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Third Party Liability, Liens, and Workers Compensation
By Isaac S. Schreibman, Esq.
Presented to the WisconsinRevenue Cycle Co-op/AAHAMMay 8, 2014
Agenda• Defining Third Party Liability
• Hospital Liens: Protecting Provider Rights to Reimbursement▫ How Does it Work in Wisconsin?
▫ Required Elements and Recommended Perfection Tips
▫ Sample Lien
• The Reimbursement Process▫ Importance of Follow Up
▫ Additional Reimbursement Opportunities
▫ Lien Adjudication
▫ Evaluating Settlement Offers
▫ How to Handle Bankruptcy
• Workers Compensation
• Case Studies
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Defining Third Party Liability: Important Terms
• Med Pay/Personal Injury Protection: Patient’s auto policy▫ Limited benefits ▫ Claims are paid in the order they are submitted and until benefits
are exhausted.
• Liability Insurance: Negligent party
• Underinsured or Uninsured Motorist Protection: Patient auto insurance
• Subrogation: Patient right to recover is transferred to a third party (e.g. health insurance or Medicare) via contract and after payment
• Statute of Limitations: Personal injury case
▫ In Wisconsin, must be filed within 3 years of occurrence
• Lien: Creditor’s secured interest
• Tortfeasor: Negligent party
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Defining Third Party Liability: Negligence
“The omission to do something which a reasonable
man, guided by those considerations which
ordinarily regulate human affairs, would do, or
doing something which a prudent and reasonable
man would not do.”~Ballentine’s Law Dictionary
Not all accidents and injuries are the result of
negligence!
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Defining Third Party Liability: Common Types of Liability Claims
Defining Third Party Liability: Anatomy of a Personal Injury Claim
• Auto Driver• Auto Owner• Pedestrian• Bicyclist• Homeowner• Business Owner• Parents• Governmental Entities• Manufacturers (Product Liability)• Contributory Negligence
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Identifying Third Party Liability
• Attorney requests for bills or medical records
• Emergency room care
• Police or EMT reports
• Patient contact/interview
• Therapy charges
• Trauma diagnoses
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Defining Third Party Liability: Indications of a Case
• High-dollar open balance accounts (greater than $10,000)
• Accounts with communication (written or verbal) from an attorney representing a patient:▫ Attorney requests for itemized bills or medical records▫ Settlement offers or requests to reduce the outstanding
charges▫ Legal pleadings (e.g. Subpoena, Complaint)
Always evaluate for potential third party reimbursement or Financial Assistance eligibility prior to sending accounts to
collections.
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Hospital Liens: Protecting Provider Rights to
Reimbursement • Why should I pursue liability cases?
▫ Maximize reimbursement and potentially recover total charges
▫ Creates a secured interest▫ Creates a right to payment from third parties▫ Allows providers to built trust with patients by advising
patients of their rights to a liability claim
• What does it take to pursue a liability case? ▫ Dealing with patient’s attorneys▫ Specialized, thorough, detailed knowledge of regulations
and process▫ Preparation and perfection of Hospital Lien
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Hospital Liens: Protecting Provider Rights to Reimbursement
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Injured Party
Medical Provide
r
Hospital Lien
Negligent Party
Hospital Liens: Protecting Provider Rights to
Reimbursement• How Does it Work in Wisconsin?
▫ Lien right is created by state statute. Strict compliance with all provisions is required (Chapter 779.80-Wisconsin Revised Statues).
▫ A hospital lien attaches to “any and all rights of action, suits, claims, demands…which such injured person…might have against any such other person for damages on account of such injuries, for the amount of the reasonable and necessary charges of such hospital.”
▫ Third party payers are liable to the hospital for the amount of the lien for one year from the date of the payment. 779.80(4) WRS
Third party payers may advise they have received a release or patient attorney has assumed responsibility……the payer remains liable for payment until the hospital releases its lien!
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Hospital Liens: Protecting Provider Rights to
Reimbursement• Required Lien Elements:
▫ Name & address of patient (injured party)▫ Date and location of accident/injury▫ Name & address of hospital▫ Name & address of Tortfeasor
• Recommended Lien Elements:▫ Liability insurance carrier▫ Lien should be be “verified”
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Perfecting the Hospital LienProtecting Provider Rights to
Reimbursement▫ File in the circuit court of the county where the injuries
occurred or where the hospital is located.
▫ File within 60 days of patient’s discharge from the hospital.▫ Send a copy of the notice by certified mail to the injured
party and the person liable for those injuries within 10 days of filing the notice of lien. Include the date of filing.
