Resolving Health Care and Medical Provider Liens in Virginia Personal Injury Cases

 

How to Negotiate Health Care Provider and Health Insurance Liens Against Personal Injury and Car Accident Claims So That You Maximize Your Net Recovery

 

The state and federal government, health insurance companies, medical providers, the military, and workers’ compensation insurance carriers can assert a claim against your personal injury settlement for treatment rendered or medical bills paid on your behalf. These claims are known as personal injury liens. And if you’ve been hurt in a car accident, harmed by medical malpractice, or injured by a defective product, it’s important that your personal injury lawyer identify and negotiate all liens against your personal injury settlement or verdict.

 

As a personal injury attorney Corey Pollard’s goal is to maximize his injured clients’ financial recovery This requires not only obtaining fair value for the claim but also resolving the health insurance liens and claims for reimbursement or subrogation that often arise in accident cases.

 

This article explains:

 

  • What a personal injury lien is;
  • The difference between subrogation and reimbursement when discussing liens against personal injury recoveries;
  • Health care provider liens under Virginia Code Section 8.01-66.2;
  • Liens for government health care providers under Virginia Code Section 8.01-66.9;
  • Health care provider liens based on written agreement;
  • Liens held by Tricare, Medicaid, Medicare, fully funded ERISA health care plans, and FEHBA plans against personal injury recoveries; and
  • How to negotiate a lower lien against your personal injury claim so you recover more.

 

Keep reading to learn more about the applicable statutes, how they may apply to your case, and what you can do to reduce the amount of the health care provider lien so that you recover more damages for your personal injuries. If you have any questions or concerns, or if you’re looking for high-quality legal representation, contact Corey Pollard for a free consultation. We represent injury victims across the state, including those in Richmond, Charlottesville, Fairfax, Newport News, and Virginia Beach.

 

What is a Lien?

 

A lien is an interest that one party asserts against another person’s property.

 

Your mortgage, for example, is a lien. The mortgage company has an interest in your house until you have made all the payments owed under the mortgage. If you fail to make a payment on time, then the lender can use its lien to force a sale of your house or to take over possession over the property. A car loan is another example of a lien.

 

Liens are also common in Virginia personal injury cases. In this context a lien is a claim against the injured person’s financial recovery – either through settlement or verdict. A valid lien must be paid or negotiated before any money can be distributed to the injured person.

 

Subrogation vs. Reimbursement When Discussing Liens Against Accident Claims

 

The terms “subrogation” and “reimbursement” are often used interchangeably when discussing liens against personal injury claims. But they are different.

 

When a health plan has a right of reimbursement it has a contractual claim for benefits paid on behalf of the injured person against the monies recovered in the personal injury claim. Usually the health insurance policy language governs how the lien is calculated.

 

When a health plan or medical provider has a right of subrogation it may stand in the injured person’s shoes and sue the negligent party to recover monies paid to or on behalf of the injured person.

 

In this article we use the term “lien” when discussing both the right of reimbursement and the right of subrogation for medical providers who render services to an injured person and health care plans that pay benefits on behalf of an injured person.

 

Health Care Provider Lien in Virginia Code Section 8.01-66.2

 

Virginia Code Section 8.01-66.2 provides health care providers with a lien against the person, firm, or corporation whose negligence caused your person injuries. Health care providers covered under this section include: public hospitals; private hospitals; nursing homes; physicians; nurses; physical therapists; pharmacists; chiropractors; and, emergency medical services and transportation.

 

There are, however, caps on the lien amounts for each health care provider. The caps are as follows:

 

  • $2,500.00 to hospitals and nursing homes;

 

  • $750.00 to each physical, nurse, physical therapist, or pharmacy;

 

  • $200.00 for each emergency medical services agency (ambulance service).

