8-27-12; Health Care Liens in IL Personal Injury/Wrongful Death Claims Re-Tailored by New ITLA-sponsored Legislation

We aren’t sure why but they skipped WC liens in making these changes. Assume you have a personal injury claim by Paula Plaintiff who is in a motor vehicle accident and runs up a $100,000 medical tab with ABC Hospital—the hospital puts Paula Plaintiff and her lawyer on notice of their lien. Paula Plaintiff’s lawyer is trying to get a jury to give Paula a $300,000 verdict—the jury finds Paula to be 40% at fault and awards $180,000. Does ABC Hospital get their $100K back, leaving Paula and her lawyer to split the $80K remainder?

Well, the answer to that question will change on January 1, 2013 because HB5823 quietly became law last week. The goal of this legislation was to apportion medical providers’ lien recoveries in personal injury/wrongful death litigation in IL. This is one of those sort of “stealth” laws where the forces of the Illinois Trial Lawyers Ass’n (our IL Plaintiff bar) quietly want something for their politically-donating membership and they unobtrusively get it. This bill has been signed by our Governor and will be in effect for all IL PI/Wrongful Death claims pending on January 1, 2013.

It does not affect workers’ comp liens but it will affect most other liens from health care providers. Without knowing it, doctors, hospitals and other care-providers have now statutorily “hired” the respective Plaintiff attorneys and will now owe them fees and litigation expenses despite the fact there is no true attorney-client relationship. The Illinois State Medical Society or ISMS did weigh in on this bill and appears to have eventually approved the final form. Our biggest concern with it will be how our judiciary handles these issues in negotiations and pretrials.

If it won’t bore you to death to read it, the new law says:

Sec. 30. Adjudication of rights. On petition filed by the injured person or the health care professional or health care provider and on the petitioner's written notice to all interested adverse parties, the circuit court shall adjudicate the rights of all interested parties and enforce their liens. A petition filed under this Section may be served upon the interested adverse parties by personal service, substitute service, or registered or certified mail.                      

Sec. 50. Subrogation claims. If a subrogation claim or other right of reimbursement claim that arises out of the payment of medical expenses or other benefits exists with respect to a claim for personal injury or death, and the personal injury or death estate claimant's recovery is diminished:             

(1) by comparative fault; or               

(2) by reason of the uncollectibility of the full value of the claim for personal injury or death resulting from limited liability insurance;

the subrogation claim or other right of reimbursement claim shall be diminished in the same proportion as the personal injury or death estate claimant's recovery is diminished. Unless otherwise agreed by the interested parties, the amount of comparative fault and the full value of the claim shall be determined by the court having jurisdiction over the matter. After reduction of the subrogation claim or other right of reimbursement claim due to either comparative fault or limited liability insurance, or both, the party asserting the subrogation claim or other right of reimbursement claim shall bear a pro rata share of the personal injury or death estate claimant's attorney’s fees and litigation expenses.

This Section 50 does not apply to any holder of a lien under the Workers' Compensation Act, the Workers' Occupational Diseases Act, or this Act including, but not limited to, licensed long-term care facilities, physicians, and hospitals, or to claims made to recoup uninsured payments pursuant to Section 143a of the Illinois Insurance Code or underinsured payments pursuant to Section 143a-2 of the Illinois Insurance Code. A subrogation claim or other right of reimbursement claim may be adjudicated even when a lien has not been filed regarding such claim.                   

You may note Plaintiff’s counsel is now entitled to fees/costs to recover the medical provider’s lien—the amount of the “fees” is not stated. This means they may be able to charge whatever they want to charge consistent with the ruling of the Circuit Court. Some plaintiff attorneys charge as much as 49% of the recovery after a hearing/appeal so the medical lien can be reduced by any comparative fault, lowered insurance coverage and as much as 49% for attorney fees and whatever for court costs.

We would appreciate your thoughts and comments. Please do not hesitate to post them on our award-winning blog.

