Third Party Liability, Liens, and Workers Compensation

1. Third Party Liability, Liens, and Workers Compensation By Isaac S. Schreibman, Esq. Presented to the Wisconsin Revenue Cycle Co-op/AAHAM May 8, 2014

2. Agenda • Defining Third Party Liability • Hospital Liens: Protecting Provider Rights to Reimbursement • How Does it Work in Wisconsin? • Required Elements and Recommended Perfection Tips • Sample Lien • The Reimbursement Process • Importance of Follow Up • Additional Reimbursement Opportunities • Lien Adjudication • Evaluating Settlement Offers • How to Handle Bankruptcy • Workers Compensation • Case Studies

3. Defining Third Party Liability: Important Terms • Med Pay/Personal Injury Protection:Patient’s auto policy • Limited benefits • Claims are paid in the order they are submitted and until benefits are exhausted. • Liability Insurance: Negligent party • Underinsured or Uninsured Motorist Protection:Patient auto insurance • Subrogation:Patient right to recover is transferred to a third party (e.g. health insurance or Medicare) via contract and after payment • Statute of Limitations: Personal injury case • In Wisconsin, must be filed within 3 years of occurrence • Lien:Creditor’s secured interest • Tortfeasor: Negligent party

4. Defining Third Party Liability: Negligence “The omission to do something which a reasonable man, guided by those considerations which ordinarily regulate human affairs, would do, or doing something which a prudent and reasonable man would not do.” ~Ballentine’s Law Dictionary Not all accidents and injuries are the result of negligence!

5. Defining Third Party Liability: Common Types of Liability Claims

6. Defining Third Party Liability: Anatomy of a Personal Injury Claim • Auto Driver • Auto Owner • Pedestrian • Bicyclist • Homeowner • Business Owner • Parents • Governmental Entities • Manufacturers (Product Liability) • Contributory Negligence

7. Identifying Third Party Liability • Attorney requests for bills or medical records • Emergency room care • Police or EMT reports • Patient contact/interview • Therapy charges • Trauma diagnoses

8. Defining Third Party Liability: Indications of a Case • High-dollar open balance accounts (greater than $10,000) • Accounts with communication (written or verbal) from an attorney representing a patient: • Attorney requests for itemized bills or medical records • Settlement offers or requests to reduce the outstanding charges • Legal pleadings (e.g. Subpoena, Complaint) Always evaluate for potential third party reimbursement or Financial Assistance eligibility prior to sending accounts to collections.

9. Hospital Liens: Protecting Provider Rights to Reimbursement • Why should I pursue liability cases? • Maximize reimbursement and potentially recover total charges • Creates a secured interest • Creates a right to payment from third parties • Allows providers to built trust with patients by advising patients of their rights to a liability claim • What does it take to pursue a liability case? • Dealing with patient’s attorneys • Specialized, thorough, detailed knowledge of regulations and process • Preparation and perfection of Hospital Lien

10. Hospital Liens: Protecting Provider Rights to Reimbursement

11. Hospital Liens: Protecting Provider Rights to Reimbursement • How Does it Work in Wisconsin? • Lien right is created by state statute. Strict compliance with all provisions is required (Chapter 779.80-Wisconsin Revised Statues). • A hospital lien attaches to “any and all rights of action, suits, claims, demands…which such injured person…might have against any such other person for damages on account of such injuries, for the amount of the reasonable and necessary charges of such hospital.” • Third party payers are liable to the hospital for the amount of the lien for one year from the date of the payment. 779.80(4) WRS Third party payers may advise they have received a release or patient attorney has assumed responsibility……the payer remains liable for payment until the hospital releases its lien!

12. Hospital Liens: Protecting Provider Rights to Reimbursement • Required Lien Elements: • Name & address of patient (injured party) • Date and location of accident/injury • Name & address of hospital • Name & address of Tortfeasor • Recommended Lien Elements: • Liability insurance carrier • Lien should be be “verified”

14. Perfecting the Hospital LienProtecting Provider Rights to Reimbursement • File in the circuit court of the county where the injuries occurred or where the hospital is located. • File within 60 days of patient’s discharge from the hospital. • Send a copy of the notice by certified mail to the injured party and the person liable for those injuries within 10 days of filing the notice of lien. Include the date of filing. • The hospital shall also serve a copy of the notice of lien on any insurer which has insured the party alleged to be liable for the injuries. “If such hospital fails to give notice if the name and address of the person injured or the person allegedly liable for the injury are known or should be known, the lien shall be void.” 779.80 WRS Section (3)(b)

15. Hospital Liens: Protecting Provider Rights to Reimbursement • Want a perfect lien? Know the details: • Negligent Party (Tortfeasor) • Negligent Party’s attorney • Negligent Party’s liability insurance • Other negligent parties Liens should be served on all parties who have or may have funds payable to the injured party.

