New Mexico Injury Attorney Blog

An article in the National Journal last year reported that medical mistakes cost the nation's health care system tens of billions of dollars every year. Unfortunately, instead of getting serious about eliminating those errors, many tort reform advocates continue to argue for a change in personal injury laws, including caps on awards for medical malpractice. Far from offering robust healthcare savings, a look at the numbers and malpractice rates shows that the insurance companies are the only real winners in tort reform.

It is no secret that the healthcare industry spends billions of dollars in medical malpractice suits every year. According to Pamela Villarreal of the National Center for Policy Analysis between 18 to 45 cents of every dollar spent on healthcare in the U.S. is related to a mistake made by a healthcare provider. Jill Van Den Bos and colleagues at Milliman's Denver Health Practice reported that in 2008, cases involving post-surgery infections cost the industry $3.36 billion. In the same year, bedsores, a completely preventable condition, cost the industry $3.27 billion.

Considering the staggering costs to patients and medical providers, one might assume that there would be universal focus on making medical care safer. Not so. Instead, certain interest groups are actually working to reduce the degree to which medical providers are held accountable for their errors. New Mexico, for example, places several limitations on damages in civil cases. Under the Medical Malpractice Act (Act), NMSA 1978, there is a $600,000 cap for damages for medical malpractice. The cap excludes past medical costs and benefits, but the Act prohibits monetary damages for future medical expenses, which are paid as they are incurred. The Act also limits an individual health care provider's (or more accurately his or her insurance company) personal liability to $200,000.

Insurance companies argue that tort reform in general and caps on damages in particular are necessary to reduce healthcare costs, lower insurance premiums for medical professionals, and promote improvement in care so that doctors are not engaging in "defensive medicine." Countless studies show that this is not the case. On the contrary, healthcare costs are rising, healthcare insurance premiums are higher, and there is little progress in preventing medical mistakes and malpractice. This is all in spite, or maybe because of, caps on damages.

There is ample evidence to support the proposition that medical malpractice caps have little to no impact on healthcare costs. A 2010 Robert Wood Johnson Study revealed that medical malpractice insurance premiums account for less than 2% of all healthcare costs. According to the same study, there would be very little impact on healthcare costs even if the most stringent tort reform measures were put in place. The 2011 report by Public Citizen, "A Failed Experiment," which studied the effect of Texas' $250,000 cap on non-economic damages, revealed that since the cap has been law, Medicare costs have risen faster in Texas than in the rest of the country and health insurance premiums have risen above the national average.

Similarly, damage caps have not lowered insurance premiums for medical professionals. A National Center for Policy Analysis study was unable to find a correlation between damage caps and malpractice insurance premiums. Other studies have found that premiums rise in response to a broad range of economic factors, not the amount of malpractice payments. Yet others have shown that insurance premiums rise at a higher rate in states with caps than in states without caps. What all of this research shows is that if anything, caps have a negative effect on the cost of insurance premiums for malpractice coverage.

What may be even more frightening is that caps on damages may eliminate the incentive to improve health care in general. There are several studies of hospitals and healthcare centers that have instituted successful prevention programs after being forced to pay out a large malpractice suit. The possibility of an expensive medical malpractice suit has incentivized providers to invest in programs that eliminate errors. Without this incentive, medical providers will have fewer reasons to seek to improve quality and avoid mistakes, resulting in an increased number of deaths and injuries that could have been avoided. As it stands now, it is estimated that up to 98,000 patients each year die as a result of medical malpractice.

As states continue to enact caps on medical malpractice damages, the returns are meager. Contrary to what tort reformers promise, healthcare is getting costlier and less safe for the average person. The only real winners in all of this are the insurance companies.

Related Reading:

• Emergency Room & Emergency Responder Immunity: Safe Haven for Negligence and Incompetence?


• Medical Malpractice Reform Harms Patients and the Taxpaying Public


• The Myth of the Frivolous Medical Malpractice Lawsuit




Collins & Collins, P.C.
Albuquerque Attorneys

It has long been a practice of the pharmaceutical industry pay doctors for a variety of purported purposes such as consulting research and speaking. As often as not, these payments are intended to and do effectively influence the doctors in the prescription of the drug companies' products.

There are many doctors that make significant income off these arrangements. It is not unheard of for the doctor to make more from the drug companies than from his or her medical practice. The potential for conflicts of interests hardly needs stating.

A new law when passed will require pharmaceutical companies to disclose all payments to doctors. This will include research money, speaking engagements, travel, meals and even according to the New York Times, bagels and coffee brought for the doctor's office staff on visits from the pharmaceutical sales representative.

Research has shown that these pharmaceutical practices, until now somewhat in the dark, do in fact influence doctors' prescription habits. Among the more troubling findings is that doctors often will prescribe the medicines off label for unapproved purposes despite obvious dangers of such off label prescription practices.

