This is a General Outline of how I, as a San Diego California Personal Injury Attorney, look at my Injured Client's Health Lien issue BEFORE I start to negotiate down the Health Lien Interest:

LIEN OR CLAIM PRESENTED - I first determine who is holding the lien - public or private health plan?  I use the following as my step-by-step guide:

STEP 1:
DETERMINE BASIS FOR LIEN OR CLAIM

Insurance Co./HMO/PPO

Use CC §3040. If an insured ERISA plan, subject to ERISA but also subj to CC 3040 & other state insur. regs per insurance "savings clause" in 29 USC 1144.

Union

Subject to ERISA.

Employer or Plan Administrator

Subject to ERISA if it a group benefit of employment with private (vs. public) entity. If not ERISA, then governed by contract principles and possibly govt. regs (like CFR's).

Hospital

Was a hospital lien properly perfected under CC 3045.1? If

not, no lien attaches. If so, then check substantive defenses (balance billing, 1st party coverage, Knox-Keene, etc.).

STEP 2:
APPLY APPROPRIATE LAW

I first determine if my injured client's health plan is protected by ERISA?  If so, different rules apply if it is a "self funded" plan or an "insured" plan.

INSURANCE COMPANY OR HEALTH CARE SERVICE PLAN

I then examine contract language concerning reimbursement. Several large plans (notably Kaiser) do not purport to assert reimbursement rights vs. first party coverage, like UIM. See e.g. Ins. Code §10270.98. If reimbursement provision does apply and properly drafted, then use CC 3040-- codifies common fund, max. recovery of 1/3 of gross settlement where attorney retained (very helpful in low policy limit situations), and comparative negligence where there has been such a finding by judge, jury or arbitrator.

COUNTY MEDICAL SERVICES (CMS)

Per Mares v. Baughman, 92 Cal.App.4th 672 (2001), CMS type lien (per Govt Code §23004.1) invalid against a settlement--only valid against judgment.

CA CHILDREN’S SERVICES (CCS)

Per Tapia v. Pohlman (1998) 68 Cal.App.4th 1126, CCS has first priority lien claim for recovery of CCS payments pursuant to H&S §123982.

MEDI-CAL

In Arkansas DHHS v. Ahlborn, 126 S. Ct. 1752 (2006) the Ct held that a Medicaid beneficiary who recovered only 1/6 of her personal injury damages due to her 5/6 comparative fault was only obligated to pay back 1/6 of the amount paid by Arkansas DHHS. This holding should be fully applicable to Medi-Cal cases as the California Medicaid program. As a practical matter, whenever Medi-Cal's 50% of net rule kicks in, it is likely that the plaintiff has not recovered his full medicals and that some further reduction of Medi-Cal's reimbursement is in order. This rule will frequently be triggered in policy limits cases. Note this unanimous decision was decided only 2 weeks before S. Ct's unanimous decision in Sereboff, which declined to decide the undercompensation issue in the ERISA context. NOTE WELL—The holding of the Ahlborn case was codified in CA in 2007 in W&I 14124.76(a-d). See also Bolanos (2008) 169 Cal.App.4th 744; also Branson, Lopez and Lima cases in Case List.

MEDI-CARE

Medi-Care is always considered to be in secondary position per Secondary Payer statutes. Medi-Care will not pay a claim if payment can be expected within a short period (120 days) from any other source. Therefore, be cautious about requesting records or bills w/in 120 days of injury. Medi-Care pays only about 20-25% of the bills submitted and prohibits balance billing. Anyone connected to the case can be liable for non-payment of the MC lien and attorneys must give notice. Plaintiff is entitled to an actual common fund credit for attorneys fees and costs per statute. Medi-Care has announced it is implementing reporting requirements for insurance companies, possibly to extend Medi-Care set aside trusts to personal injury cases, effective 7/1/09. Previously, set asides for future medical bills have been implemented only in workers comp cases.

s="MsoNormal">FEDERAL MEDICAL CARE RECOVERY ACT (MCRA) 42 USC 2651 et. seq.

Applicable to medical care provided through military benefits, Tri-Care, VA, etc. §2651(a) provides for subrogation of govt to injured person’s rights and may require injured person to assign rights to govt. BUT, §2652(c) provides that, “No action taken by U.S.... shall operate to deny to the injured person the recovery for that portion of his damage not covered hereunder.” Where insufficient funds exist to satisfy both the govt and injured person’s claims, 2652(c) has been interpreted to require proration (Commercial Union Insurance v. U.S., 999 F.2d 581 (D.C. Cir. 1993) or as a make whole rule barring govt’s recovery (Allen v. U.S., 668 F.Supp 1242 (WD WI 1987).

Mark C. Blane is a San Diego Personal Injury Attorney, and the managing lawyer of the Law Offices of Mark C. Blane, a San Diego, California Personal Injury Law Firm dedicated to representing families of people injured in personal injury accidents including car accidents, slip and falls, dog bites, product defects, and the like. If you or a loved one has been killed or injured in an accident in San Diego, or Southern California, due to the negligence of another, please order your free copy of Mr. Blane's book, The 10 Secrets You Need To Know About Your Injury Case, BEFORE You Call A Lawyer. It is full of helpful information that will help you protect your legal rights and it normally sells for $16.95.  However, it is free to all California residents, or those injured in an California accident.