Compensation
Liability
Workers Compensation
Attorney Fees
Agreement between
client and attorney
Set by statute
Hospital Liens
Yes
No
Standard of Proof
Negligence
Within the scope of employment
Damages
Determined by judge or Set by statutes and regulations
jury
Forum
State Court
Administrative Agency
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Initial Inquiry (Written request to
attorney)
• In order to assist us in completing our investigation,
please provide the following information;
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Did the Patient have health insurance
Date of Injury
Nature of injury
Confirm name of employer
Name of employer's insurance carrier
Adjuster contact information
Copy of the Notice of Application
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Process and Procedure
• Department of Workforce Development
• File case-if damages not paid voluntarily by
employer
• Notice of Application
• Answer (within 20 days)
• End of Healing (form 16(b))
• Certificate of Readiness
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Documents
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Application
Employer’s Answer (within 20 days)
Certificate of Readiness
Notice of Hearing (2 months)
Hearing Date (2-4 months from Notice)
Hearing in front of an Administrative Law Judge
Settlement Agreement-Needs to be approved by
DWD-Payment within 21 days of approval
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Process and Procedure (continued)
• Hearing Date (60-120 dates from filing of notice)
• File WCK3-list of medical expenses with
supporting bills
• Hearing (evidence and witnesses)-Administrative
Law Judge
• Reimbursement Rate-Reasonable and Customary
Charges
• Employee has right to bring a third party action
(liability)
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Workers Compensation and Health
Insurance
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Workers Compensation denial letter
Demand payment from Employer (Health Fund)
Advise of the right of Subrogation
Enlist the assistance of the patient’s attorney
Submit denial letter and itemized bills with
medical records
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Employers without Workers
Compensation Insurance
• Wisconsin Uninsured Employers Fund
• Subrogation
• ASU Group (State Adjuster)
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Questions and Comments
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Case Studies:
Intervention
• Situation:
A patient was injured at work. Neither the patient’s health insurance
carrier nor the workers compensation plan had paid the claim. The
patient’s attorney filed suit in state court against the health insurer (an
ERISA plan) and the workers compensation carrier. The health plan
removed the case to federal court.
• Action:
Our office filed a Petition to Intervene on behalf of the hospital, naming
both insurance carriers as Defendants.
• Result:
After holding a mediated settlement conference, a settlement was
reached whereby each insurance company agreed to pay 50% of
negotiated charges. The original bill was over 2 years old.
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Case Studies:
The Imperfect Lien
• Situation:
The patient settled a personal injury case for $100k. The hospital’s lien
did not name the patient and was technically void under the relevant
statute. The patient was an adult, but her mother had signed a payment
guarantee at the time of service.
• Action:
We advised the patient’s attorney all parties had “constructive” notice of
the hospital's claim as the imperfect lien was recorded by the county
court. To further leverage the payment guarantee, we emphasized that
legal responsibility for the outstanding debt ($108k) fell upon the
patient’s mother who had signed the guarantee of payment.
• Result:
We negotiated a settlement of $30k.
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For Additional Information or
Copies of Referenced Material:
Ike Schreibman
The Law Office of Isaac S. Schreibman
ike@ikeschreibmanlaw.com
847.756.7606 (C)
847.970.8248 (F)
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