It is hoped that the new law and disclosure requirements will increase the chances that doctors are making drug prescription decisions based entirely on the well-being of their patients. In addition to the light that these financial disclosures will shed on current and future practices, they may also reveal possible issues related to past practices of both drug companies and doctors.

There has been significant evidence that these payments influence treatment decisions. Of particular interest will be the financial incentives given to doctors for the prescription of known dangerous drugs such as Actos which has been shown to cause bladder cancer. It will also be interesting to understand doctors' incentives in prescribing drugs off label.

The New York Times found that the doctors that benefit from these pharmaceutical payoffs practice medicine differently from their counterparts who do not. These doctors are more willing to prescribe risky drugs and to prescribe drugs for unapproved uses. Sometimes they do both according to the Times when for example they prescribe powerful antipsychotic drugs to children.

This all sounds good so far. The penalties range from $10,000 to $100,000 per violation. However, the maximum fine is only $1 million per year. When speaking of pharmaceutical companies that bring in billions upon billions of revenue each year, this is a pittance and a small cost of doing business.

Due to the relatively low fines for violations, these practices will likely continue unabated at least from the pharmaceutical industry side of the equation. What is far more interesting and far more likely to effect change is the potential light this will shed on individual doctors and medical providers which may lead to medical malpractice claims. In fact, isn't the discussion that we should be having about a doctor's duty to disclose conflicts of interest that might be detrimental to the health of his or her patients?

Collins & Collins, P.C.
Albuquerque Attorneys

Many personal injury victims are surprised and/or shocked to learn that there are many different lien holders that are going to get a piece of their settlement. On occasion, these liens may prevent a case from settling. On other occasions, the liens and the difficulty settling these liens may deter many attorneys from taking smaller claims at all.

Depending on the nature of the medical care and medical insurance coverage, there could be all manners of medical liens on any recovery, settlement or verdict. The first and easiest to address is private medical insurance. This is often the one that upsets injured parties the most feeling that they should not have to repay medical costs covered by significant insurance premiums often paid for years prior to a claim. As much as it may pain the insured to repay his insurance company, it must be done.

Work related injuries typically will carry workers compensation insurance liens. A work related personal injury claim presumes a third party other than the employer caused the accident and resulting injuries and damages. The workers compensation insurance provider will want to and has every right to recover medical costs necessitated by the third party's negligence.

Private insurance and workers compensation insurance are relatively easy to address. The more difficult liens are those asserted by governmental programs such as Medicare, Medicaid, Indian Health and the Veterans Administration. The end result is often the same with liens being negotiated down on a number of different grounds. However, getting there can be a long, tedious and frustrating process for both the client and the attorney.

Like private medical insurance and workers compensation insurance, the medical costs associated with the accident must be identified. This is typically fairly straightforward, though time-consuming with private insurance and workers compensation insurance. It is a matter of collecting all the medical records and bills associated with the medical care associated with the accident. On occasion, there can be some complications determining what bills and records are associated with the accident and what is related to other treatment and/or prior medical conditions. One advantage of workers compensation insurance is that they generally have done this already as they monitor medical care pretty closely on work related injuries.

On the other hand, in accidents involving coverage under Medicare, Medicaid, Indian Health and the VA, obtaining the medical records and bills can seem like an impossible task. It can take months upon months to obtain the records. And obtaining the records is just the first step. The records and bills must then be closely reviewed to sort out what is and what is not related to the accident. Rest assured, the original records, bills and associated liens will include far more than is actually related to the accident.

Then comes the fun part which is trying to get somebody on the phone at one of these entities with authority to negotiate the bills and liens. This again can be challenging to put it lightly. Again, weeks and months can pass before getting the right person on the phone if you do not know who it is you need to contact. And even when you do, these folks are somewhat overwhelmed and it can be hard getting their attention. It can be equally hard keeping it.

As difficult as the government sometimes makes it to address these liens, they must be addressed. They must be addressed before final settlement. Failure to address these liens before final settlement can have disastrous financial consequences for the client, and the lawyer. The lien settlement process in fact can take as long or longer than the injury settlement process. In fact, the inability to settle these liens in a timely manner may force the filing of an otherwise unnecessary lawsuit to avoid the lapse of the statute of limitations.

If you have a claim with these types of issues involved, it is highly advisable to seek the guidance of an experience personal injury attorney. However, you should also know that these issues make the case much more difficult and time-consuming to resolve. The reality is that many attorneys will shy away from these claims unless there is a significant potential for recovery.

Collins & Collins, P.C.
Albuquerque Attorneys

Medical malpractice reform is all the rage in politics these days. President Obama even seems to have jumped on the bandwagon. Many states are lining up to pass their own versions of medical malpractice caps under the guise of protecting doctors and patients.