▫ The hospital shall also serve a copy of the notice of lien on any insurer which has insured the party alleged to be liable for the injuries.
“If such hospital fails to give notice if the name and address of the person injured or the person allegedly liable for the
injury are known or should be known, the lien shall be void.” 779.80 WRS Section (3)(b)
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Hospital Liens: Protecting Provider Rights to Reimbursement
• Want a perfect lien? Know the details:
▫ Negligent Party (Tortfeasor)
▫ Negligent Party’s attorney
▫ Negligent Party’s liability insurance
▫ Other negligent parties
Liens should be served on all parties who have or may have funds payable to the injured party.
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Sample Lien: Header Information
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NOTICE OF HOSPITAL LIEN Injured Party: Baron Rollo
27763 W. Lakeview Drive N Lake Barrington,IL60084
Injured Party's Attorney: Dewey, Cheatum and Howe
2525 Dempster Evanston,IL 60202
Liable Party: Jim Jones P.O. Box 456 Los Angeles, CA 89898
Liability Carrier: Mutual Insurance Company
5420 W South St. Philadelphia, PA 45124
Claim No.:B1234
Additional Liable Party: Acme Truck Co. 1417 E. West Rd Milwaukee, W! 40151
Liability Carrier: State Insurance Co
1 Robinson St New Orleans, LA 78487
Claim No.:A1234
Sample Lien:Body Content
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You are hereby notified that Baron Rollo, residing at 27763 W. Lakevie w Drive, N. Lake Barrington, IL 60084 was injured on or about 03/11/12, at SR 35 and Ely Road, Neenah, WI as a result of the negligence of Jim Jones , P.O. Box 456,Los Angeles, CA 89898.
You appear to be holding funds or expect to be holding funds in the futureagainst which Memorial claims a Hospital-Hospital Lien Baron Rollo is a patient in the hospital indicated below or was a patient from 04/12/11
due to said injuries.
Memorial Hospital- located at P.O. Box 841, Wauconda, IL 600 84, claims a lien upon any claim or
demand or cause of action which the said injured party may have against the alleged liable party, and against any funds you may have presently or in the future which may be directed as payment to the
injured party.
This lien is authorized by the terms and provisions of the statutes of the State of Wisconsin (Ch. 779.80 WRS) relating to Hospital Liens. This lien is for the amount of the reasonable and necessary charges for
the services rendered and to be rendered in t he treatment, care and maintenance of such injured person.
All notices, including any notice to adjudicate are to be sent to The Law Office of Isaac S. Schreibman at the address below.
Amount of Lien: $100.00
Sample Lien:Concluding Elements
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Date: April 15, 2012 Client: Memorial Hospital-Test Account(s): 000123
By: The Law Office of Isaac S. Schreibman Attorney for Memorial Hospital-Test P.O. Box 841 Wauconda,IL 60084 847-756-7606
VERIFICATION _________________________ being duly sworn on his/her oath deposes and says that she/he is the duly authorized agent of Memorial Hospital-Test,that she/he has read the foregoing NOTICE OF HEALTHCARE PROVIDER LIEN and that all of the facts therein stated are true and correct. PROOF OF SERVICE The undersigned, being of legal age and being first duly sworn on oath, deposes and states that on ___________________, I served the foregoing Notice of Hospital Lien upon the above-mentioned persons by mailing a true copy thereof by certified mail and/or fax, email,regular mail to the above named persons at their respective addresses above shown. Sworn and Subscribed before me on this______day of _____________, 2012. ____________________________ Notary Public/Attorney State of Illinois County of Lake
The Reimbursement Process: Executing Diligent Follow Up
• Contact all parties and confirm lien was received
• Confirm case status with patients’ attorneys and liability carriers
• Confirm maximum benefits available
• Confirm liens served by other providers
• Follow up every 45-60 days
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The Reimbursement Process: Additional Reimbursement
Opportunities• Workers Compensation
• Check for health insurance
• Review HMO contracts▫ May be obligated to accept payment from health insurer
• Medicaid and Medicare▫ Payers of “Last Resort”
▫ Provider must make an “election”
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The Reimbursement Process: Medicare as a Secondary Payer (MSP)
• Medicare pays only after all other potential third party sources of payment
• First 120 days after service, provider must pursue third party
• After 120 days, provider can bill Medicare if it appears the third party will not pay “promptly”, or at all
• Provider must release lien if Medicare is billed
• Careful evaluation of third party payment potential is required to make correct “election”. Be aware of billing deadlines.
