Mon, 13 May 2024 16:42:49 -0700WeeblyThu, 03 Sep 2015 15:35:09 GMThttp://lienresource.com/news-and-info/supreme-court-to-hear-11th-circuit-erisa-caseWhether an ERISA healthcare plan can enforce its lien against the general assets of a beneficiary is a question the United States Supreme Court is scheduled to hear in October. The court may also provide clarity over the role a Summary Plan Description (SPD) plays in establishing the rights of healthcare plans to establish and enforce their liens.

The case, Board of Trustees of the National Elevator Industry Health Benefit Plan v. Robert Montanile, was decided by the 11th Circuit Court of Appeals in November 2014. The 11th Circuit Court held in favor of the Plaintiff health benefit plan, holding that the assets were subject to an “equitable lien by agreement” and they were “specifically identifiable funds.” The Defendant, Montanile, appealed to the highest court and the case was granted cert in March 2015. The case is scheduled for the October term of the Supreme Court.  

There are two significant questions the Court is expected to rule upon stemming from this case. First, is whether an “equitable lien by agreement,” which lies in equity, allows a healthcare plan to recover out of the personal assets o the beneficiary if the funds have already been disbursed and spent. Montanile argues that is a legal remedy only available in law because it is essentially seeking money damages. The 11th Circuit held that because the funds were once identifiable, because they were once held in the trust account of Montanile’s attorney. Therefore the Court held the funds were still traceable to Montanile’s personal assets because Montanile eventually held, or spent, the same funds.

The other issue the Court may address is whether the “Summary Plan Description” (SPD) alone can grant a plan the right to assert a lien when those rights are not stated in any other plan documents. The 11th Circuit held that the Summary Plan Description could establish an enforceable lien even if all other plan documents were silent on the plan’s rights to reimbursement. Montanile argues this conflicts with a previous Supreme Court holding in Cigna Corp. v. Amara, 131 S.Ct. 1866 (2011). In Amara, the majority’s opinion stated in a footnote that the SPD did not create the rights of the plan, but merely summarized and explained those rights to the beneficiary. Several Courts, including the 11th Circuit, have held since Amara that the SPD is a plan document that can stand alone to create rights of the plan.

This case could have major implications for the rights of plans. Very often when reviewing plan documents, we see that the plan’s rights are stated only in the SPD. Just as often, we’re told that no other plan documents exist, and the SPD is the only relevant plan document. If the Supreme Court holds that SPD’s alone cannot establish these rights, this could provide a clear defense to reimbursement for plaintiff’s whose healthcare plans only consist of an SPD.

]]>Fri, 14 Aug 2015 19:56:45 GMThttp://lienresource.com/news-and-info/big-savings-obtained-for-florida-victimAttorneys at The Lien Resource were able to save a Florida accident victim more than $75,000.00 by reducing his obligation to reimburse a healthcare plan in July. The reduction cut the victim's obligation to pay the plan by more than half. 
The case involved a Florida victim who suffered significant head injuries following a 2014 auto accident that affected his cognitive function and severely limited his quality of life. The plaintiff was represented by Spohrer & Dodd, a Jacksonville plaintiffs firm that filed a liability claim on his behalf which ultimately resulting in a significant recovery. However, the healthcare plan in this case claimed more than $150,000.00, of their client's recovery proceeds were owed to the plan to reimburse medical benefit payments . Following weeks of negotiations with the benefit provider, and citing state law defenses protecting Florida plaintiffs from reimbursement, lawyers for the Lien Resource were able to cut the victims obligation to pay the plan in half. 
]]>Fri, 12 Dec 2014 22:02:14 GMThttp://lienresource.com/news-and-info/the-elusive-plan-administratorTo evaluate the respective rights of your client and their healthcare plan in terms of subrogation and reimbursement it is critical to obtain a variety of documents from the "plan administrator."  

However, determining just who the plan administrator actually is, and then reaching the administrator and hopefully receiving answers to your requests, are often the first challenges to determining each party's rights.