 

The law is unclear as to whether a hospital or nursing home can claim that each physician, nurse, or physical therapist involved in treatment related to the personal injuries is entitled to a separate lien in addition to the hospital’s lien amount of $2,500. This is an area of dispute, which means it is an area ripe for negotiation. The law does not prohibit a hospital that employees physicians or nurses, a practice that is becoming more common, from claiming both a hospital lien and a doctor lien.

 

The statutory health care provider lien in Section 8.01-66.2 is not perfected unless written notice of the lien is given to the injured person’s attorney or to the person, firm, or corporation whose negligence caused the person’s injuries. Virginia Code Section 8.01-66.5. If the medical provider fails to give written notice then it does not have a valid lien.

 

If an attorney receives notice of the health care provider’s lien and does not satisfy the lien out of the personal injury settlement or proceeds, then the lien holder may pursue a claim against the attorney. The attorney’s liability is limited to the amounts provided in Virginia Code Section 8.01-66.2, unless a state run medical facility is the lien holder. Because of the liability and ethical responsibilities imposed on your attorney, he or she will not release funds to you until all lien issues are resolved.

 

Health Care Provider Lien Based on Virginia Code Section 8.01-66.9

 

As discussed above Virginia Code Section 8.01-66.2 places a cap on the amount many hospitals and health care providers can recover from a negligent person or entity that caused personal injuries. Virginia Code Section 8.01-66.9, however, has no cap.

 

Virginia Code Section 8.01-66.9 allows a medical provider to claim a lien for the total amount of treatment if:

 

1. Treatment is paid pursuant to the Virginia Medical Assistance Program, the State/Local Hospitalization Program, and other programs of the Department of Medical Assistance Services, the Maternal and Child Health Program, or the Children’s Speciality Services Program; or

 

2. Treatment is provided at or paid for by any hospital or rehabilitation center operated by the Commonwealth of Virginia, the Department of Rehabilitative Services, or any state institution of higher education.

 

Because there is no cap on the health care provider lien against personal injury cases available under Virginia Code Section 8.01-66.9, your attorney should try to find a way to argue that the applicable lien is subject to the cap found in Va. Code Section 8.01-66.2.

 

Health Care Provider Lien Based on Written Agreement

 

Virginia Code Sections 8.01-66.2 and 8.01-66.9 are not the only ways that a health care provider can assert a lien against your personal injury claim. Some medical providers may agree to treat you after your initial accident or injury if you don’t have insurance, but only if you sign a written agreement stating that you will pay the provider in full after your personal injury claim is resolved. This is known as treating on a “lien basis,” and it is a common practice in both car accident and workers’ compensation cases. Your attorney may know qualified orthopedic doctors or neurologists who will treat you on a lien basis and provide evidence if necessary in your personal injury case.

 

Health Insurance Liens in Personal Injury and Car Accident Cases

 

Hospitals, physicians, and other medical providers are not the only ones with a lien against an injury victim’s recovery in Virginia. Health insurance plans also have liens – either through subrogation or reimbursement.

 

TRICARE Liens

 

Tricare, formerly called the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS), is a health care program that provides coverage to U.S. Armed Forces military personnel, military retirees, and their dependents. The Defense Health Agency (DHA) manages Tricare.

 

Tricare does not have a reimbursement claim against the proceeds of a personal injury case. Instead it has its own claim against the tortfeasor (i.e., the negligent person or entity that caused the personal injuries). The U.S. government may file a claim against the negligent party for the value of the medical services rendered to the injured person, either at a military treatment facility or by civilian medical providers paid for by the Tricare policy.

 

The injured party has an affirmative duty to cooperate with the federal government to secure reasonable value for the medical services rendered or benefits paid by the government. Though we recommend cooperating, we advise personal injury attorneys to avoid signing the Agreement to Protect the Government’s Interest because it may create ethical issues.

 

Medicaid Liens

 

In Virginia Medicaid is administered by the Department of Medical Assistive Services. Medicaid, therefore, has a valid reimbursement claim against personal injury cases.