The reality is that medical malpractice lawsuits have been on the decline for many years. In addition, those that are taken to trial have a very low success rate. There simply is no problem with runaway medical malpractice jury verdicts in the U.S. The threat of frivolous medical malpractice lawsuits is pure myth.

On the other hand, there is a very real problem with medical malpractice. It is estimated that up to 98,000 patients die each year from medical malpractice. That is almost twice the number of U.S. soldier deaths during the Vietnam War. There are countless others who survive medical malpractice with horrible and permanent injuries.

One such instance was reported by the Texas Tribune where Emergency Room physicians and staff failed to treat a woman for her very well documented and extremely serious vascular clotting problem. The woman was sent home with a diagnosis of bilateral leg pain. Due to the failure to treat the formerly diagnosed problems, the woman lost both her legs.

In addition to very low caps on medical malpractice claims, Texas has seen fit to give immunity against medical malpractice claims to Emergency Room doctors except in cases of "willful and wanton" behavior. In other words, a patient must basically prove intentional conduct. This is an impossible standard making it near impossible now for patients to recover for what amounts to gross negligence on the part of emergency room doctors.

The potential problem is made most evident in a horribly tragic case reported last week by Fox 40 in Sacramento. In that case, the parents of a two year old girl took her to a Sacramento Emergency Room for treatment for a persistent fever, skin discoloration and weakness. The parents waited 5 hours in the Emergency Room begging and pleading with doctors to see their little girl as her condition deteriorated before their eyes. Their pleas were ignored. As a result, streptococcus A bacteria ravaged her body necessitating the amputation of both feet, her left hand and part of her right hand. Streptococcus A is both common and easily treatable. This tragedy could have been avoided with even slight attention to the little girl or her parents.

Anyone who has ever been to an Emergency Room will understand the implications of providing immunity to Emergency Room doctors. There is the common cry that medical malpractice causes doctors to undertake unnecessary and expensive testing to protect against lawsuits. Both these cases illustrate the opposite. In each case, a little routine testing and attention would have saved these patients from amputations. Now states, Texas in particular, are moving toward a model where there is no pressure at all on doctors to behave professionally and competently leaving all of us at risk each time we seek medical attention.

Voters should keep this reality in mind as cynical and opportunistic politicians seek to gain advantage by touting medical malpractice reform. Keep in mind the two year old girl who now faces a life as a quadruple amputee. Perhaps this is not enough so consider yourself or your family in need of urgent medical services at the ER and whether you believe it is prudent to have a system where doctors and hospitals are not held accountable for their actions.

Then ask yourself who the caps and immunity are meant to serve? It is certainly not the taxpaying public who will ultimately bear the costs of caring for those injured by medical malpractice through Medicare, Medicaid, Social Security Disability and other programs while those truly responsible get a pass.

Collins & Collins, P.C.
Albuquerque Attorneys

The Eleventh Circuit Court of Appeals has shed some light on a growing and extremely confusing topic, Medicare lien reimbursement in personal injury actions.

The underlying cause of action in Bradley v. Sebelius was a wrongful death action initiated as a result of nursing home negligence. The estate for the deceased was able to settle the claims with the nursing home at insurance policy limits of $52,500. As is often the case with underinsured tortfeasors, the $52,500 policy limits were grossly inadequate to cover the damages associated with the wrongful death.

This did not stop Medicare from asserting a lien for the $38,875.08 in medical benefits paid by Medicare prior to death. Medicare refused to negotiate the lien forcing the estate to take the matter to probate court for an allocation of the settlement funds. Medicare then refused to participate in the probate proceedings standing by its $38,875.08 lien. Based upon principles of equity, the probate court allocated only $787.50 for recovery of medical expense. The amount reflected a pro rata reduction in the lien in proportion to the insurance policy limits to the full value of the wrongful death losses.

Naturally, despite refusing to participate in the proceedings, Medicare refused to accept the allocation insisting on full recovery. Medicare appealed to federal district court obtaining a favorable decision. The Eleventh Circuit Court of Appeals reversed holding Medicare to the probate court decision.

The Court addressed a number of issues. First, the Court addressed the fact that the wrongful death cause of action belonged to the estate, not the deceased. The Court suggested that the surviving children had independent claims for loss of consortium and companionship beyond the claims of the deceased. In essence, the Court suggested that these losses alone exceeded the insurance policy limits leaving nothing for Medicare to attach.

Perhaps more importantly, the Court addressed a growing problem presented by Medicare's approach to lien recovery. Medicare basically refused to participate in the process refusing to negotiate its lien and forcing the estate to probate. It further refused to participate in the probate proceeding. All the while, Medicare stood firm on its lien despite the fact that the total available policy limits and the settlement theron were grossly insufficient to compensate all parties to the claims. Medicare did this through interpretations of its policy manuals.