An article by South Dakota School of Law Professor Roger M. Baron, lays out the importance of making a proper request for these documents, and the pitfalls of seeking the equivalent information from anyone other than the "plan administrator."  The article was published in several trial magazines, and is available on his website. 

For plans governed by ERISA, federal law 29 U.S.C. 1024 grants the beneficiary (your client) the right to obtain numerous documents from the "plan administrator."  This person is designated in the plan documents, and usually a human resources director or someone else working for the client's employer.  There are a host of documents the law requires the plan administrator to provide when requested by the beneficiary -- copies of the Summary Plan Description, the annual report, the trust agreement, contracts and other "instruments under which the plan is established or operated."  29 U.S.C. 1024(b).  Failure of the plan administrator to provide any of these requested documents within 30 days creates a penalty against the administrator of $110 per day.  

This is important because it requires the plan administrator to provide documents you need to evaluate your client's rights within 30 days, or face a penalty.  As the days accrue without your client's documents in hand, the greater the plan administrator's potential liability to your client. 

But beware of attempting to enjoy this benefit from third-parties allegedly acting on behalf of the plan or even the plan administrator, Baron says. Many healthcare plans outsource subrogation and reimbursement requests to third parties, often referred to as "plan representatives."  These third parties may or may not comply with your requests for information.  According to Baron's article, you deal with these entities at your own risk, as it is unclear whether these third-parties are at all accountable to the requirements of 29 U.S.C. 1024 and the ensuing penalties.  

Baron also offers several helpful hints on identifying the plan administrator, including asking the client to make the request in their own letter or even submitting the request in person.  It is unclear he says if the protections of the Federal law are triggered by the attorney, and not the beneficiary, making the request.  

 

Ben Price is a partner at the law firm of Jarrett & Price in Savannah, Georgia. The information on this site is intended for Plaintiff's lawyers only. The content on this site does not establish an attorney-client relationship and in no way should be considered legal advice.

]]>Fri, 12 Dec 2014 22:02:05 GMThttp://lienresource.com/news-and-info/are-erisa-plans-subject-to-made-wholeA common misconception when dealing with ERISA-regulated healthcare plans is that the plans are never subject to the "made whole" doctrine.  

When applicable, the "made whole" doctrine, or "full compensation rule," states that an insurer has no right to reimbursement for benefits paid out of the plaintiff's recovery from a third-party unless the plaintiff has been "fully compensated" for all damages, otherwise known as "made whole." 

This is a statutory protection in many states, including Georgia, which can be found at O.C.G.A. 33-24-56.1.  Pursuant to the statute, a benefit provider retains the right to reimbursement only in situations where the client's recovery is greater than all economic and non-economic losses. 

However, because most health insurance in this country is employer-based, and therefore regulated by the Federal Employee Retirement Income Security Act (ERISA), the state protections often do not apply to your client's healthcare plans due to federal pre-emption.   

However, the "made whole" doctrine does not only apply to plans subject to state law.  The 11th Circuit Court of Appeals announced in Cagle v. Bruner, that the "made whole" rule is the default rule in all ERISA reimbursement cases in the 11th Circuit based on federal common law.   Cagle v. Bruner, 112 F.3d 1510, 1522 (11th Cir. 1997).  According to Cagle, the only question is whether the ERISA plan contracts out of the doctrine by inserting "clear and unambigious" language into the plan that specifically rejects the rule.  If there is no language rejecting the doctrine, the client may not have to reimburse the plan if you can successfully argue the client was not made whole. 

Therefore a careful reading of the plan to look for language that specifically rejects the made-whole rule is required in every case involving an ERISA plan.  Where this language does not exist, Cagle v. Bruner states your client must be made-whole for the plan to have a right to reimbursement. 

See also Adelstein v. Unicare, 31 Fed. Appx. 935 (11th Cir. 2002) and Summerlin v. Georgia-Pacific, 366 F.Supp.2d 1203 (M.D. Ga. 2005) for more explanation by the Court of when the "made whole" rule applies or does not apply to rights of reimbursement claimed by ERISA plans. 

