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Understanding Health Insurance Liens and Their Importance to Anyone New to Personal Injury Law

Anyone new to the personal injury law practice must understand health insurance liens. In a personal injury case, a lien claims arises when an insurance company or government agency pays the medical bills of an injured plaintiff, who later makes a recovery against the negligence person’s insurance company.  

A good way to learn about liens is to understand the history of lien recovery.  Prior to 1988, health insurance lien claims were relatively uncommon. That all changed in 1988 when Patrick B. McGinnis left his job at a large health insurance company and started Healthcare Recoveries in Louisville, Kentucky.

Healthcare Recoveries attempts to recover money paid out in claims for health insurance companies they represent.  A personal injury plaintiff, with health insurance, will have their medical bills paid by their health insurance company post accident.  Healthcare Recoveries researches the accident and uses, right to recovery language in the fine print of the health insurance contracts, in an attempt to recover the money the plaintiff and her attorney, which they received from the negligent defendant.  This 1996 article details the early story of Healthcare Recoveries, it’s success, and growth.

Fast forward to 2015 and you can see where Healthcare Recoveries stands today. This article shows what Mr. McGinnis’s original idea has become today.  Reading these articles will help you understand why you, the new personal injury lawyer, may be receiving letters from Equian, which has a web page called “got-a-letter.”

Here are three important legal decisions that will help new personal injury lawyers begin to understand the world of personal injury liens.

1. The United States Supreme Court’s decision in Arkansas Department of Health and Social Services v. Ahlborn, 547 U.S. 268 (2006) (“Ahlborn”) provides a framework to determine what portion of a settlement, judgment, or award represents payment for medical expenses or medical care, provided to an injured individual by their insurance company.  The key question to determine is what is the appropriate reimbursement amount for the insurance company that Equian represents.

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2. The California Supreme Court in Fitch v. Select Products (2005) 36 Cal.4th 812, explains the effect of a pure wrongful death claim on MediCal’s attempt to assert a recovery against a wrongful death only recovery.  Fitch is a good case to read for its discussion of the types of damages that are available in a “survival action” survival action C.C.P. 377.62 and a wrongful death claim, C.C.P. 377.60.

3. Montanile v. Board of Trustees of Nat. Elevator Industry Health Benefit Plan (2016) 136 S.Ct. 651, introduces you to how the ERISA law applies to health insurance liens in the context of a personal injury recovery.  Montanile, involved a health insurance plan that was attempting to reach the plaintiff’s portion of a $500,000 settlement secured against a drunk driver defendant.

In Signup to Settlement: A Personal Injury Bootcamp, we help you understand how to learn to respond to letters from Equian and reduce the amount of Equian’s claim, which means your client gets more money in their pocket.

A Big Win with “High Low Binding Arbitration”

It was 1995, I was 27 years old, suddenly I had a check for $64,000 in my pocket.

This is the story about my first big win as a new personal injury lawyer.  It’s a story of how curiosity and hustle come together to form a big win for our client and my first big attorney fee check.  This is a story about experts, alternative dispute resolution and settlement.

It was 1995, back then, I was single, living in an apartment in the Marina district of San Francisco.  Our apartment was just off Lombard Street near our restaurant of choice, Jack In the Box. I was living with my good friend Jay Campbell and working round the clock.  When I would come home on Friday nights Jay would greet me with his big warm smile and great sense of humor and say, “It’s Friday, only two more work days until Monday!”  His joke did not affect my desire to work less on the weekends. I was having fun. Each day flew by in what felt like a series of flashes and before I knew it the day was gone in what felt like moments.  I did not realize it at the time, but I was in the state of flow, doing what I wanted to do and loving it.

I had heard the term vocational rehabilitation expert, and was interested in meeting an expert that worked in this area.  Someone mentioned Ona Schissel’s name to me. At the time Ona was working as a vocational counselor and rehabilitation expert.  Her office was on Montgomery Street in San Francisco. I called her up and asked if she would meet with me and tell me about the kind of work she did and what it meant to be a vocational rehabilitation expert.  At the time my office was at 126 Post Street in San Francisco, Ona’s office was a short walk away. When I arrived Ona and I talked about her work, I asked some questions and she shared with me how a vocational counselors can help an injured person who can no longer work effectively in their chosen occupation due to the effects of an injury.  Ona looks at a person’s background, work history, aptitude and formal education and makes recommendations about fields of work they can still do post-injury. She helps people determine what types of work they have the aptitude and can actually do, given their post-injury physical ability. The level of post-injury physical ability is referred to as a person’s functional capacity.  There are health care providers that provided functional capacity testing for injured people who need to change jobs after an injury.

