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TIPS FOR HANDLING ERISA SUBROGATION LIENS IN PERSONAL INJURY CASES

Solving your client’s health care related liens often stands in the way of settling the personal injury case. ERISA liens have become exponentially more problematic post McCutchen, the most recent case from U.S. Supreme Court on the subject. The McCutchen ruling clarified the split amongst the lower courts regarding whether equitable defenses should apply to ERISA subrogation claims. The Court definitively ruled that equitable defenses do not apply, effectively limiting Plaintiff counsels’ most successful arguments to negotiate ERISA liens. ERISA plans and third party administrators are using McCutchen to wholesale refuse to except anything less than dollar for dollar reimbursement because of the perceived inability to lose under the Court’s new ruling.

While McCutchen does limit the ability to effectively negotiate the ERISA subrogation claim, there are several strategies that should be explored before conceding reimbursement. First, a determination of whether the Plan is self-funded or insured must be made. If the Plan is self-funded federal law preempts state law and McCutchen applies. If the plan is insured, meaning an insurance company is paying the health care expenses with its own monies, then State law applies to the interpretation of the plan documents and whether the plan has a right of reimbursement. The law varies from state to state, with the spectrum defined as no difference between state and federal law on one hand, to specific strict procedural controls that may limit the right of plan reimbursement on the other.

To determine whether the plan is self-funded or insured, you can request the Summary Plan Description from the Plan Administrator or Third Party Plan Administrator. There are sites that allow you to search for this information by employer and it’s free. If you would like more information on this process, please enter your email at the conclusion of this article to get immediate access to instructions. Other documents that should be requested include the Actual Plan or Contract, the Bargaining Agreement, the Latest Summary Annual Report, the Latest Terminal Report and the Trust Agreement.

The examination of the Plan documents together with the application of your state law can lead to possible defenses to the Plan’s right of reimbursement if the Plan is an insured Plan. Look for Plans that are silent as to attorney fees allocation to argue common fund doctrine to make the Plan contribute to the attorney fees thus reducing the overall right of reimbursement. Additionally, in certain jurisdictions the state law may allow for strict notice requirements regarding amounts claimed by the Plan to potentially bar the Plan’s reimbursement right. While occurring less frequently after McCutchen, check to make sure the insured Plan does not actively exclude or eliminate the Made Whole Doctrine which can be used a strong defense to reimbursement. If all else fails, argue the facts! Often a negotiation can be reached by detailing how the case will not be brought if the total amount of the reimbursement is required by the Plan. Another strategy with smaller self-funded Plans, may be to get your client to request that the owner or management waive the right of reimbursement when the settlement funds or policy limit is such that the client is clearly not made whole.

While the legal arguments and negotiation strategies have been discussed, there is a new and novel method to address the underlying ERISA lien in many personal injury cases, securing massive reductions in ERISA subrogation claims with little to no legal effort on the part of Plaintiff’s Counsel. While initially appearing counter intuitive, attacking the causation of your client’s injury in a safe and non-discoverable manner can attack the basis for the ERISA lien. Diagnostic Dating Specialists, LLC provides real time double blind expert reports from Board Certified Radiologists to determine if the injury is related or unrelated to the date of the incident forming the basis of the claim using objective findings and peer reviewed supported opinion. Approximately 80% of all DOI (“Date of Injury”) Reports determine that the injury is unrelated to the date of the accident. Armed with this report after a tentative settlement agreement, Plaintiff’s Counsel can manage his or her Client’s expectations and often reduce or eliminate the medical bills associated with expensive surgeries and treatments from the ERISA lien through an unbiased double blind medical opinion provided by a Board Certified Radiologist. The reports typically can be produced in two to five business days for less than $500.00 and is an expense to the case.

         All of the arguments made by Defense Counsel and the Insurance Company can be used along with this report to eliminate the need for time consuming research and challenging legal arguments and accomplish the goal of increasing the monies to the Client to effectuate faster and more lucrative settlements. Please contact us today for a free consultation on how our expert reports can assist you in settling those challenging personal injury cases that have ERISA liens preventing or inhibiting settlement. Mention this special code: BEAT ERISA within the next seven days and receive your first DOI report at a low introductory rate of $425.00. With a signed patient release, we can also will obtain the necessary medical scans/film on your behalf in an expedited manner. As a note, we have success with reducing Medicare and Medicaid liens through our expert process as well. Contact us today.

How do you use it?

DDS provides the only non-biased double blind expert reporting in the industry. Because the board certified radiologist does not know whether he or she is giving an opinion for an insurance company, Plaintiff’s or Claimant’s counsel, Defense counsel, third party adjusting firm or any other party, it removes any argument that the doctor’s opinion is influenced in any way by the ordering party. The goal of a non-biased report is to provide the highest level of credibility for the expert opinion provided. A non-biased Age of Injury Report (“AOI”) can be used in a variety of ways to help facilitate the effective management and resolution of your case or claim.

