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How can liens impact a Texas medical malpractice settlement?

Painter Law Firm's frequently asked question (FAQ) series

I can’t think of a more dreaded topic for victims of medical malpractice than liens. That’s pretty remarkable, given the tort reform mania that’s plagued Texas for over 15 years.

When there’s a settlement or judgment resulting from medical malpractice, plaintiffs and their attorneys are required by law to protect certain interests of third parties.

As a Houston, Texas medical malpractice attorney, I find this unfair, but it’s something that we have to deal with. And at Painter Law Firm, we deal with it proactively, rather than waiting to the last moment.

There are three types of liens that commonly come up.

First, Medicare and Medicaid have super liens. I call them super because everyone involved in the litigation or recovery has an obligation to make sure that Medicare and Medicaid are put on notice and that their interests are satisfied. When I say everyone, that includes plaintiffs, defendants, attorneys, and insurance carriers.

As you might expect in dealing with the government, Medicare and Medicaid are often not in a hurry to respond to a request for information. That’s why it’s important for plaintiffs and their attorneys to put them on notice early in litigation and obtain a conditional payment summary.

The conditional payment summary is a list of the charges that Medicare and Medicaid believe are related to the alleged negligence. We make a practice of going through the list with a fine-toothed comb and request that any charges that aren’t directly related to the medical malpractice be removed.

Once there’s a settlement or recovery, the plaintiff’s lawyer must request Medicare and Medicaid provide a final payment demand. The good news is that, if handled properly by a competent attorney, the starting number will have been reduced to subtract unrelated charges. Then Medicare and Medicaid will take into account case-acquisition costs, including attorney’s fees and case expenses. This means that the repayment number will be less than what they paid related to the negligence.

Second, third-party insurance companies may have a subrogation interest. For all practical purposes, you can think of a subrogation as being a lien.

If you have an ERISA health insurance plan through your employer, it is highly likely that the insurance contract contains strong, employer-friendly language requiring repayment of expenses related to negligence of third parties.

When a health insurance company, or a recovery agent like Optum or Rawlings, suspects or learns of a medical malpractice case, they will put the plaintiff and the attorney on notice of the right to subrogate the claim. At that point, experienced Texas medical malpractice attorneys should request policy documents and a list of charges that they contend are related to the medical negligence.

As with Medicare and Medicaid charge summaries, at Painter Law Firm, we review the list closely and have been successful in having unrelated charges removed from the list early in the litigation.

Based on the current insurance-friendly federal and state laws, some ERISA health insurance plans have language that’s outright terrible for plaintiffs. Other insurance plans are just bad for plaintiffs. I think you get the picture. It’s important to get an idea of what you’re dealing with early in the process, to be in the best position for negotiating an acceptable resolution at the end.

Once we are put on notice, we have a legal obligation to protect the health insurance company’s rights. That means keeping the insurance company in the loop regarding settlement or recovery, and then negotiating the best possible reduction for our clients.

Finally, if the healthcare leading up to medical malpractice case started with hospital emergency room care required because of a car wreck or other accident, there may be a hospital lien as well.  These, too, are liens that must be resolved when there’s a recovery in a medical negligence case.

Liens are just one more reason that it’s import for victims of medical malpractice in Texas to hire a lawyer with significant direct experience in handling these complex claims.

Robert Painter is an award-winning medical malpractice attorney at Painter Law Firm PLLC, in Houston, Texas. He is a former hospital administrator who represents patients and family members in medical negligence and wrongful death lawsuits all over Texas. Contact him by calling 281-580-8800 or emailing him right now.


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