 

Under Virginia Code Section 8.01-66.5 written notice of Medicaid’s lien is not required “if the attorney for the injured party knew that medical services were either provided or paid for by the Commonwealth.” If the injured party becomes aware of this fact, he or she must give written notice to the Department of Medical Assistance Services that suit has been filed.

 

Medicare

 

Medicare plays a large role in workers comp claims where the injured employee is also a Social Security Disability (SSD) beneficiary, or is expected to become a SSD beneficiary within 30 months of the date of settlement. It also plays an important role in personal injury cases.

 

The Medicare Secondary Payer Act states that Medicare is a secondary payer to other primary payers, including health insurance plans, in personal injury cases. Medicare has strong lien holder rights. It can seek recovery of its lien against any parties involved in a personal injury claim – the accident victim, the personal injury attorney, and the insurance company.

 

ERISA (Employee Retirement Income Security Act) Health Plan Liens

 

Fully self-funded ERISA health coverage plans have strong lien rights in Virginia, so long as the contract language includes subrogation and reimbursement claims.

 

If the ERISA health plan is not fully self-funded by the employer or does not provide for a reimbursement or subrogation claim, then the ERISA health plan does not have a valid claim.

 

FEHBA (Federal Employee Health Benefit Act) Liens

 

FEHBA plans have valid reimbursement claims against personal injury cases in Virginia.

 

How to Negotiate Lien Claims in Personal Injury and Motor Vehicle Accident Cases: Get the Lien Amount Lowered

 

Health care costs are out of control. And if you’ve ever reviewed an explanation of benefits or hospital bill, you know that it’s difficult to tell what you were billed for and why you were billed each amount. So it’s possible that the health care provider charges or insurance payments that make up the personal injury lien are unreasonable. Or that the bill is inaccurate or includes medical treatment that you did not receive.

 

You can question the reasonableness of the charges made by your health care providers claiming a lien pursuant to Section 8.01-66.2 by filing a petition in the court that would have jurisdiction over the claim if the health care provider were to assert a claim for medical expenses against you. The court will hear the matter and issue a decision five days after notice is given to the other party in interest (the health care provider). This procedural mechanism is provided by Virginia Code Section 8.01-66.7.

 

Another thing to remember when deciding whether to settle your personal injury claim: the lien provided in Section 8.01-66.2 for health care providers is inferior to the attorney’s lien for professional services rendered to the injured person.

 

After reviewing the lien claim to determine 1) if it is valid and 2) if it is valid, what the actual amount should be, your attorney can work on negotiating a reduction of the lien claim against your accident case.

 

It’s possible to get the health insurance plan or medical provider to accept less than the amount of money they billed you. Why would your hospital, doctor, or health care provider accept less money? Two reasons:

 

  • Medical providers are used to accepting less than the full amount they bill from insurance companies, Medicare, and Medicaid. Because of this, the medical provider may be worried that if you challenge the reasonableness of the fees charged for medical treatment you will win. The medical provider will have wasted time and money in attorney fees only to be told by the court that their charges are unreasonable. By negotiating with your attorney directly the medical provider can cut any losses and recover funds.

 

  • If the insurance company offers a settlement amount that would almost entirely go to your health insurance plan or medical providers’ liens, then you have no reason to accept the settlement offer. Instead you’ll go to trial, where you may lose. If you go to trial and lose, or receive a verdict that is lower than the settlement amount, then the health care provider may receive nothing or much less than you’re willing to give in lien negotiations. The health care provider can reduce its risk by negotiating the lien to a lower amount.

 

Trying to figure out the liens that health insurance, medical providers, ERISA, Medicare, Medicaid, or the hospital may have against your personal injury recovery is complicated. But we can help.

 

Have a question about negotiating the health care plan or medical provider lien in your Virginia personal injury case? Contact Corey Pollard today. We help injured workers and accident victims negotiate health care provider liens in personal injury, medical malpractice, workers compensation, and long term disability claims.

 

Corey Pollard
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