The Court would not stand for these tactics. First, the court stated that agency policy statements, manuals, and enforcement guidelines are not entitled to the force of law. Next, the Court addressed the obvious breach of public policy in allowing Medicare's tactics. The Court pointed out that the attorney for the estate acted in a sensible and cost effective manner settling the claims at policy limits. The Court recognized Medicare's position would either force cases into litigation or allow tortfeasors such as the negligent nursing home to completely escape liability. In essence, the Court recognized that most attorneys and plaintiffs would be better served simply walking away completely in low policy limit cases where Medicare was involved. The Court put it succinctly stating "Forcing counsel to file a lawsuit would incur additional costs, further diminishing the already paltry sum available for settlement. This flies in the face of judicial and public policy."

This case provides some relief for attorneys and injured persons. It should force Medicare to at least respond to attorneys and plaintiffs in lien negotiation. The consensus to present has been that Medicare simply refuses to participate all the while leaving the possibility of outstanding liens and enormous penalties hanging over both the injured person and the attorney.

Collins & Collins, P.C.
Albuquerque Attorneys

When facing the uncertainties of a personal injury accident, it is important to know that your personal health information is protected by federal law. As a result, your medical care providers and insurers are required to safeguard your personal health information. Thus, anyone requesting your personal medical information must comply with both the Privacy Rule and the Security Rule found in the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

The HIPAA was created to increase the efficiencies of the health care system, by creating national standards which protect "individually identifiable health information". This information includes your current and/or prior medical history, as well as anything that would specifically identify you, such as a social security number or birth date.

Within HIPAA is the Privacy Rule, which gives you rights over your personal health information in any form, whether verbal, written or electronic. Protected information includes the written information that is in your physical medical chart, as well as electronic data kept on your health care provider's computer system. Protected information also includes conversations you've had with these providers and your personal financial information used for billing purposes. It even includes information about you kept by health insurance companies, including Medicare and Medicaid.

The Privacy Rule provides a method for disclosing this protected information to others, but does set limitations. In the case of a personal injury claim, there may be insurance companies, governmental agencies, law firms, medical experts and others enlisted to defend against your claims. Your health care providers can only release your personal medical information to these entities after receiving your signed authorization, which specifies to whom the information will be sent along with the scope and date ranges for the medical records to be released.

Your personal medical information can be released by court order, but the information requested must be specifically identified, and only this information will be released. Subpoenas for your personal medical information are not the same as a court order unless issued by and upon the order of the Court. Subpoenas are typically issued directly by lawyers, who must comply with the Privacy Rule as well. They must either notify you of the request, so that you have an opportunity to object, or they must seek a "qualified protective order" through the court. A subpoena alone without the order of the court is not sufficient for the defense to obtain your medical records.

Though HIPAA laws will protect against unauthorized release of medical information to the defense, the discovery rules are fairly liberal. The defense will typically be able to obtain almost all medical records for seven to ten years prior to any accident or injury claimed in a personal injury lawsuit. Any records beyond that may be protected. And HIPAA will most definitely prevent the release of records without proper legal releases or court orders.

Related Reading:
Discovery in a Personal Injury Lawsuit: Often Difficult and Expensive but Always Necessary!
The High Costs of Medical Errors on the Healthcare System
Insurance Company Medical Records Review in Personal Injury Cases

Collins & Collins, P.C.
Albuquerque Attorneys

Calculation of the Medicare set-aside in a personal injury action can be a long and tedious process. The law allows for a reasonable allocation for future medical expenses. Defining "reasonable" is anything but easy.

The set-aside calculation takes into consideration the patient's current condition, past medical treatment, future medical needs, life expectancy along with numerous other factors. Medicare may judge "reasonable" future medicals at a far higher amount than is suggested by the facts. An excessive set-aside coupled with the lien on past paid Medicare benefits may render a settlement or judgment worthless to the injured person as the fight for recovery is purely for the benefit of Medicare. This is particularly true in cases with catastrophic injuries and uninsured/underinsured or judgment proof defendants. There simply is not enough money to go around.

Worse still, the review and approval process can take months upon months to conclude. All the while, the statute of limitations is ticking along. The lengthy time necessary to conclude the review and approval can push a case that would otherwise settle into litigation. This of course places even greater costs on the injured person. Even then, Medicare holds the cards and they do not have to budge on their numbers. At some point, a rational plaintiff must decide whether litigation to pay Medicare and attorney fees is really worth the time and stress.

The bottom line is that the process with Medicare must begin early. Time is not really on your side in these cases. On the one hand there is Medicare and on the other the statute of limitations. The statute of limitations has a way of sneaking up on plaintiffs and many lawyers will not, and those that do should not, touch a case with these kinds of issues and short fuse on the statute of limitations.