1The AOI is used as a claim’s management tool for either side. Early in the process, when diagnostic studies are ordered, our clients will have an AOI performed to know which direction the case or claim is heading. While the first read report provided by the original radiologist may identify certain findings on the MRI, their job is not to identify whether the findings are related to the date of the injury. Rather, the first read radiologist simply identifies what findings are present regardless of causation. Armed with objective information on causation, our clients can confidently move the case or claim in direction dictated by the AOI report.

1The AOI is used to negotiate the value of the claim or case. As we all know, many cases end up resolving prior to a hearing or trial of the underlying facts that make up the case or claim. When settling a case or claim, one of the major factors used to move the value up or down is causation. An AOI report provides a unique opportunity to present evidence to the opposing party to leverage the settlement value. Unfortunately, in the typical situation, both sides have hired a doctor or expert that will be perceived by the other as biased for the party paying for the expert opinion provided. This perception often has the effect of discrediting or devaluing what otherwise may be a valid opinion. In the settlement of a case or claim, you are trying to impart upon the other side the strength of your position. The double blind process used by DDS to shield our experts from the identity of the ordering party provides a report that cannot be discredited because of the usual bias arguments. Our clients have found that the opposing party almost has to accept our expert’s opinion because a judge or jury views the non-biased expert in a light much different than the typical expert opinion.

1The AOI report is a great client management tool. Often clients will take a position that the injury is related or unrelated to the date of the accident regardless of the facts present. Our clients use the AOI report to document the file and manage the client by providing an independent third party opinion that identifies the relationship between the injury and the date of the accident. Our report gives you the backup to explain why you are making the decisions you make to the client.

1The AOI report is strong evidence to support the case during litigation or trial of a matter. The AOI report is the initial engagement for your non-biased medical expert. In most states, you do not have to disclose the AOI report in a litigation scenario until you identify us as a testifying expert. We are also not a medical record because the opinion is not given for the purpose of treating the patient.

1...in certain liability situations, Plaintiff’s counsel and defense counsel use the AOI report in the defense of subrogation claims to show that certain medical bills are not associated with the date of the injury to reduce third party liability for medical bills, thus facilitating the settlement of the case or claim.

Additional ERISA Information

You can find out where to request this information by registering at www.freerisa.com. The site allows you to search for this information by employer and it’s free. Reviewing Form 5500 online is the fastest way to get an understanding of how the Plan is funded.  The Form 5500 is a federal filing that must be filed annually by each employer maintaining an ERISA plan.  You can pull up the latest Form 5500 at www.freerisa.com by searching the employer name.

After pulling up the latest Form 5500 for the Plan, look at page one, elements 9a (“plan funding arrangement”) and 9b (plan benefit arrangement”).  These elements list the following options:

(1)   Insurance;
(2)  Section 412(e)(3);
(3)   Trust;
(4)   General assets of the sponsor.

If boxes (3) and/or (4) are marked on both then there is no need for further inquiry the inquiry because trusts and general assets of the sponsor exclude all policies of insurance and therefore are fully self-funded Plans.  If one or more of the other two boxes are checked then you must review the schedules attached to Form 5500.

Search for Schedule A or C attached to Form 5500. These schedules further outline the relationship between the payor of benefits and the Plan.  As a note, with large companies the Form 5500 may have several benefits plans reported on the form and there will be multiple Schedule As and Cs attached to the Form 5500 (i.e. one for a vision plan; dental plan; life insurance plan, etc.). 

In this event, make sure you identify the schedules the address the health plan. Start by searching for the Schedule A form for the health plan.  If Schedule A includes the health plan, identify the following:

  1. Review named insurance company under Part 1(a);

  2. Review Part III (8);

    1. If Box (8)(a) “Health” to make sure it is checked which will be further verification that this is the health plan, if any other box in section (8) is marked other than (i) “Stop Loss,” the plan is an insured plan and state law applies.

    2. If the “Stop Loss” box is marked, Circuit court rulings identify that these plans are all ERISA plans and state law does not apply.

If no Schedule A for the health plan is attached, move to Schedule C.  Schedule C will reference to “claims processing,” “contract administrator,” and “plan administrator.”  An insurance carrier providing insurance would not be listed on a Schedule C and thus the plan should be a fully self-funded Plan.

 

TIPS FOR HANDLING ERISA SUBROGATION LIENS IN PERSONAL INJURY CASES

Solving your client’s health care related liens often stands in the way of settling the personal injury case. ERISA liens have become exponentially more problematic post McCutchen, the most recent case from U.S. Supreme Court on the subject. The McCutchen ruling clarified the split amongst the lower courts regarding whether equitable defenses should apply to ERISA subrogation claims. The Court definitively ruled that equitable defenses do not apply, effectively limiting Plaintiff counsels’ most successful arguments to negotiate ERISA liens. ERISA plans and third party administrators are using McCutchen to wholesale refuse to except anything less than dollar for dollar reimbursement because of the perceived inability to lose under the Court’s new ruling.

