Articles Posted in Liens

Supreme court.jpgA new case from the United States Supreme Court, U.S. Airways v. McCutchen, Docket No. 11-1285, decided April 16, 2013, represents a small glimmer of hope on the otherwise bleak landscape for injured plan participants trying to negotiate medical liens asserted by ERISA welfare benefit health plans. ERISA applies to claimants whose medical bills are covered by employer-sponsored medical plans.

Handling personal injury cases has been growing more increasingly complex in recent years and one reason for this has been the growing efforts of those who pay medical expenses for injured plaintiffs to recover their costs from third party tortfeasors. By attempting to recover these costs, the payers of claimants’ medical expenses end up competing with injured plaintiffs for the limited settlement funds.

Health insurers have long asserted subrogation interests and prudent counsel have often been successful in reducing and sometimes eliminating these claims. Two legal arguments that have been primarily used against health insurers have been the “common fund” doctrine and the “make-whole” doctrine. The “common fund” doctrine is based on the argument that if an insurer benefits from a fund created as a result of the efforts of the injured party to recover damages from a tortfeasor, the insurer should also share in the costs incurred in creating that fund, typically attorneys’ fees and expenses. The “make-whole” doctrine is based on the principle that the injured party should be made “whole,” that is, reimbursed for all losses, including pain and suffering and lost income, as well as costs, including attorney fees, before the insurer can recover for the costs of its medical insurance by way of subrogation.

Medicare.jpgThe Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA), which became effective on July 1, 2009, made significant changes to the Medicare Secondary Payer Statute (42 U.S.C. § 1395y). Particularly, Section 111 of MMSEA imposes strict reporting requirements on liability insurance plans, no-fault insurance plans and workers’ compensation plans. These plans are now required to submit information about settlements of personal injury claims to The Center for Medicare and Medicaid Services (CMS). Penalties for non-compliance can be a high as $1,000 per person for each day of noncompliance.

The CMS takes the position that any settlement of a personal injury claim that extinguishes liability for future medical expenses in a claim against a primary payer represents a situation in which “payment has been made” for an item or service otherwise covered by Medicare. Thus, Medicare should not be required to provide future coverage for those items or services until the payment has been exhausted on future medical expenses recovered for the injury. This is true whether the primary payer is a worker’s compensation plan, an automobile or liability insurance plan, or no fault insurance (including self-insured plans). CMS requires that its interests as secondary payer be “reasonably considered” in the settlement of any claim for medical expenses against a primary payer.

Several years ago, the Center for Medicare and Medicaid Services (CMS) published a memo outlining the policies and procedures for dealing with Workers’ Compensation Medicare Set-Aside Arrangements (WCMSA). The basic premise of a WCMSA is taken from the Medicare Secondary Payer statute. The Medicare Secondary Payer (MSP) statute sets forth Medicare’s status as secondary payer to any claim covered by a workers’ compensation carrier or a self-insured employer. If a workers’ compensation claim is settled and the settlement includes compensation for future medical expenses, then CMS refers to the case as a “WC commutation case.” Medicare takes the position that by releasing the workers’ compensation carrier from liability for future medical expenses, in reality, the settling person is transferring the liability for coverage of such future medical expenses to the Medicare program. Therefore, the CMS requires that any money paid to settle the future medical must be spent on medical expenses related to the injury before Medicare will resume coverage.

Lien.jpgIf you hire a contractor to perform improvements to real property in Texas and a dispute arises as to payment, the contractor may be entitled to enforce a lien against the property to secure payment. However, in order to do so, the contractor must comply with Chapter 55 of the Texas Property Code.

Under Chapter 55, a contractor has a lien if the person labors, specially fabricates material, or furnishes labor or materials for construction or repair in this state of a house, building, or improvement; a levee or embankment to be erected for the reclamation of overflow land along a river or creek; or a railroad; and the person labors, specially fabricates the material, or furnishes the labor or materials under or by virtue of a contract with the owner or the owner’s agent, trustee, receiver, contractor, or subcontractor. Certain other persons such as architects, engineers and landscapers also have lien rights under Chapter 55.

