When a personal injury claim is settled, or a jury awards a verdict, there are often many hands out from hospitals, insurance companies, and governmental agencies asking to be paid something. What rights do these organizations have, and to what extent do their requests need to be honored? This is a complex area of law and skilled lawyers, like those at Keane Law LLC, are experienced in navigating these tricky waters.
Missouri statutes, like § 430.230 and § 430.235, state that a Missouri doctor’s office, hospital, or medical clinic may assert a lien for the reasonable cost of treatment rendered to an injured person, should that person recover from a third-party (the “at fault person”) for the injuries the provider treated. In other words, if your doctor provides you with $1000 in treatment related to a car crash, and you recover insurance money in settlement of liability claims related to the car crash, then your doctor is entitled to assert a lien against your recovery for the $1000 they are owed. It is worth noting that the Missouri Supreme Court has held that these liens are not valid against wrongful death claims. (1)
Medicaid is a government program set up to provide medical care to people in financial need. In Missouri, Medicaid is administered by the Division of Medical Services of the Department of Social Services (“DSS”) and is known as “MO HealthNet”. (2) If a Medicaid recipient recovers from a third-party insurance company on any liability claim for which Medicaid has paid some, or all, of that recipient’s benefits, DSS can assert a lien asking to be repaid. However, Missouri Statute § 208.215 provides that the amount of the lien may be negotiated and it is possible that less than the full amount paid by Medicaid would be owed.
Medicare liens are often referred to as “super liens” because they often take precedence over other similar claims. Medicare is a national health insurance program, administered by the federal government, and governed by United States’ federal laws. Like the other types of liens or subrogation interests talked about here, if Medicare pays the medical expenses for an injured person, in whole or in part, these payments are subject to reimbursement and Medicare has the right to file suit to collect on them.
ERISA Health Insurance Plans
Many people have private health insurance through companies like Cigna and United Health Care provided to them through their employers. Generally speaking, in Missouri, a health insurer cannot become subrogated, i.e. “reimbursed”, to an insured’s personal injury claim. (3) The exception to that rule is when the insurance plan is controlled by the federal “Employee Retirement Income Security Act”, or “ERISA”, which regulates employee welfare and benefits plans. Health insurance plans fall under ERISA if they are “self-funded”, meaning that an employer pays for the benefits directly or from a trust fund, or they are “fully-insured”, meaning an employer purchases an insurance policy through a company like Blue Cross Blue Shield, for example. About half of all employee insurance plans fall into the “self-funded” category. (4)
Generally, the “self-funded” plans get all the benefits that ERISA provides, while “fully-insured” plans get some of the benefits. One of those “benefits” applicable to insurance plans like these is the right of subrogation, essentially saying that these insurers have the right to be paid back for health care that they’ve covered. So if your private health insurance plan paid for some of your treatment related to an injury case, and it is a plan governed by ERISA, they are likely entitled to be repaid for what they paid to your health care providers.
The good news is that many of these liens and subrogation interests can be fully satisfied for less that the full amounts these organizations claim are owed. A knowledgeable attorney handling a claim that involves one of these situations, like those at Keane Law LLC, can often negotiate these obligations for far less that what a doctor or health insurance company claim they’re owed. For example, Missouri statutes say that certain types of liens must be satisfied for less than the full amount if the amounts claims exceed half of what a client may net from a settlement or verdict.
- (1) Am. Family Mut. Ins. Co. v. Ward, 774 S.W.2d 135 (Mo. 1989)
- (2) https://mydss.mo.gov/healthcare
- (3) Travelers Indem. Co. v. Chumbley, 394 S.W.2d 418 (Mo. App. 1965)
- (4) Kaiser Family Foundation, “Chapter 11: ERISA Plans”, https://www.kff.org/wp-content/uploads/sites/3/2015/06/c11.pdf