Eventually Ona asked what I was working on.  I shared with her that I had just opened my office and was focusing on trial work.  Ona looked at me and said, “I have a case I want you to look at.” She looked across her office to the top book shelf, stood up, walked over, reached up and pulled a case file off of her shelf.  She literally dusted off the cover of the file and said you should take a look at this case.

Ona was showing me the personal injury case file of Sidney Ford.  Sidney was a self employed barber from Richmond, who had slipped and fallen on the sidewalk near his shop.  The sidewalk had been ripped up by a construction company and a safe route of travel for the pedestrians. One day Sidney fell while navigating the negligently maintained construction site.  The fall caused an injury to Sidney’s back. Sidney’s treatment consisted of doctor’s evaluations and physical therapy at Kaiser hospital. Sidney was alleging that his low back had not improved after physical therapy and that he was living with chronic low back pain.  The lawyer Sidney was working with initially had substituted out of the case. This left Sidney to act as his own attorney. The legal lingo for this is that Sidney was acting in propria persona or In Pro Per. In Propria Persona is a latin phrase which literally means “in the person of yourself.”  Ms. Schissel was a consulting expert in the case and was doing Sidney a favor by helping him to find a lawyer that was willing to take on his case on a contingency fee. As is common for injured people, Sidney did not have enough money to pay an attorney an upfront retainer to work on an hourly basis to prosecute his claims in court.

That night I walked out of Ona’s office with Sidney’s file.  Shortly after, I called, we met and Sidney signed my contingency fee agreement. I became his attorney.  At the time I took over Sidney’s case, the case had already been filed with the court and all of the discovery was completed.  I recognized that the next step was to let the court know of my representation, inform the court that the discovery was complete, and that the case should be set for trial.  The court agreed and set the case for trial.

Sidney and I showed up for the first day of trial ready.  The case was venued in Contra Costa County in the town of Martinez.  Our case was called. Defense counsel and I were invited into the Chambers of trial Judge Maria Elena James.  Judge James greeted us with her warm smile, compassionate, yet pragmatic demeanor. She quickly got to work to determine what could be done to help the plaintiff and the defendant reach a settlement that did not involve a two week jury trial in her courtroom.  

Judge James determined that the parties’ views of the settlement value of Sidney’s case were far apart.  The defendant viewed the case as defensible, meaning the jury would not find any negligence. And even if they did find some negligence on the part of the construction company, the jury would also find significant comparative negligence on Sidney. They would argue that he should have seen and avoided the open and obvious condition that caused him to fall.  Further, the defense viewed Sidney’s injuries as nothing more than what the insurance industry refers to as “Soft Tissue” injuries with “no objective findings” to verify his complaints of pain. Essentially, Sidney may say he was hurt, but the jury will have to take his word for it. Because there is no objective test result (x-ray or MRI) to verify what was causing the pain inside of Sidney’s back.  The last settlement offer of the defendant was $10,000 dollars.

Sidney’s view of the case was that his life been forever changed for the worse because of the defendant’s negligence. This negligence caused his now lifelong, chronic low back pain.  Sidney would not consider any settlement offer that was not well above $100,000 dollars. It looked like the case was headed for a jury trial.

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After about an hour of discussions, the prospects of any settlement looked unlikely, Judge James raised the idea of resolving the case with an agreement for high low binding arbitration.  Her specific proposal was a binding high low arbitration with a low of $10,000 and a high of $200,000. What this meant was that instead of the case being heard and decided by a jury of 12 people in Judge James’s courtroom over the next two weeks, the parties would instead agree to hire an arbitrator.  A neutral attorney in the community would hear the facts of the case and decide the factual issues of negligence and damages. The decision would be binding, meaning a final outcome on the parties that was not appealable. Such an arbitration could be done in a few hours at the arbitrators office. The parties agreed and the case was settled.  We just needed to conduct the arbitration and the case was over.

Defense counsel and I hired Peter Elkind, a mediator and arbitrator from Oakland.  A date for the arbitration was agreed to and set for Mr. Elkind’s office in Oakland.  The case was presented based on the photographs of the scene and the relevant medical records and reports from Kaiser where Sidney had his medical care post accident.  The only witnesses were Sidney and his wife, Maddy. The length of the hearing was about two hours.

