All too often, the victim in a personal injury matter fails to maximize his or her recovery in a personal injury claim because they do not utilize all potential avenues of revenue available. Frequently, clients will not use personal medical insurance because they are told, or believe, it will not pay for “accident” related injuries. This is not true, and under the law, the group health insurance company must pay for any injuries to the insured for any reason. The catch, of course, is that the insurance company has a right to be reimbursed, commonly known as the right of “subrogation.” Much confusion has existed regarding the amount of that reimbursement right. Arguably, the attorney who collected the funds would have a right to payment for that collection which ultimately benefits the client. Some case law has suggested the proper amount of reduction should be the amount of attorney fees e.g. 33% or 40%. On the other hand, insurance companies have argued there should be no offset or discount.
The prudent attorney should realize and suggest to their respective clients that health insurance should be billed for any medical expenses when viable. The rationale is simple: health insurance entities have discounted contracted rates with certain providers and emergency facilities. Thus, a party who may be billed $3,000 for an emergency room visit, may only be obligated to pay $800 if they use their health coverage. Thus, this will greatly reduce the overall medical expenses. Even better, a reduction of the $800 bill (for attorney collection fee) as stated above, will even net the client even more: ($800 reduced by 33% = $264) So, a new negotiated rate and bill of $536 will settle the medical debt. The savings is obvious. In Nevada, this has been known as the “common fund doctrine” adopted from other states.
Similarly, Medicare is also a “collateral source” of paying medical expenses. Federal law governs and mandates repayment of Medicare benefits, and regardless of whether the attorney is on notice of a Medicare lien, they are on the hook for paying this. The downside with using Medicare is the long delay in getting final balances. The upside, is that Medicare will agree to the attorney discount mentioned above, due to 42 C.F.R. 411.37. In cases where automobile accident coverage is limited, complete “waiver” of the Medicare bill can be accomplished.
Erisa based insurance coverage, [Employee Retirement Income Security Act of 1974] has its own unique legal history. In 2002, the United States Supreme Court confirmed that ERISA plans cannot file a federal action to compel its insureds/ beneficiaries to reimburse the ERISA plan for medical benefits paid as a result of an injury caused by a third party. Any attempt to enforce a plan with reimbursement language is unenforceable in federal court. See Great-West Life & Annuity Ins. Co. v. Knudson (2002) 534 U.S. 204, 221. However more recently, the Court has more clearly identified that rights of reimbursement are now more likely due to the ruling in, SEREBOFF et ux. v. MID ATLANTIC MEDICAL SERVICES, INC., 126 S.Ct. 1869 (2006).
Medical liens, once acknowledged, must be paid back. There are specific issues we will not go into here, regarding notice of liens, and statutory lien notice requirements. Liens are nothing more than Assignments, or rights that have been passed. When a client signs a lien they have given the right to collect their medical bill to the physician or medical provider.
As a side note, The Nevada Supreme Court further stated that Attorney liens take priority over medical liens. “In addition to the authority above, we note that NRS 108.600(2) gives attorney liens priority over “hospital liens”: “No [hospital] lien shall apply or be allowed against any sum incurred by the injured party for necessary attorney fees, costs and expenses incurred by the injured party in securing a settlement, compromise or recovering damages by an action at law.” While DIS argues that hospital liens are distinguishable from medical service provider liens because hospitals treat the seriously injured, the distinction is de minimis. In any event, NRS 108.600(2) represents the general policy that attorney liens take priority over those of medical service providers.” Michel v. Dist. Ct., 117 Nev. Adv. Op. No. 16 February 22, 2001.
Medical payments is another way to pay for medical expenses. Medical payments also known as “Med-pay” is an optional coverage the victim has previously purchased on their vehicle. This coverage is excellent, and should be strongly recommended. Med-pay pays whether a party is at fault, or not at fault, and even pays if the party is “in or around” the vehicle, thus, if a tire is changed and an injury results med-pay will pay the claim. Med-pay has no right of reimbursement.
If you have specific questions contact Benson & Bingham regarding your medical expenses.
Making claims against Doctors or Physicians in Nevada falls under the Nevada revised statutes (NRS.) NRS 427 (A) Under the malpractice statute, the following medical providers must be sued with an Affidavit of malpractice: Nurse / Nurses, Doctor / Doctors, Physician / Physicians, Chiropractor / Chiropractors, Dentist / Dentists, Orthodontist / Orthodontists, Physical Therapist / Physical Therapy / Physical Therapists, Neurologists / Neurology, Orthopedic Surgeons / Orthopedic Surgery, Orthopedic Surgery, Optometry, Licensed nurses / nurse, podiatry doctor, doctor of podiatry medicine, eastern medicine doctors, oriental medicine doctors, medical laboratory techs and technicians, hospitals, emergency rooms, quick care units, or the staff of such facilities.
NRS 449.758 and requires a hospital to bill to health insurance and/or Medicare before any collection efforts can commence. Often, Hospitals and other health care providers attempt to decline health insurance payments for treatment rendered in an accident. This method is improper. They typically do this to get automobile medical payments benefits, which may pay them a higher rate then available under the health policy, or attempt to lien the respective personal injury accident 3rd party insurance for a higher bill. Accident victims who suffer expensive hospital bills need look no further than NRS 449.757, to make Hospitals collect from your health insurance. That law states:
NRS 449.757 Limitations on efforts of hospitals to collect; date for accrual of interest; rate of interest; limitations on additional fees.
1. When a person receives hospital care, the hospital must not proceed with any efforts to collect on any amount owed to the hospital for the hospital care from the responsible party, other than for any copayment or deductible, if the responsible party has health insurance or may be eligible for Medicaid, the Children’s Health Insurance Program or any other public program which may pay all or part of the bill, until the hospital has submitted a bill to the health insurance company or public program and the health insurance company or public program has made a determination concerning payment of the claim.
2. Collection efforts may begin and interest may begin to accrue on any amount owed to the hospital for hospital care which remains unpaid by the responsible party not sooner than 30 days after the responsible party is sent a bill by mail stating the amount that he or she is responsible to pay which has been established after receiving a determination concerning payment of the claim by any insurer or public program and after applying any discounts. Interest must accrue at a rate, which does not exceed the prime rate at the largest bank in Nevada as ascertained by the Commissioner of Financial Institutions on January 1 or July 1, as the case may be, immediately preceding the date on which the payment becomes due, plus 2 percent. The rate must be adjusted accordingly on each January 1 and July 1 thereafter until the payment is satisfied
3. Except for the interest authorized pursuant to subsection 2 and any court costs and attorney’s fees awarded by a court, no other fees may be charged concerning the amount that remains unpaid, including, without limitation, collection fees, other attorney’s fees or any other fees or costs.”
How Much is your Injury Worth? Check the Health Care Bluebook