Related Reading:
Eleventh Circuit Addresses Medicare's Responsbilities in Lien Negotiation
Medicare/Medicaid Lien Reduction for Attorney Fees
Pitfalls and Ironies of Medicare Liens in Personal Injury Actions

Collins & Collins, P.C.
Albuquerque Attorneys

The 10th Circuit recently addressed the reduction of state Medicaid liens against personal injury settlements in Price v. Wolford. The case involved a medical malpractice action brought on behalf of child that suffered severe brain injuries during delivery. The case settled for $1.1. million for the birth related injuries. The Oklahoma Health Care Authority (OHCA) asserted a Medicaid lien of $544,282.26 against the settlement. The district court reduced the Medicaid lien to $67,666.67 in proportion to value of the settlement in relation to the total value of the claim as well as for non-medical related damages.

Essentially the district court relied upon the plaintiff's valuation of the child's future medical costs at $12 million. The reduction also relied of Arkansas Dept. of Health and Human Services v. Ahlborn where the Supreme Court asserted that Medicaid may recover only against that portion of the settlement reflecting recovery of medical expenses. Compensation for other damages such as lost income, pain and suffering, loss of enjoyment of life and so on are beyond the reach of the lien. Due to the recovery of only a portion of the claimed medical expenses as well as the existence of significant non-medical damages, the district court substantially reduced the OCHA lien.

OHCA appealed on several grounds. The 10th Circuit denied their appeals on all but one issue which was whether the plaintiff had provided sufficient evidence of the value of the claim to justify the lien reduction over the objections of OHCA. The 10th Circuit found that insufficient evidence had been presented to justify the valuation. Thus the case was sent back to district court for the purpose of valuating the child's claim.

Notably, OHCA was present at the settlement conference where the claims were settled. It is not clear why the Medicaid lien was not addressed at that time. Due to the difficulties of dealing with Medicaid and Medicare, and the harsh consequences of failure to properly negotiate liens in advance of settlement, it is equally unclear why these issues were not addressed prior to the settlement conference.

In light of the fact that OHCA was present at the settlement conference, there may have been a dispute as to the value of the lien at that time. Perhaps, OHCA was taking an unreasonable position on its lien refusing the legally mandated reduction under Alhborn and federal statute. In any event, failure to reach an agreement on the lien at settlement laid the foundation for OHCA's later unreasonable intervention and demand for the full value of its lien.

This case points out the importance of negotiated lien reduction in advance of any settlement. Unfortunately, these liens may dictate the settlement options. In the event that Medicaid takes a unreasonable position as OHCA has done in this case, settlement may not be possible without the intervention of the court. This intervention should be sought in advance of settlement to avoid the unfortunate outcome here.

Related Reading:
Medicare/Medicaid Lien Reduction for Attorney Fees
Calculating the Medicare Set-Aside: Start Early!
Beware Medicare & Medicaid Liens in Personal Injury Lawsuits

Collins & Collins, P.C.
Albuquerque Attorneys

Personal injury cases often involve Medicare provided medical benefits. Medicare will claim liens against any personal injury settlement for both past and future medical expenses. Past medical benefits are hard enough to address due to the difficulty of working with Medicare on the settlement of its liens. Future medical is even more difficult due to the uncertainty of those Medicare benefits.

Prior to the settlement of any personal injury claim, it is critical that all Medicare liens be addressed. This includes liens to cover future benefits. Coverage of future Medicare benefits is addressed through Medicare Set-Asides. A Medicare Set-Aside essentially requires that a portion of the settlement or verdict be set aside to cover future medical benefits related to the injuries suffered in the accident. Medicare cannot claim liens against the settlement for unrelated medical benefits.

Failure to set aside funds for future Medicare benefits can be financially devastating. Medicare will take the position that no future Medicare benefits will be provided until the entire settlement amount has been exhausted. In addition, it becomes more difficult to dispute what is and is not related to the accident. Therefore it is important to address the set aside prior to settlement. Negotiation of the set aside up front can result in substantial reductions in the amount required to be set aside.

Basically, the negotiated set aside will fix an amount that must be expended by the injured person prior to Medicare picking up any additional medical expenses. Once that amount has been expended, then Medicare benefits will resume. Again, in the event that the set aside is not negotiated in advance of settlement, Medicare may take the position that the entire settlement amount must be expended prior to the resumption of Medicare benefits.

Due to the extreme position that Medicare may take in the event of failure to negotiate the set aside in advance of settlement, it is important to begin this process well before an anticipated settlement or trial. Unfortunately, this is easier said than done due to the difficulty of working with Medicare. It is a slow and tedious process but essential to protect the funds of a personal injury settlement or judgment.