Two weeks later an envelope arrived from Peter Elkind with an arbitration award of $160,000.  After, attorney fees, case costs and the Kaiser lien were deducted Mr. Ford received a check for $86,000.  My attorney fee was $64,000. This was the first real money I made as a plaintiff lawyer.

Expert Witnesses: What Have We Learned From The Case of the Audacious Supermarket Site Inspection?

Sign-up to Settlement: A Personal Injury Bootcamp looks at the issue of both formal and informal discovery and how they differ. The court of appeal decision in Pullin v. Superior Court (2000) 81 Cal App 4th 1161 looked at the practical differences between the two types of discovery in the context of an informal site inspection at a Supermarket.

Pullin was a personal injury claim that arose from a slip-and-fall at a Von’s Supermarket in Los Angeles. The plaintiff attorney found himself in the uncomfortable position of having an unprepared expert, who was about to have his deposition taken. Plaintiff’s forensic safety engineer had not inspected the scene of the slip-and-fall, yet his deposition was about to be taken. Plaintiff’s attorney called Von’s counsel and asked for permission for his expert to “conduct tests” on the floor of the Supermarket. The defense lawyer denied the request, reminding the plaintiff’s lawyer that fact discovery was closed and the time had run for a properly noticed site inspection, pursuant to C.C.P. § 2031. Plaintiff responded by sending his expert to the store on their own, while the store was open for business. The expert examined the spot where the fall had occurred, used a “small machine” to test the floor and left. During the 15 minute inspection no one complained, no one asked the expert to leave and no damage was done to the floor.

Expert Witness

The expert was deposed the day after the informal inspection took place and they revealed the details of their informal site inspection conducted during store opening hours. The case proceeded to trial. At trial, the defendant moved in limine to exclude the expert’s opinion and the trial court agreed, finding the conduct “secretive” and “contrary to the spirit of our discovery laws.” Plaintiff filed a writ and the Court of Appeal overturned the trial judge’s exclusionary ruling.

Justice Miriam A. Vogel wrote the opinion and held that there is nothing in the Civil Discovery Act to prevent a party from conducting unilateral investigation, provided that the investigation is lawful. Low cost investigation should be encouraged and “evidence is not made inadmissible by the simple fact that it is obtained by investigation rather than by way of formal discovery,” Pullin at 1165.

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The question before us is whether property open to the public can be examined without recourse to section C.C.P. § 2031, Pullin at 1166. In answering this question, the justices examined the Los Angeles Municipal Code that governed private property which is open to the public. Because plaintiff’s forensic safety engineer, Ralph Engdahl, did not do anything to damage the property, no one asked him to leave during his inspection and he did not interfere with Von’s ability to conduct their business, “we do not see any unlawful conduct,” Pullin at 1165.

In Sign-up To Settlement’s session on Expert witnesses, we cover how to properly prepare an expert witness for deposition. The example set by the plaintiff attorney in Pullin is not ideal, however it was lawful and, ultimately, resulted in admissible evidence to support an expert’s opinion.

SEE ALSO:  10 Reasons Why Criminal Lawyers Make Excellent Civil Trial Attorneys.

10 Reasons Criminal Defense Lawyers Make Great Plaintiff Personal Injury Lawyers:

The next generation of great plaintiff personal injury lawyers are working in the criminal courts right now.  Former criminal lawyers make excellent civil trial attorneys because they have extensive jury trial experience.  Having a comfort level in front of juries allows criminal lawyers to quickly take advantage of the settlement leverage, created when a trial date is assigned to a personal injury case.

Here are the top ten reasons why lawyers working in the criminal courts, including criminal defense lawyers, public defenders, JAG Corp officers, prosecutors and district attorneys, will become this country’s next generation of plaintiff personal injury lawyers.

1. Criminal lawyers are comfortable using the adversarial process, to help get cases resolved.

They are comfortable with the risk reward calculus that must be weighed prior to a jury trial.

2. Civil depositions are easy for criminal lawyers.

Because of their trial experience, these lawyers are already skilled witness examiners.

3. Criminal defense lawyers are skilled cross-examiners.

You won’t have to relearn this skill if you convert from a criminal lawyer to a plaintiff personal injury lawyer.  The same concepts that make a good cross-examination apply on the civil side; except it’s easier,   because you now have depositions available for impeachment.

 4. Criminal lawyers already know evidence law.

The rules of evidence don’t change on the civil side.  They may relax a bit- that’s about it.  Criminal lawyers already know the hearsay rule and all the exceptions.  These lawyers already know how to lay foundations for the introduction and admission of documents and photographs.