Ben Price is a partner at the law firm of Jarrett & Price in Savannah, Georgia. The information on this site is intended for Plaintiff's lawyers only. The content on this site does not establish an attorney-client relationship and in no way should be considered legal advice.

]]>Fri, 12 Dec 2014 22:01:53 GMThttp://lienresource.com/news-and-info/make-use-of-the-10-day-ruleWhen dealing with insurance regulations, it is a rare scenario to find a law that actually appears designed to help the insured and not the insurer.  The notice provisions or "10 day rule" found in Georgia Code Section 33-24-56.1 is one of those exceptions. 

Here's where to find it. 

The code section, 33-24-56.1, is referred to as Georgia's "anti-subrogation statute."  Per the statute, an insurer's right to seek reimbursement for benefits paid is allowed only in cases where the insured's recovery proceeds are greater than all economic and non-economic losses, exclusive of losses for which reimbursement is sought. This is commonly referred to as the "Made Whole Doctrine," or "Full Compensation Rule."  Basically, it means there is only a right to reimbursement by the state-regulated insurer whenever the plaintiff's recovery proceeds are greater than the damages, even after those proceeds are reduced by the reimbursement claim.

The code section also contains a strict notice provision in 56.1(g) that can prevent insurers from being able to argue the client was made whole. This is the "10-Day Rule."

Under the 56.1(g) notice provision, an attorney can request an itemized list of payments from the insurer showing the payments for which it is seeking reimbursement.  The regulation says this should be sent at least 10 days prior to settlement or trial, and -- most importantly -- by certified mail or statutory overnight delivery.

Should the attorney send this via certified mail and follow the other specifications, there is a reciprocal notice requirement in 56.1(h) for the insurer to follow.  Per the statute, the insurer must respond with its itemized list of payments -- also via certified mail or overnight delivery --  prior to settlement or trial.  If the insurer fails to respond by certified mail prior to settlement or trial (such as faxing the ledger at the last minute) the insurer is in violation of the statute.

This failure to properly respond per the statute allows the plaintiff attorney to argue the insurer is cut off from being able to argue the patient was made whole, and therefore no right to reimbursement exists. 

Even if the insurer does successfully comply with the statute, there is no guaranteed right to reimbursement.  The insurer still has the burden of showing the client is made whole, and the reimbursement must be reduced by the attorneys fees and expenses, per the statute. 

Ben Price is a partner at the law firm of Jarrett & Price in Savannah, Georgia. The information on this site is intended for Plaintiff's lawyers only. The content on this site does not establish an attorney-client relationship and in no way should be considered legal advice.]]>Fri, 12 Dec 2014 22:01:38 GMThttp://lienresource.com/news-and-info/make-the-case-your-client-was-not-made-whole
You’ve made the case to the health insurance contact that your client’s plan is not governed by ERISA but is a state-regulated plan protected by the state’s anti-subrogation code at O.C.G.A. § 33-24-56.1. Now you can argue your client was not made whole, and the health insurer will kindly close their file and go away.

Not so fast.  Making the argument your client was not made whole or “fully compensated” pursuant to this code section is not always an easy task -- especially when your client’s settle for less than the liability insurance policy limits.

Under § 33-24-56.1, state-regulated insurance has no right to reimbursement for treatments paid for by the plan when the “… amount of the recovery exceeds the sum of all economic and noneconomic losses incurred as a result of the injury, exclusive of losses for which reimbursement is sought.”  So after you deduct the amount of the client’s medical specials (the losses for which reimbursement may be sought), the remaining recovery proceeds must still be greater than the client's damages for the client to be considered "made whole." Otherwise, there is no right to reimbursement, per the statute.  

This is a tough standard for the health insurer to overcome, especially in low-liability-limits cases, or claims where medical specials make up a large portion of the damages. 