Related Reading:
Medicare Set-Aside Liens to Cover Future Personal Injury Related Medical Expenses
Calculating the Medicare Set-Aside: Start Early!
Medicare/Medicaid Lien Reduction for Attorney Fees

Collins & Collins, P.C.
Albuquerque Attorneys

New Mexico has a high rate of uninsured. The state has the highest rate of uninsured motorists in the nation. The numbers related to those lacking health insurance are comparable. As a result, many personal injury cases in New Mexico involve Medicare and/or Medicaid.

Many who have suffered personal injuries from the negligence of another are very surprised to hear that Medicare/Medicaid will claim liens against any personal injury settlement funds. Medicare/Medicaid will assert a lien for the amount of medical bills related to the personal injuries. Both Medicare and Medicaid are very aggressive about collecting on those liens. The penalties are quite severe for failure to properly account for and pay these liens.

It should be kept in mind that Medicare/Medicaid may assert liens only for medical bills related to the personal injuries related to the settlement. This includes both past and future medical expenses. However, it includes only medical expenses and only those related to the personal injuries on that particular claim. Because the liens may only include medical expenses related to the personal injuries on that claim, Medicare and Medicaid liens are often overstated.

There are a number of areas where the lien might be overstated and subject to reduction. The area addressed here are attorney fees related to the personal injury claim. Medicare/Medicaid will reduce their liens by the amount of attorney fees. For instance, if attorney fees are 1/3 of the recovery, the liens will be reduced by 1/3 as well. However, like most issues surrounding Medicare and Medicaid, it is important to negotiate these reductions prior to settlement. Both Medicare and Medicaid laws dictate that they be notified prior to any settlement. They are both quite reasonable when approached prior to settlement. The process of lien reduction negotiations is significantly more difficult when initiated subsequent to settlement. This includes the reduction for attorney fees.

If Medicare and/or Medicaid are properly addressed from the beginning of the personal injury action, the reduction of the lien for attorneys fees is automatic. Failure to properly address the liens in advance of settlement can make even the legally mandated reduction of the liens for attorney fees very difficult. In addition, the settlement proceeds cannot be distributed until Medicare and/or Medicaid have been properly addressed. Distribution of the settlement proceeds prior to addressing the liens can be disastrous both for the injured client and the attorney. In the event the case has settled prior to working out the Medicare/Medicaid liens, this can be a long and difficult process. All the while, the clients funds must be held in trust and cannot be released.

Those who have suffered personal injuries must understand the importance of addressing Medicare/Medicaid liens. As stated, many are surprised and even angry that Medicare/Medicaid has asserted liens against their recovery. Many will go further forbidding their attorneys to pay the liens. Of course, this is simply not a possibility and any lawyer heeding those directions would get both the client and the lawyer in a serious financial bind. And in the end, Medicare/Medicaid will recover on their liens. The only question is whether or not the liens have been properly reduced or collected in full due to the failure to properly account for them in advance of settlement.

Related Reading:
Calculating the Medicare Set-Aside: Start Early!
Reduction of Medicare/Medicaid Liens on Personal Injury Funds for Unrelated Medical Expenses
Pitfalls and Ironies of Medicare Liens in Personal Injury Actions

Collins & Collins, P.C.
Albuquerque Attorneys

It is fairly common that those that have been injured in accidents, particularly auto accidents and slip and fall accidents, are receiving Medicare benefits at the time of the accident, or as a result of the accident. What many do not realize is that Medicare has a lien against any personal injury recovery for damages awards or settlements received as a result of the injuries.

It is difficult at times to explain to injured persons the law or the logic behind the liens. In a nutshell, Medicare has the right to recover all Medicare benefits expended to treat the person's injuries. In addition, Medicare can insist on a set aside of personal injury funds for future treatment of those injuries. These liens can be very large in cases of serious personal injuries. On occasion, the size of these liens can render the personal injury recovery process, particularly in complex litigation, futile and a waste of the injured party's time and energy. After all, litigation is extremely stressful and costly. In these cases, the injured person must decide whether he or she wants to work that hard simply to repay Medicare.

The decision to move forward with the personal injury recovery process, and perhaps litigation, is made even more difficult by the fact that recovery itself, and the failure to properly address Medicare liens can result in significant liability, penalties and even forfeiture of future Medicare rights.

Here are the basic ground rules:

• Medicare must be reimbursed within 60 days of the settlement or judgment. This means that the issues must be addressed well in advance of final settlement or judgment to avoid inadvertent violation of the law.
• The defendant, generally the other party's insurance company, must report a possible recovery to Medicare. The defendant is liable to Medicare if the injured party fails to properly address Medicare liens. Consequently, many defendants will make Medicare one of the payees.
• The injured party's attorney is responsible for the full amount of the lien in the event that the injured party does not pay. This means that your attorney will not distribute any funds, yours or theirs, before addressing Medicare.
• The penalties for failure to properly account for Medicare liens are severe. The defendant can be fined $1000 day for failure to notify Medicare of the possible recovery. The injured party and both attorneys, may be all held individually liable for up to double the full amount of Medicare lien.