While McCutchen does limit the ability to effectively negotiate the ERISA subrogation claim, there are several strategies that should be explored before conceding reimbursement. First, a determination of whether the Plan is self-funded or insured must be made. If the Plan is self-funded federal law preempts state law and McCutchen applies. If the plan is insured, meaning an insurance company is paying the health care expenses with its own monies, then State law applies to the interpretation of the plan documents and whether the plan has a right of reimbursement. The law varies from state to state, with the spectrum defined as no difference between state and federal law on one hand, to specific strict procedural controls that may limit the right of plan reimbursement on the other.

To determine whether the plan is self-funded or insured, you can request the Summary Plan Description from the Plan Administrator or Third Party Plan Administrator. There are sites that allow you to search for this information by employer and it’s free. If you would like more information on this process, please enter your email at the conclusion of this article to get immediate access to instructions. Other documents that should be requested include the Actual Plan or Contract, the Bargaining Agreement, the Latest Summary Annual Report, the Latest Terminal Report and the Trust Agreement.

The examination of the Plan documents together with the application of your state law can lead to possible defenses to the Plan’s right of reimbursement if the Plan is an insured Plan. Look for Plans that are silent as to attorney fees allocation to argue common fund doctrine to make the Plan contribute to the attorney fees thus reducing the overall right of reimbursement. Additionally, in certain jurisdictions the state law may allow for strict notice requirements regarding amounts claimed by the Plan to potentially bar the Plan’s reimbursement right. While occurring less frequently after McCutchen, check to make sure the insured Plan does not actively exclude or eliminate the Made Whole Doctrine which can be used a strong defense to reimbursement. If all else fails, argue the facts! Often a negotiation can be reached by detailing how the case will not be brought if the total amount of the reimbursement is required by the Plan. Another strategy with smaller self-funded Plans, may be to get your client to request that the owner or management waive the right of reimbursement when the settlement funds or policy limit is such that the client is clearly not made whole.

While the legal arguments and negotiation strategies have been discussed, there is a new and novel method to address the underlying ERISA lien in many personal injury cases, securing massive reductions in ERISA subrogation claims with little to no legal effort on the part of Plaintiff’s Counsel. While initially appearing counter intuitive, attacking the causation of your client’s injury in a safe and non-discoverable manner can attack the basis for the ERISA lien. Diagnostic Dating Specialists, LLC provides real time double blind expert reports from Board Certified Radiologists to determine if the injury is related or unrelated to the date of the incident forming the basis of the claim using objective findings and peer reviewed supported opinion. Approximately 80% of all DOI (“Date of Injury”) Reports determine that the injury is unrelated to the date of the accident. Armed with this report after a tentative settlement agreement, Plaintiff’s Counsel can manage his or her Client’s expectations and often reduce or eliminate the medical bills associated with expensive surgeries and treatments from the ERISA lien through an unbiased double blind medical opinion provided by a Board Certified Radiologist. The reports typically can be produced in two to five business days for less than $500.00 and is an expense to the case.

         All of the arguments made by Defense Counsel and the Insurance Company can be used along with this report to eliminate the need for time consuming research and challenging legal arguments and accomplish the goal of increasing the monies to the Client to effectuate faster and more lucrative settlements. Please contact us today for a free consultation on how our expert reports can assist you in settling those challenging personal injury cases that have ERISA liens preventing or inhibiting settlement. Mention this special code: BEAT ERISA within the next seven days and receive your first DOI report at a low introductory rate of $425.00. With a signed patient release, we can also will obtain the necessary medical scans/film on your behalf in an expedited manner. As a note, we have success with reducing Medicare and Medicaid liens through our expert process as well. Contact us today.

Introduction

DDS, LLC satisfies the need for unbiased age of injury reporting in a cost effective, efficient manner. Our mission is to provide our clients with objective, detailed medical narratives from board certified radiologists through the reading of scans in order to clarify the true value of a claim.

Critical Information Support

Our team of Board Certified Radiologists will generate detailed evaluations, interpretations, and second opinions in a clear, concise medical narrative. Each report is presented and processed in a manner that adheres to HIPAA regulations and affords protection against expert testimony challenges during the litigation process. At DDS, we understand the time sensitivity of your industry and the ever growing complexity of your work. In response to your needs, we guarantee the delivery of the report within 10 business days of the receipt of the scan. Additionally, our medical personnel are available for expert depositions and testimony in support of your case.

An Indispensable Resource

You constantly work to ascertain the true value of a case. Our services provide an indispensable resource for your plan. Our reliability, efficiency, and high degree of professionalism will prove to save you time, money and energy when working towards a successful resolution of a case.