However, in higher limits cases where your  client settles for less than limits, it’s a more difficult argument.  Health insurers are more likely to remain adamant your client was made whole and consequently less likely to go away. 

Beware of Thompson v. Fed Express

An older federal case in Georgia held that because a claimant accepted full policy limits of a third-party settlement in exchange for a general release, the patient could not argue that he was not made whole.  Thompson v. Fed Express, 809 F. Supp. 950, 954 (M.D. Ga. 1992).  You will sometimes see health insurers cite to this case to claim an absolute right to reimbursement where a claimant accepts policy limits.  This is in direct conflict with Smith v. Life Ins. of N. Amer., 466, F. Supp. 2d 1275, 1289 (N.D. Ga. 2006).  In Smith, the Court specifically states the argument does not apply to reimbursements based on Georgia's anti-subrogation code ( §  33-24-56.1), and recognized there are many reasons why a claimant would settle for less than policy limits knowing it would not fully compensate him.  

Reasons to Settle for Less than Limits
There are a number of reasons you can cite to the insurance company for why your client chose to settle the case for less than policy limits.  In Smith, the Court noted concerns such as questionable liability or concerns about the tortfeasor's solvency.  Add to this list any number of other basic reasons:  avoiding the risk of a jury trial; need for cash now rather than wait for trial; insurance coverage issues; comparative negligence and assumption of the risk arguments; coverage issues; or expenses. Basically, restate all the reasons for settlement you expressed to your client in your letter to the health insurer. 

Remember that even if you are unsuccessful in arguing your client was not made whole, the health insurer must offset the reimbursement claim by pro-rata share of attorneys fees and expenses, per the statute.  This will sometimes result in shrinking the reimbursement claim enough that it will dissuade the health insurer from further efforts to seek reimbursement.  

Ben Price is a partner at the law firm of Jarrett & Price in Savannah, Georgia. The information on this site is intended for Plaintiff's lawyers only. The content on this site does not establish an attorney-client relationship and in no way should be considered legal advice.






   

]]>Fri, 12 Dec 2014 22:01:23 GMThttp://lienresource.com/news-and-info/when-plans-dont-provide-documents-make-em-payObtaining the proper plan documents and contract language is essential to evaluating whether an ERISA-regulated healthcare plan has a right to seek reimbursement from an injured party's tort recovery.  That's the raison d'etre of 29 U.S.C. 1024(b)(4), which lays out what documents the plan administrator has a duty to provide the beneficiary when requested.  Failure to provide the requested documents within 30 days can subject the plan administrator to penalties of $110 a day, pursuant to statute 29 U.S.C. 1132.  

But how do you enforce the penalty and who is liable to pay it?  That's answered in an informative article by Chattanooga disability benefits attorney Eric Buchanon. 

The 11th Circuit has upheld penalties when plan administrators fail to timely provide documents when requested by plan beneficiaries.  Curry v. Contract Fabricators, Inc., 891 F. 2d 842, 848 (11th Cir. 1990).  In fact, a Georgia district court upheld a $5000 penalty against a plan administrator in 1996.  Hamilton v. Mecca Inc., 930 F. Supp. 1540, 1557 (S.D. Ga. 1996).  In each of these cases, the plan administrator was personally liable for the failure to provide requested documents from the plan beneficiary. 

Buchanon's article offers an exhaustive list of other circuits which have enforced these penalties, citing approximately 50 cases in which a court has upheld fines.  However, how courts decide when penalties are appropriate, and to what degree, varies considerably according to cases cited in the article. 

These cases show that the penalties referenced in ERISA regulations do have teeth.  When faced with a reluctant or non-responsive plan, a letter citing these cases may be the motivation a plan administrator needs to finally provide the documents the beneficiary has a right to see. 

Ben Price is a partner at the law firm of Jarrett & Price in Savannah, Georgia. The information on this site is intended for Plaintiff's lawyers only. The content on this site does not establish an attorney-client relationship and in no way should be considered legal advice.]]>