This all sounds pretty bad. And it gets worse. Medicare is completely non-responsive to attorneys on either side in their attempt to determine the amount of the liens. It can take months to get any response at all from Medicare. The process of negotiating the liens takes even longer. This makes these cases particularly stressful and time-consuming for injured persons. Often, the only thing holding up settlement is the Medicare lien. There are times when the Medicare lien will prevent a settlement. Worse yet, in many of these cases, costly litigation is simply not warranted. The end result is that in some cases the injured party gets nothing, Medicare gets nothing, and the defendant who caused the harm completely escapes accountability. That's Medicare protecting your tax dollars.

Related Reading:
Beware Medicare & Medicaid Liens in Personal Injury Lawsuits
Reduction of Medicare/Medicaid Liens on Personal Injury Funds for Unrelated Medical Expenses
Calculating the Medicare Set-Aside: Start Early!

Collins & Collins, P.C.
Albuquerque Attorneys

There was a recent New Jersey jury verdict of $18.5 million for a birth injury. The medical malpractice award was reported in The Star Ledger. Essentially, the jury issued the verdict after finding that a delay in a c-section delivery resulted in the child's cerebral palsy.

It is not uncommon to see very large verdicts in birth injury cases. The damages in these cases are significant. The child and the family could face a lifetime of medical expenses, assisted living, rehabilitation and so on. This is not cheap. In addition, the child will one day become an adult with absolutely no possibility of earning income. A lifetime of lost earnings will typically make up a big part of the damages award. Then of course there are damages for pain and suffering. Despite what many believe, these are often a small percentage of the overall award.

Again, the verdict itself is not that surprising in light of the damages. In reading the comments on the article, I was struck by the success of the tort reform movement in programming the public's response. In fact, most jurors come to the jury box with these same prejudices including a strong bias toward protecting the medical profession.

One comment suggested that "Life is never fair. Nothing guarantees a perfect life or entrance into it." Another suggested that these awards are the reason for high health insurance costs. Another suggested that patients buy their own insurance to protect against medical malpractice. Even the one that agreed with the verdict expressed horror that the attorney would be paid a percentage of the recovery.

Yes, life is not fair. But life should not be made dangerous by the acts of others, especially those entrusted with your care. And those that do cause harm should bear responsibility for their actions. Lawsuits are not the reason insurance is so high, insurance companies are the reason insurance is so high. The medical malpractice crisis is a myth. Medical malpractice claims have dropped dramatically over the last 10 years. A study by the Institute of Medicine, a part of the National Academy of Sciences, estimates that up to 98,000 people die each year as a result of medical negligence. The fact is far fewer lawsuits are brought than realistically should be to protect the public against these risks.

Numerous health insurance companies made record or near record profits in 2009. At the same time, many are raising premiums across the board. Think about that. They made record profits during the worst recession since the Great Depression and yet they are still raising rates. Is it really lawsuits that are driving insurance costs? Could it not be corporate greed?

And what about those greedy lawyers? Look again at the actual numbers on medical malpractice claims. There are very few medical malpractice lawsuits being filed just in relation to wrongful deaths associated with medical negligence. This does not even begin to address medical negligence that results in non-fatal injuries and illness, often permanent, caused by medical negligence. The fact is these are extremely hard cases for attorneys. They are extremely expensive to litigate. This is true even in clear cases of negligence where it is often the policy of insurance companies to deny every claim. In addition, these cases are lost at trial more often than they are won due to the benefit of the doubt given doctors. Attorneys that take these cases take on enormous risks. Without the fee in the end, nobody would take these cases. And injured patients and society would be forced to bear the costs of these errors.

To some, as indicated by the comments to the report of the verdict, it is far better for society to allow insurance companies to charge outrageous premiums to protect against a fictitious wave of medical malpractice lawsuits while having the patient bear all the risks. It is far better still that society and taxpayers should bear the costs of a lifetime of care for injured patients through Medicaid, Medicare and Social Security than for insurance companies to cover the losses for which they are paid to cover. The insurance companies after all are the true victims here. We should protect their margins.

Related Reading:
Caps on Medical Malpractice Damages Do Not Lower Insurance Premiums or Healthcare Costs
Are Guns Safer than Hospitals?
Hot Coffee and the Medical Malpractice Myth

Collins & Collins, P.C.
Albuquerque Attorneys

Medicaid liens can cause significant financial complications following settlement of a personal injury lawsuit. There are significant penalties for failure to properly account for those liens out of settlement funds. It is important that the Medicaid liens be addressed and satisfied with both New Mexico Human Services Department (HSD) and Center for Medicare and Medicaid Services (CMS) prior to distribution of personal injury settlement funds. It is equally important to the injured person that Medicaid not be overcompensated for their liens.