8-20-12; Need your thoughts, WC legal gurus

We are dealing with a bill from a client for an air ambulance company that provided services for an injured worker. Our client paid the air ambulance folks the amounts provided under the IL WC Medical Fee Schedule—the air ambulance folks accepted the payment. The air ambulance company is now claiming they don’t have to accept state regulation of their services, as they are federal in scope—in short, they want a lot more moolah.

We feel this is an interesting legal question. We are asking for your thoughts and input. There is no question an emergency air ambulance provider is providing a medical service for workers due to a work-related medical problem. We agree employers getting the benefits of such services for their workers owe for such WC benefits under state law. However, the air ambulance folks are claiming state law doesn’t apply to regulate them or their prices, under U.S. law.

The problem with that approach is they aren’t ferrying injured workers around for fun. The air ambulance folks know they are providing state-based workers’ comp services. It is our reasoned opinion an employer, insurance carrier or TPA owes them whatever the medical fee schedule provides or you don’t owe them anything because employers only owe your injured workers what is due under state law. This follows what we call the “Coca-Cola® Machine” model of workers’ compensation claims administration; you can’t get a coffee from a Coke® machine. Similarly, the Illinois WC Commission or the Indiana WC Board can only dispense one product; they can award state WC benefits and can’t do anything else.

In fact, we don’t feel an injured worker’s attorney can ask the IWCC to award unlimited benefits or benefits due under federal laws or the laws of another state/country. We feel they are limited to awarding Illinois state benefits only.

The air ambulance folks might sue your worker in quantum meruit for the reasonable value of their services—you don’t owe the employee a defense to such a claim because that duty isn’t outlined in the IL WC Act. You only owe your workers for statutory state WC benefits.

We have done online research. We feel this is the best and most current statement of the law on the topic: http://www.insurancelitigationregulatorylaw.com/tags/workers-compensation-1/

Please let us know your thoughts on this interesting topic.

8-20-12; Finally, there may be Good News for U.S. business regarding a Medicare Set-Aside issue?!!?? Some relief for employers as they no longer have to set aside for TENS units. KCB&A also adds...

CMS has issued an August 2012 memo to clarify a June 8, 2012 Centers for Medicare & Medicaid Services announcement which confirmed TENS Units would no longer be covered as a Medicare allowable expense for Chronic Low Back Pain (CLBP). The CMS Decision Memo defined CLBP as “an episode of low back pain that has persisted for three months or longer; and is not a manifestation of a clearly defined and generally recognizable primary disease entity.”

The Decision Memo also stated that a TENS unit is not reasonable and necessary for the treatment of CLBP, in accordance with the provisions of section 1862(a)(1)(A) of the Social Security Act.

The recent change in coverage of TENS units for CLBP will have the following impacts upon the WCMSA proposal review process:

      Effective June 8, 2012, for those workers’ compensation (WC) cases settled prior to June 8, 2012, and where the settlement included pricing for TENS for CLBP, CMS will consider funds spent for TENS for CLBP by beneficiaries and claimants as being an appropriate expenditure of funds as part of the WCMSA.

      For those WC cases that were not settled prior to June 8, 2012, and where the WCMSAs proposal includes funding for TENS for CLBP as part of the WCMSA, CMS will re-review the cases and remove pricing for TENS for CLBP.

Regional Offices shall obtain from submitters requests for a case re-review, along with a signed statement indicating a settlement had not occurred prior to June 8, 2012. Once CMS performs a re-review of WCMSAs to remove pricing for TENs for CLBP, beneficiaries and claimants may not use funds from their WCMSA to pay for non-covered TENS Units for CLBP as this will now be deemed an inappropriate expenditure of WCMSA funds.

Our partner, Shawn R. Biery, J.D. holds the MSCC certification as does Matthew Ignoffo, J.D., MSCC and they rival any other similar credential holder in the U.S. with their knowledge of the murky and difficult process. Shawn can be reached at sbiery@keefe-law.com and Matt can be reached at mignoffo@keefe-law.com. We can provide legal and technical consultation along with rapid pricing of Medicare Set-Aside Trusts for clients, attorneys and other system participants at very reasonable prices.

If you would like a copy of the CMS memo mentioned above or have questions or concerns about such issues, please feel free to contact Shawn or Matt.