5. Criminal lawyers are familiar with various Judge types.

Some are crabby and some are nice, but whichever type of judge they get, they already know how to deal with them.
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6. Criminal defense lawyers and public defenders feel comfortable working on cases where, initially, it appears the odds of winning are not favorable.

They already know it takes hours of creative thinking and learning, to discover a true defense for a criminal defendant.  This same skill can be put to use in challenging catastrophic personal injury cases, where the responsible party may not be apparent when the case first presents itself to the lawyer.

7. Criminal defense lawyers are not quick to judge others.

Criminal defense lawyers and plaintiff personal injury lawyers both represent people.  Criminal defense lawyers grow to understand that most people are valuable, lovable and credible in their own unique way.  Criminal defense lawyers understand how to discover the value and beauty in each and every person they represent.

8. Criminal lawyers have developed perspective.

They know that cases are not black and white.  They have a good understanding that, no matter how clear something appears initially, things may not be so clear at the end of the presentation of the evidence.

9. Trial Continuances:

There is a bit of difference here.  Criminal defense lawyers are commonly granted trial date continuances. Beware: that’s not the case on the civil  side.  Judges use the pressure of the trial date to get cases to settle.  It means that, if you do not file a timely motion to continue your trial date, with the proper amount of just cause, watch out: a civil trial judge may not grant the continuance.

10. Courage.

Trial work is not for the timid.  Lawyers working on the criminal side have already faced their fears and learned how to march forward.  This skill is just as valuable when standing up for the rights of an injured individual. 

If you are a criminal defense lawyer or a prosecutor who is interested in learning more about what it takes to go out on your own as a plaintiff personal injury law, check out Sign Up To Settlement, A  Personal Injury Boot Camp. Here’s the link: signuptosettlement.com/bootcamp.

New Personal Injury Lawyers: You Can Always Phone a Friend

In the lead up to the launch of Signup to Settlement: A Personal Injury Law Boot Camp, we asked our followers what their number one F.E.A.R. (False Expectation Appearing Real) was about beginning to practice personal injury law. One response was, “I am afraid I will make a mistake and lose the case.” Another lawyer responded, “I don’t want my client to lose, based upon my lack of knowledge and skill.” Let’s unpack these two answers and see what we can learn.

Practicing personal injury law is like a baseball game: generally, you will have time to think about what you need to do, before you are forced to act.

Let’s imagine you are the shortstop for your baseball team. It’s the bottom of the ninth inning, the bases are loaded with no outs, and the game is tied. Suddenly, you realize you have no idea what you are going to do if the ball is hit to you! What should you do? Call “time out”, meet with your teammates and determine a strategy. Problem solved. Now you know what to do, play the infield in and, if the ball is hit to you on the ground, throw home for the force play.

When practicing law, you can always “phone a friend”. Remember the television show Who Wants to Be a Millionaire? If a contestant did not know the answer to a question, they could phone a preselected friend. When practicing tort law, you can phone anyone you want! This includes other plaintiff personal injury lawyers.

Here is the beginning of a solution:

 Step one, when starting out as a new personal injury lawyer, is to have lunch with three of four established plaintiff personal injury lawyers.

These face-to-face meetings will open the door for you to call or email these lawyers with questions. Further, the Consumer Attorneys of California and the American Association of Justice have list servers that allow you to post questions to hundreds of plaintiff lawyers at the same time. Caveat. All new personal injury lawyers need to familiarize themselves with their jurisdiction’s applicable statutes of limitations for personal injury, property damage, professional negligence, medical malpractice, government liability, fraud, breach of contract, and product liability cases. Some jurisdictions have very short government claims limitations. Also, you never know when a person will decide to contact you the day before the applicable statute of limitations is running. You need to be able to identify those circumstances.

 Second, with serious injury cases, be careful to protect and preserve any product that could potentially give rise to a product liability case.

It’s hard to make a product liability claim without the product. In serious car accident cases, the vehicles need to be properly recovered and stored. Automobile crashworthiness or defect cases depend on an analysis of the vehicle post-accident, to determine a theory of liability. If a fire was arguably caused by a defective product, that product needs to be properly preserved and stored. When first talking with prospective clients, keep an eye out for evidence that needs to be preserved while the potential for a claim is being investigated.

In summary, most automobile and premise liability personal injury claims are straightforward and can be handled by newer lawyers that have taken the time to educate themselves about the basics of personal injury law. Remember, if you are unsure of what to do next, phone a friend. If you are interested in learning more about what it takes to be a competent personal injury lawyer, check us out at http://signuptosettlement.com/bootcamp.

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