16. NOTICE OF HOSPITAL LIEN Injured Party: Liability Carrier: Baron Rollo Mutual Insurance Company 5420 W So uth St. 27763 W. Lakeview Drive N Philadelphia, PA 45124 Lake Barrington,IL60084 Claim No.:B1234 Injured Party's Attorney: Dewey, Cheatum and Howe 2525 Dempster Additional Liable Party: Evanston,IL 60202 Acme Truck Co. 1417 E. West Rd Liable Party: Milwaukee, W! 40151 Jim Jones Liability Carrier: P.O. Box 456 Los Angeles, CA 89898 State Insurance Co 1 Robinson St New Orleans, LA 78487 Claim No.:A1234 Sample Lien: Header Information

17. You are hereby notified that Baron Rollo, residing at 27763 W. Lakevie w Drive, N. Lake Barrington, IL 60084 was injured on or about 03/11/12, at SR 35 and Ely Road, Neenah, WI as a result of the negligence of Jim Jones , P.O. Box 456,Los Angeles, CA 89898. You appear to be holding funds or expect to be holding funds in the future against which Memorial claims a Hospital • Hospital Lien Baron Rollo is a patient in the hospital indicated below or was a patient from 04/12/11 due to said injuries. - Memorial Hospital - located at P.O. Box 841, Wauconda, IL 600 84, claims a lien upon any claim or demand or cause of action which the said injured party may have against the alleged liable party, and against any funds you may have presently or in the future which may be directed as payment to the injured party. This lien is authorized by the terms and provisions of the statutes of the State of Wisconsin (Ch. 779.80 WRS) relating to Hospital Liens. This lien is for the amount of the reasonable and necessary charges for the services rendered and to be rendered in t he treatment, care and maintenance of such injured person. All notices, including any notice to adjudicate are to be sent to The Law Office of Isaac S. Schreibman at the address below. Amount of Lien: $100.00 Sample Lien:Body Content

18. Date: April 15, 2012 By: Client: M emorial Hospital - Test The Law Office of Isaac S. Schreibman Attorney for Memorial Hospital - Test Account(s): 000123 P.O. Box 841 Wauconda,IL 60084 847 - 756 - 7 606 VERIFICATION _________________________ being duly sworn on his/her oath deposes and says that she/he is the duly authorized agent of Memorial Hospital - Test,that she/he has read the foregoing NOTICE OF HEALTHCARE PROVIDER LIEN and that all of the facts therein stated are true and correct. PROOF OF SERVICE The undersigned, being of legal age and being first duly sworn on oath, deposes and states that on ___________________, I served the foregoing Notice of Hosp ital Lien upon the above - mentioned persons by mailing a true copy thereof by certified mail and/or fax, email,regular mail to the above named persons at their respective addresses above shown. Sw orn and Subscribed before me on this______day of _____________, 2012. ____________________________ Notary Public/Attorney State of Illinois County of Lake Sample Lien:Concluding Elements

19. The Reimbursement Process: Executing Diligent Follow Up • Contact all parties and confirm lien was received • Confirm case status with patients’ attorneys and liability carriers • Confirm maximum benefits available • Confirm liens served by other providers • Follow up every 45-60 days

20. The Reimbursement Process: Additional Reimbursement Opportunities • Workers Compensation • Check for health insurance • Review HMO contracts • May be obligated to accept payment from health insurer • Medicaid and Medicare • Payers of “Last Resort” • Provider must make an “election”

21. The Reimbursement Process: Medicare as a Secondary Payer (MSP) • Medicare pays only after all other potential third party sources of payment • First 120 days after service, provider must pursue third party • After 120 days, provider can bill Medicare if it appears the third party will not pay “promptly”, or at all • Provider must release lien if Medicare is billed • Careful evaluation of third party payment potential is required to make correct “election”. Be aware of billing deadlines. • Liens will result in higher reimbursement than Medicare (in most cases) • Medicare has priority to all other liens at the time of settlement of the liability case

