Private Health Insurance, ERISA, Hospital & Provider Liens
Misconceptions have existed with regard to ERISA plan subrogation for years. The questions of exactly what rights ERISA conveyed upon a health plan, and what duties it imposed upon claimants and counsel alike, lacked clear answers. This confusion led to many conflicting decisions and deep "circuit splits" among the courts asked to consider the powers and boundaries of ERISA. The chaos caused many to question whether any enforceable subrogation right even existed.
In an attempt to shed light on this confounding area of law, the United States Supreme Court issued a landmark decision in the case of Sereboff v. MAMSI (126 S.Ct. 1869) in May, 2006. There, the Court unanimously ruled that ERISA does indeed convey a strong, enforceable right of recovery upon qualifying health plans. However, with Sereboff's clarity came new questions that a plaintiff's attorney must answer in every case:
- Does my client's ERISA plan qualify for full reimbursement under the requirements set forth by the Supreme Court?
- Do any of the laws in my local federal jurisdiction affect the application of Sereboff to my client's case?
- Has my client yet gained the necessary "possession and control" of the settlement proceeds - a prerequisite to ERISA reimbursement under Sereboff?
- Given my client's recovery, is full reimbursement "appropriate" in this case, as required by ERISA itself?
However, emboldened by the Sereboff decision (and misunderstanding its application), many ERISA plans have begun to demand full reimbursement from claimants’ settlement proceeds. These plans ignore the questions above, and count on plaintiffs' counsel not knowing either when to ask these questions, or how to answer them.
Hospital / Provider Liens
Many states (and in some cases individual counties) have hospital lien laws. These laws allow hospitals and other providers to recoup payment for services provided. While many states have these types of laws, there is little uniformity in terms of these lien rights. Furthermore, some jurisdictions liberally interpret these laws so that technical deficiencies in establishing or seeking enforcement do not defeat payment to the hospitals. Other jurisdictions are less likely to ignore such deficiencies. Thus, the laws of each specific jurisdiction must be reviewed.
Generally speaking, parties to a settlement must know when and how the lien becomes enforceable, what constitutes notice of the lien, and who is liable for the lien upon settlement of the claim. Furthermore, the parties should be aware of how the facts of their case relate to applicable hospital lien statutes and any case law which has interpreted those statutes.
How does GRG help?
Full Resolution Process: Private Health Insurance / ERISA Liens
- Determine the applicable law (ERISA, FEHBA, federal, and / or state)
- Evaluate the strength of the lien holder’s right of recovery (based on plan language and applicable law)
- Establish the case with the respective tort recovery contractor and submit formal lien inquiry
- Provide an opinion letter stating our findings on lien holder’s interest and recommending course of action
- Audit and analyze all reimbursement claims to determine accuracy and “carve out” items unrelated to injury/settlement
- Review and negotiate all relevant claims to minimize the lien obligation (date of injury - date of settlement)
- Obtain the final reimbursement amount from all interested parties and provide reimbursement instructions to your firm
- Provide regular status updates on your case
How is GRG uniquely qualified to assist in Private Health Insurance / ERISA liens?
GRG has developed a practice that focuses on ERISA/private health insurance subrogation rights. Utilizing attorneys and subrogation analysts who specialize in the area, our firm has the professional resources to analyze these claims in the full light of all applicable law.
Firms that engage GRG’s vast resources:
- Expedite the process
- Achieve more favorable results
- Significantly lower internal costs, lost opportunities, and financial risks associated with complex obligations
- Eliminate post-settlement liability