LetsBeFrank

Reimbursement and Recovery – Medical Care Providers

Increasing costs of medical care have created reimbursement and recovery incentive for providers. Often times medical care secondary to an injury, whether work related or otherwise, becomes the subject of recovery and reimbursement attempts by the providers, as the providers are not inclined to provide care that is not their liability. This article explores and discusses the various means healthcare providers can assert and recover liens, including intervening in workers’ compensation claims.

Workers’ Compensation
Under the Colorado Workers’ Compensation Act, Sec. 8-42-101, C.R.S., an injured worker cannot be responsible for bills or reimbursement to a medical care provider, so long as the medical care was received for a work injury. The workers’ compensation carrier or self-insured employer also has an automatic assignment of any amounts paid in a workers’ compensation claim that allows it to recover amounts directly against any third party responsible for the injury.

A problem arises when treatment is received for a work injury, but the claim is denied, meaning the carrier or self-insured employer are contesting liability. Often in these cases, the carrier or self-insured employer may try to settle on a denied basis, meaning that they are not admitting liability for the claimed injury. If medical care has been provided for the injury, the provider may seek reimbursement against the injured worker, making such a settlement a risky proposition for the injured worker and his attorney. In addition, the medical care provider has an arguable ability to intervene in the underlying workers’ compensation case as an interested party. Recent statutory changes that make the injured worker not responsible for medical bills also make the workers’ compensation insurer liable for medical care for treatment to the injured worker in the event that the claim is ultimately deemed compensable. I have successfully intervened in workers’ compensation cases on behalf of a large hospital where it was undisputed that the injured worker was hurt working, but the employer was uninsured. This created statutory employer liability for a general contractor that was denying the claim and attempting to settle the case on a denied basis. Obviously, the carrier for the statutory employer was attempting to settle the case without regard for medical treatment the injured worker received. I managed to intervene in the matter and attend a settlement conference. In this way, I was able to get some reimbursement for medical care provided to the injured worker. Therefore, be cautious in settling a claim on a denied basis when you are aware that there are medical care providers that expect reimbursement.

Hospital Liens
Hospitals have a lien on any third party recovery, when the lien is properly perfected with the Secretary of State. It is simple to determine if a medical lien exists on a claim by simply accessing the Secretary of State’s website and checking for any UCC filings by known medical care providers to any plaintiff or claimant. If a case is settled without regard to the hospital lien, the hospital can collect reimbursement against the individual or entity that ignored its lien. Further, the hospital can receive attorney’s fees paid if the statutory lien is violated. Historically, hospitals have not been very efficient in filing a lien with the Secretary of State; however, I strongly recommend that the status of liens be determined prior to any settlement of a workers’ compensation case or liability suit.

Assignments
Medical care providers often require a patient (or representative of the patient) to sign a document before receiving care. This document is in the form of a guarantee for payment; however, this document will also include an assignment from the patient to the medical care provider for any rights or proceeds asserted or collected against a third party responsible for the injury. Sometimes these assignments include assignments of any claim to workers’ compensation benefits. Such an assignment is ineffective as workers’ compensation benefits cannot be assigned to a third party. Regardless, if an injured worker settled the workers’ compensation case on a denied basis, or for amounts that were not yet realized as workers’ compensation benefits, payment of this amount to the injured worker rather than to a medical care provider may be a breach of an assignment. In fact, recent case law has recognized that there is an entirely new cause of action for breach of an assignment. This cause of action is similar to a breach of contract in that the assignment arises out of a contract. The individual or entity that breaches an assignment has to be made aware of the potential assignment before a breach can be claimed. Therefore, to the extent that any medical care provider has supplied a treatment document signed by the injured individual, that document should be examined for any assignment from the injured individual to the medical care provider. Keep in mind that this problem is not unique to workers’ compensation claims, but to any liability claims as well.

Other Methods of Recovery – Spousal Necessity Doctrine
Medical care providers have other potential avenues of recovery for treatment supplied to an injured individual. In particular, there is an old statute in Colorado, as well as in other States, that makes a spouse individually responsible for payment for necessities of the other spouse. Case law interpreting this statue has made a spouse responsible for legal fees, housing costs and other bills that have been incurred by the other spouse. Although there is no case directly on point, I have managed to obtain a judgment against a spouse for medical treatment as a necessity under this particular statute.

Other Methods of Recovery – Custodial Care
Custodial responsibility is a mechanism by which a medical care provider can obtain reimbursement. For instance, individuals in the custody of a law enforcement agency are not primarily responsible for medical care. Instead, the entity that has placed the individual in custody is responsible for medical care. There are instances when an individual may be in custody, but not under arrest. If medical treatment is needed while that individual is in custody, but not under arrest, the entity placing the individual in custody is responsible for the medical care. I have successfully obtained a judgment against a law enforcement agency for treatment a hospital provided to a criminal that was not yet arrested, but that I argued was in custody.

Bottom Line
Any carrier or employer has to be conscious of medical care providers that have provided treatment for any claimed injury. With medical care costs continuing to rise, medical care providers are much less likely to write-off, or ignore, avenues for reimbursement and they are growing more aware of any potential for reimbursement through possible insured losses.