22. The Reimbursement Process: Adjudication of Liens • No set percentage or amount for provider provided for by statute • Wisconsin statute provides for no minimum recovery by patient • Court has the authority to adjudicate liens among lien holders • Patient is responsible for any amounts remaining after partial payment of lien, unless adjudicated or compromised

23. The Reimbursement Process: Evaluating Settlement Offers • Total amount of the settlement • Amounts and “types” of other liens • Distinguish between “bills” and perfected liens • Offer to compromise account or lien • Patient’s attorneys willing to reduce fee? • Patient willing to complete a financial assistance application for balance remaining after settlement? • Medicare liens

24. The Reimbursement Process: How to Handle Bankruptcy • Lien must be perfected prior to bankruptcy • Claim should be scheduled as “Priority and Secured” • Valid liens will survive if objection to discharge is filed (adversary claim) • Discharge by Bankruptcy Court terminates patient responsibility but not lien

25. Workers Compensation • Process for adjudication of claims to prevent employees from suing employers for injuries sustained in the workplace • Healthcare providers have no right to a lien • Patient is not responsible for payment unless: • Patient or attorney are not cooperative • Injuries found to be “non work-related” • Compensates injured employees for actual losses, not “pain and suffering” or punitive damages to punish the negligent party • Claims generally resolved faster than liability cases in state court • Employers are required to have Workers Compensation Insurance

26. Liability vs. Workers Compensation

27. Initial Inquiry (Written request to attorney) • In order to assist us in completing our investigation, please provide the following information; • Did the Patient have health insurance • Date of Injury • Nature of injury • Confirm name of employer • Name of employer's insurance carrier • Adjuster contact information • Copy of the Notice of Application

28. Process and Procedure • Department of Workforce Development • File case-if damages not paid voluntarily by employer • Notice of Application • Answer (within 20 days) • End of Healing (form 16(b)) • Certificate of Readiness

29. Documents • Application • Employer’s Answer (within 20 days) • Certificate of Readiness • Notice of Hearing (2 months) • Hearing Date (2-4 months from Notice) • Hearing in front of an Administrative Law Judge • Settlement Agreement-Needs to be approved by DWD-Payment within 21 days of approval

30. Process and Procedure (continued) • Hearing Date (60-120 dates from filing of notice) • File WCK3-list of medical expenses with supporting bills • Hearing (evidence and witnesses)-Administrative Law Judge • Reimbursement Rate-Reasonable and Customary Charges • Employee has right to bring a third party action (liability)

31. Workers Compensation and Health Insurance • Workers Compensation denial letter • Demand payment from Employer (Health Fund) • Advise of the right of Subrogation • Enlist the assistance of the patient’s attorney • Submit denial letter and itemized bills with medical records

32. Employers without Workers Compensation Insurance • Wisconsin Uninsured Employers Fund • Subrogation • ASU Group (State Adjuster)

33. Questions and Comments

34. Case Studies: Intervention • Situation: A patient was injured at work. Neither the patient’s health insurance carrier nor the workers compensation plan had paid the claim. The patient’s attorney filed suit in state court against the health insurer (an ERISA plan) and the workers compensation carrier. The health plan removed the case to federal court. • Action: Our office filed a Petition to Intervene on behalf of the hospital, naming both insurance carriers as Defendants. • Result: After holding a mediated settlement conference, a settlement was reached whereby each insurance company agreed to pay 50% of negotiated charges. The original bill was over 2 years old.

35. Case Studies: The Imperfect Lien • Situation: The patient settled a personal injury case for $100k. The hospital’s lien did not name the patient and was technically void under the relevant statute. The patient was an adult, but her mother had signed a payment guarantee at the time of service. • Action: We advised the patient’s attorney all parties had “constructive” notice of the hospital's claim as the imperfect lien was recorded by the county court. To further leverage the payment guarantee, we emphasized that legal responsibility for the outstanding debt ($108k) fell upon the patient’s mother who had signed the guarantee of payment. • Result: We negotiated a settlement of $30k.

36. For Additional Information or Copies of Referenced Material: Ike Schreibman The Law Office of Isaac S. Schreibman ike@ikeschreibmanlaw.com 847.756.7606 (C) 847.970.8248 (F)