The lien extends to the house, building, fixtures, or improvements, the land reclaimed from overflow, or the railroad and all of its properties, and to each lot of land necessarily connected or reclaimed. However, the lien does not extend to abutting sidewalks, streets, and utilities that are public property.

Lien.jpgIf you hire a contractor and a dispute arises over payment, the contractor may have the right to assert a lien against your property to secure payment for his work. However, sometimes the lien asserted by the contractor may be invalid. If that is the case, Section 53.160 of the Texas Property Code governs the procedure for removal of such lien until it has been proven to be valid in a court of law.

Section 53.160 provides that, in a suit brought to foreclose a lien or to declare a lien invalid or unenforceable, a party objecting to the validity or enforceability of the lien may file a summary motion to remove the lien before a final trial on the merits is had in the suit. The motion must be verified and state the legal and factual basis for objecting to the validity or enforceability of the lien. The motion may be accompanied by supporting affidavits.

The grounds for objecting to the validity or enforceability of the lien are limited to the following:

Gavel.jpgIf you have recovered a judgment in a lawsuit, Chapter 52 of the Texas Property Code governs the procedure for the enforcement of a judgment lien in Texas.

Chapter 52 of the Texas Property Code provides that an abstract of judgment, when it is recorded and indexed in accordance with this chapter, constitutes a lien against and attaches to any real property of the defendant, other than real property exempt from seizure or forced sale under Chapter 41 of the Texas Property Code, the Texas Constitution, or any other law, that is located in the county in which the abstract of judgment is recorded and indexed, including any real property that is acquired after the date the abstract of judgment is recorded.

On application of a person in whose favor a judgment is rendered or on application of that person’s agent, attorney, or assignee, the judge or justice of the peace who rendered the judgment or the clerk of the court in which the judgment was rendered is required to prepare, certify, and deliver to the applicant an abstract of judgment. After the applicant for the abstract of judgment pays the fees required by law for providing the abstract, the county clerk must record, in the real property records of that county, each properly authenticated abstract of judgment that is presented to the clerk for recording. The clerk must also note in the real property records the date and hour the abstract of judgment was received.

65898_emergency_room.jpgAfter you have been injured in an accident you may require treatment at a hospital on an emergency basis. But did you know that the hospital could have a lien against your claim against the responsible party to secure payment for its services. In Texas, this is what is known as a Hospital Lien. Knowing you rights with respect to Hospital Liens is critical in getting the full value of your settlement.

Hospital Liens are permitted by Chapter 55 of the Texas Property Code. A hospital has a lien on a cause of action or claim of an individual who receives hospital services for injuries caused by an accident that is attributed to the negligence of another person. For the lien to attach, the individual must be admitted to the hospital not later than 72 hours after the accident. The lien extends to both the admitting hospital and any hospital to which the individual is transferred for treatment of the same injury.

A Hospital Lien attaches to:

  1. a cause of action for damages arising from an injury for which the injured individual is admitted to the hospital or receives emergency medical services;
  2. a judgment of a court or the decision of a public agency in a proceeding brought by the injured individual or by another person entitled to bring the suit in case of the death of the individual to recover damages arising from an injury for which the injured individual is admitted to the hospital or receives emergency medical services; and
  3. the proceeds of a settlement of a cause of action or a claim by the injured individual or another person entitled to make the claim, arising from an injury for which the injured individual is admitted to the hospital or receives emergency medical services.

A hospital lien is limited to the amount of the hospital’s charges for services provided to the injured individual during the first 100 days after the injured individual’s hospitalization and may also include the amount of a physician’s reasonable and necessary charges for emergency hospital care services provided to the injured individual during the first seven days of the injured individual’s hospitalization. At the request of the physician, the hospital may act on the physician’s behalf in securing and discharging the lien.

To secure the lien, the hospital must file written notice of the lien with the county clerk of the county in which the services were provided. The notice must be filed before money is paid to an entitled person because of the injury. The notice must contain:

  1. the injured individual’s name and address;
  2. the date of the accident;
  3. the name and location of the hospital or claiming the lien; and
  4. the name of the person alleged to be liable for damages arising from the injury, if known.

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