Medicaid through HSD and CMS is quite serious about collecting on its liens. In fact, Medicaid will on occasion assert liens beyond what it is legally mandated. This overstatement of its lien is typically the result of some confusion in the law regarding Medicaid reimbursement. This confusion over the Medicaid's rights to reimbursement can be quite costly if not addressed properly.

In most cases, Medicaid is very reasonable in addressing liens so long as the liens are addressed in a timely manner prior to settlement of personal injury claims. However, as a result of misinterpretations of the law, HSD in particular has been known to demand full recovery of all medical expenses advanced by Medicaid. In fact, Medicaid is not necessarily entitled to the full reimbursement of all Medicaid advanced medical expenses. This is particularly true in cases involving serious personal injuries.

Medicaid is entitled only to the recovery of liens associated with medical expenses. In a personal injury lawsuit, particularly in cases with serious injuries, the settlement or award typically includes a wide range of damages including lost wages, loss of consortium,loss of household services, permanent injury and disfigurement, pain and suffering and punitive damages. These are entirely distinct from the damages awarded for medical expenses.

Medicaid is not allowed to recover for any non-medical related damages. The reason for this is simple. As set forth in the 2006 United States Supreme Court case of Arkansas Department of Health and Human Services v. Ahlhorn, Medicaid may not "share in damages for which it has provided no compensation..." Medicaid provides no relief or support for damages other than medical expenses and therefore will not reap the benefit of any award for these other non-medical related damages.

It is not uncommon that the settlement or award does not specifically break down the allocation between medical damages and other non-medical damages. In case of a dispute over the breakdown, the parties can call on the court for a determination of the allocation between medical and non-medical damages. The Court will then apportion the damages between medical and non-medical damages based upon the injuries in the case. Medicaid will then reimbursed based upon the Court's apportionment of damages.

Medicaid issues are very complicated and it is important to seek the advice of an attorney prior to accepting any settlement. All liens, including Medicaid liens, should be negotiated prior to final settlement. Failure to negotiate liens in advance may have severe financial consequences for the injured person. This is particularly so in case of Medicaid liens for which failure to pay may result in significant fines and penalties.

Related Reading:
10th Circuit Addresses Medicaid Lien Reduction in Personal Injury Settlements
Reduction of Medicare/Medicaid Liens on Personal Injury Funds for Unrelated Medical Expenses
Beware Medicare & Medicaid Liens in Personal Injury Lawsuits

Collins & Collins, P.C.
Albuquerque Attorneys

In personal injury cases in New Mexico, the injured person has often received medical care through Medicare or Medicaid (hereinafter referred to collectively as Medicare). Medicare by law has a lien against any settlement for the full amount of the Medicare benefits. This lien is prior to all other obligations or other distributions verdict or settlement funds. Failure to properly address these liens can have serious financial consequences.

Medicare liens are enforced through the Centers for Medicare and Medicaid Services (CMS). Often times, CMS will contact you or your attorney to put you both on notice of the liens. However, even if neither you nor attorney has received notice, you are both responsible for those liens. Therefore, if you have received any Medicare related medical treatment for your injuries, you should alert your attorney at the very first meeting.

Proper handling of these liens requires early attention to the liens. Medicare must be notified immediately of any possible claims or lawsuits associated with the Medicare related treatment. It is not the responsibility of Medicare to notify the parties. Medicare must also be kept informed of any settlement negotiations. Medicare technically has the authority to block a settlement if the settlement does not reasonably address its liens. Finally once the claims are resolved either through settlement or litigation, the lien must be resolved. In fact, Medicare is has first priority over any distribution of any funds.

There are significant potential penalties for failure properly account for Medicare liens. The rules are very strict. The Medicare lien must be paid within 60 days of the final notice of lien. Failure to do so can result in severe penalties including double damages and interest on delinquent liens. Thus, it is important to keep Medicare involved in the settlement or litigation process. This means negotiating the liens with Medicare prior to final settlement or immediately following a verdict.

The good news is that Medicare is very reasonable in the negotiation and resolution of its liens. Often, the final resolution will reflect inadequate insurance policy limits to cover the client's injuries and damages. In addition, Medicare often has overstated liens reflecting Medicare benefits unrelated to the personal injury claim. Medicare will routinely reduce its liens for an overstatement of benefits once it is brought to their attention. Once you have negotiated the lien, you will be able to move forward with the distribution of verdict or settlement funds with peace of mind.

Related Reading:
Medicare Set-Aside Liens to Cover Future Personal Injury Related Medical Expenses
Medical Liens Can be Half the Battle in a New Mexico Personal Injury Case
Pitfalls and Ironies of Medicare Liens in Personal Injury Actions

Collins & Collins, P.C.
Attorneys at Law