• Liens will result in higher reimbursement than Medicare (in most cases)
• Medicare has priority to all other liens at the time of settlement of the liability case
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• No set percentage or amount for provider provided for by statute
• Wisconsin statute provides for no minimum recovery by patient
• Court has the authority to adjudicate liens among lien holders
• Patient is responsible for any amounts remaining after partial payment of lien, unless adjudicated or compromised
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The Reimbursement Process: Adjudication of Liens
The Reimbursement Process: Evaluating Settlement Offers
• Total amount of the settlement
• Amounts and “types” of other liens
• Distinguish between “bills” and perfected liens
• Offer to compromise account or lien
• Patient’s attorneys willing to reduce fee?
• Patient willing to complete a financial assistance
application for balance remaining after settlement?
• Medicare liens
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The Reimbursement Process: How to Handle Bankruptcy
• Lien must be perfected prior to bankruptcy
• Claim should be scheduled as “Priority and Secured”
• Valid liens will survive if objection to discharge is filed (adversary claim)
• Discharge by Bankruptcy Court terminates patient responsibility but not lien
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Workers Compensation• Process for adjudication of claims to prevent employees from
suing employers for injuries sustained in the workplace
• Healthcare providers have no right to a lien
• Patient is not responsible for payment unless:
▫ Patient or attorney are not cooperative
▫ Injuries found to be “non work-related”
• Compensates injured employees for actual losses, not “pain and suffering” or punitive damages to punish the negligent party
• Claims generally resolved faster than liability cases in state court
• Employers are required to have Workers Compensation Insurance
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Liability vs. Workers Compensation
Liability Workers Compensation
Attorney Fees Agreement between client and attorney
Set by statute
Hospital Liens Yes No
Standard of Proof
Negligence Within the scope of employment
Damages Determined by judge or jury
Set by statutes and regulations
Forum State Court Administrative Agency
Initial Inquiry (Written request to attorney)
• In order to assist us in completing our investigation, please provide the following information;
• Did the Patient have health insurance• Date of Injury• Nature of injury• Confirm name of employer• Name of employer's insurance carrier• Adjuster contact information• Copy of the Notice of Application
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Process and Procedure
•Department of Workforce Development•File case-if damages not paid voluntarily
by employer•Notice of Application•Answer (within 20 days)•End of Healing (form 16(b))•Certificate of Readiness
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Documents
•Application•Employer’s Answer (within 20 days)•Certificate of Readiness•Notice of Hearing (2 months)•Hearing Date (2-4 months from Notice)•Hearing in front of an Administrative Law
Judge•Settlement Agreement-Needs to be
approved by DWD-Payment within 21 days of approval
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Process and Procedure (continued)•Hearing Date (60-120 dates from filing of
notice)•File WCK3-list of medical expenses with
supporting bills•Hearing (evidence and witnesses)-
Administrative Law Judge•Reimbursement Rate-Reasonable and
Customary Charges•Employee has right to bring a third party
action (liability)
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Workers Compensation and Health Insurance
•Workers Compensation denial letter•Demand payment from Employer (Health
Fund)•Advise of the right of Subrogation•Enlist the assistance of the patient’s
attorney•Submit denial letter and itemized bills
with medical records
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Employers without Workers Compensation Insurance
•Wisconsin Uninsured Employers Fund•Subrogation•ASU Group (State Adjuster)
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Questions and Comments
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Case Studies: Intervention
• Situation:A patient was injured at work. Neither the patient’s health insurance carrier nor the workers compensation plan had paid the claim. The patient’s attorney filed suit in state court against the health insurer (an ERISA plan) and the workers compensation carrier. The health plan removed the case to federal court.
• Action:Our office filed a Petition to Intervene on behalf of the hospital, naming both insurance carriers as Defendants.
• Result:After holding a mediated settlement conference, a settlement was reached whereby each insurance company agreed to pay 50% of negotiated charges. The original bill was over 2 years old.
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Case Studies: The Imperfect Lien
• Situation:The patient settled a personal injury case for $100k. The hospital’s lien did not name the patient and was technically void under the relevant statute. The patient was an adult, but her mother had signed a payment guarantee at the time of service.
• Action:We advised the patient’s attorney all parties had “constructive” notice of the hospital's claim as the imperfect lien was recorded by the county court. To further leverage the payment guarantee, we emphasized that legal responsibility for the outstanding debt ($108k) fell upon the patient’s mother who had signed the guarantee of payment.
• Result:We negotiated a settlement of $30k.
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For Additional Information or Copies of Referenced Material:
Ike SchreibmanThe Law Office of Isaac S. Schreibman
[email protected] (C)847.970.8248 (F)
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