Florida Supreme Court Comments on Medical Lien Resolution Outsourcing

The Florida Supreme Court recently issued an Opinion on a proposed amendment to the Florida Bar Rules regarding the handling of medical lien resolution and subrogation in contingency fee practices. The Opinion essentially leaves the rule unchanged, and does not preclude Florida attorneys from engaging 3rd parties to assist with these complex and ever changing healthcare reimbursement obligations.

On April 12, 2012, the Supreme Court of Florida (hereinafter, “Court”) issued its Biannual Report on Proposed Amendments to the Rules Regulating the Florida Bar. One amendment under consideration included a proposed amendment to Rule 4-1.5 (Fees and Costs for Legal Services).

Proposed Amendment to Florida Bar Rule 4-1.5

• Contingent fee attorneys in personal injury or wrongful death matters must include language in their fee contracts regarding the scope of representation relating to subrogation and lien resolution services.
• Medical lien and subrogation claims may be referred to another attorney for resolution with the client’s informed consent.

Florida Supreme Court’s Decision

• The Court declined to adopt the proposed amendment.
• The Court further noted “…lawyers should, as part of the representation, also represent the client in resolving medical liens and subrogation claims related to the underlying case.”

What does this mean for Florida personal injury attorneys?

By declining to adopt the proposed amendment, the Court was simply unwilling to force Florida personal injury attorneys to define the scope of their representation regarding the handling of medical lien resolution and subrogation matters (i.e. to determine if they were going to bifurcate the handling of the underlying injury case from the handling of the associated medical liens). The Court, however, took steps to clarify that bifurcating the medical liens from the associated injury case and referring the medical lien resolution and subrogation matter to another attorney (as a separate matter) would likely be impermissible.

The question of whether it is ethically permissible for Florida personal injury attorneys to engage or “outsource” to third party lien-resolution specialists to handle medical lien resolution and subrogation matters on behalf of the clients they continue to represent was not addressed by the Court. The Court focused on who “represents” the client in these ancillary matters. Here, the Court was echoing the American Bar Association , as well as certain other state and local ethics opinions on the topic of outsourcing where those opinions require that the attorney in the underlying matter maintain ultimate responsibility for the outsourced work.

Without specific guidance from the Florida Supreme Court, Florida personal injury attorneys must look to existing Florida Bar Rule 4-1.5. In addition, the aforementioned opinions from other jurisdictions may help inform the attorney’s decision whether to outsource various aspects of a personal injury matter to third parties. The same principles would apply to all types of experts and other third parties who are engaged to assist with liability, damages, causation, and other components of a personal injury matter.

The basic requirements for outsourcing legal and non-legal work are consistent in all referenced opinions:

1. Protect confidential information.
2. Ensure that the service providers are competent and suitably trained.
3. Obtain the client’s informed consent.
4. Outsourcing attorney maintains ultimate responsibility for outsourced work.
5. The client gets a net benefit out of the arrangement (if passing fee to client)
6. The fees are reasonable (if passing the fee to the client)

When it comes to outsourcing medical lien resolution and subrogation matters, many attorneys have found that the growing complexity in this area, as well as the potential impact on their client’s net recovery and future benefits are reasons enough to seek third party assistance. The recent Florida Supreme Court opinion does not limit the ability of Florida personal injury attorneys to engage third party experts to ensure all related healthcare matters are addressed appropriately, so long as the personal injury attorney continues to “represent” the client.

Garretson Resolution Group is available to answer your questions about the provisions of this Client Advisory. Please contact us if you would like us to review or help develop your internal processes and to provide training for all parties that are involved in your healthcare compliance processes. Tate Johnson, our subject matter expert on ethics, can be reached at tgjohnson@garretsongroup.com or
513-794-0400 with any questions.