Liens Analysis in Arizona
The word lien is often used to describe a situation where someone, generally a health insurance company, wants to be reimbursed out of your settlement for what they spent on your treatment. Or that services were provided or money loaned on the case with the understanding that there will be payment when the case settles.
Arizona is an anti-subrogation State meaning that we start with the basic law that health insurance does not get reimbursed. Then we have to look at the exceptions.
And in even harsher situations, a provider might accept your health insurance and then demand additional payment simply because they found out you are going to get a settlement.
Getting compensated for your injury is only part of what we do. Maximizing what goes to you is another part of what we do, and perhaps the most important part of what we do.
Sometimes there is a strategy to manage the claim and if necessary, the litigation process so that it works out to the best of your interest and that also is what we do.
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A consensual lien is a situation where you treat with a health care provider and they are going to wait for your case to settle to be paid. These are the most costly of the liens and the ones that will interfere with your settlement the most. You should only enter these agreements after talking to your attorney and exploring other options.
Nevertheless, they are a great way to get treatment that you might not otherwise be able to afford.
If you have health insurance, please use this for the hospital. Do NOT tell the hospital to bill the auto insurance.
Because some providers will not treat on a consensual lien, you may have to find other ways to pay for the treatment. Before you consider a personal injury loan (which often comes with interest rates of 60 percent or more), it is important to explore other possibilities. The Law Office of Eric Post, P.L.L.C., is glad to explore these possibilities with you.
You may come across a provider that normally takes your health insurance but because you now have an injury from a collision, the provider wants to treat you on a consensual lien. You need to know that the provider is then going be paid above what your health insurance would pay, and that that the extra payment will come out of your claim.
Health Insurance Liens
Arizona begins with the basic rule that health insurance may not recover what it has paid for your injuries. After all, you paid the premiums all these years so you should get what you paid for. Unfortunately, there are exceptions.
The Arizona Health Care Cost Containment System is entitled to be paid back if it pays money for your injury related treatment. Whether AHCCCS records a lien or not, they are entitled to repayment from your liability settlement. If AHCCCS records a lien with the County Recorder’s Office, their reimbursement rights extend into your uninsured and underinsured motorist insurance. These claims can sometimes be negotiated and sometimes it is necessary to appeal the claim if the amount asked for was inappropriate.
Some folks have health coverage from a large employer. If the employer participates in the Employee Retirement and Investment Security Act, the employer may be entitled to full repayment under Federal law up to the full policy limits available without regard for what it will cost you to make the claim. This potentially can put you in a worse position than if you did not make a claim at all. However, there is the possibility of negotiating the lien to make it worth your while to bring the claim. Such negotiations must be done before you settle. After all, we do want to hold the wrong-doers accountable for their actions. Letting them off the hook because ERISA wants it all goes against public policy.
Not all ERISA claims are valid. Attorneys often need to obtain the plan documents and read them in light of the current law to determine if a repayment is even necessary.
ERISA does not have to record a lien to retain it’s reimbursement rights. Knowing that there may be an ERISA claim and how to find it is important prior to settlement.
Tricare asks for reimbursement of medical expense under the Federal Medical Care Recovery Act. Tricare can claim a recovery out of all of the available funds that would be your share. Tricare may also claim your MEDPAY funds which can interfere with your ability to even get treatment. This does not put you in a worse position, as the ERISA can, but it could leave you with nothing. However, there is a possibility of a hardship reduction.
Medicare is entitled to reimbursement for any payments made for your medical expenses as the result of a collision. Medicare can be slow to respond. There is a mandatory reporting requirement to tell Medicare that you were involved in a collision, whether or not you are a Medicare recipient. If you are a Medicare recipient, Medicare will calculate a reduction, if any, to take into account the cost of attorney fees and litigation costs.
You may have MEDPAY, or Medical Payments Coverage, or Emergency Medical, or Personal Injury Protection (PIP) on your auto policy. This will apply to you as a pedestrian or bicycle rider, if your injury was caused by someone in a motor vehicle.
In some cases, you may have gone onto the vehicle and been thrown from it. This might allow the vehicle owner’s medical payment coverage to pay some of your bills.
In Arizona, any MEDPAY amount over $5,000 is subject to repayment (with some reductions) out of the claim that you have against the driver that hit you. In other States, there may be a full repayment requirement, or none, depending on the laws of the other States. You may have been injured in Arizona, but have auto insurance from another State. If so, there must be an analysis as to which State’s law is to be controlling.
The Federal Employee Health Benefit Act is a health insurance program that many federal employees have. Whether FEHBA gets repaid out of your injury claim or not is a matter that has fluctuated over the years. As the law changes, so do the repayment rights. Currently, FEHBA does have reimbursement rights in Arizona.
MEDICARE ADVANTAGE and MEDICARE SUPPLEMENTS
Medicare Advantage takes over for what Medicare would pay in most cases. Medicare Advantage has the same reimbursement rights as Medicare. Medicare Supplement plans do not.
If you are a State employee covered under the State’s health plan, the Arizona Department of Administration might claim lien rights to be reimbursed for medical bills that it pays for your injury. ADOA may claim reimbursement rights out of the liability settlement, but is limited to your share of that settlement, meaning that the cost of making the claim is not charged back to you. ADOA is not entitled to money from your underinsured motorist funds.
Under these ADOA reimbursement rights, a subdivision of the State, meaning your City or County government can also claim reimbursement. So if you are a City of County employee, your employer may choose to seek reimbursement for money they spent on your health care providers.
Other Liens, Subrogations and Recapture Attempts
Balance billing occurs when a hospital or ambulance (and in some cases a health care provider other than a hospital or ambulance) accepts your health insurance and then wants to be paid for the write-off amount. Currently, in Arizona, providers are prohibited from billing you beyond what your health insurance allows if you are in-network with that provider. This is a consumer protection for you so that you know the policy you bought means what it says when it claims to get you a reduced bill. After all, that is one of the major reasons why we buy health insurance.
If you are out of network, Arizona law has less protection for you. If you get a surprise bill, the Arizona Insurance Commissioner has a complaint process for surprise bills incurred after January 1, 2019.
The contract that protects you may or may not protect the person that caused the harm. If not, then the health care provider may attempt to get the balance from that person and if so, this will reduce your injury compensation. So in a round about way, this becomes your concern and it interferes with your recovery after a collision.
Balance billing does not apply to your underinsured motorist funds. It does not apply if AHCCCS paid your bills. It may also not apply if Tricare paid your bills. It does not apply if Medicare paid your bills. It might not not apply if your health insurance contract prohibits it.
In some cases, a child support lien is recorded and sent to the attorney handling your injury claim. This lien is obviously not directly related to your injury, but it is enforceable and will need to be paid.
Workers’ compensation is entitled to some repayment of your injury claim for what they paid for your treatment. They are generally limited to the liability amount, and not to your underinsured coverage. More importantly, WC is entitled to an offset for future treatment and wage replacement. So let us take the example of an Emergency Room visit for $5,000 that WC pays. The driver has Arizona minimum insurance of $15,000. You collect this and pay the ER and think that you have $10,000 left over (minus what it cost you to make the claim). If you need a treatment in the future, WC will not pay the first $10,000 towards the treatment. The calculations can get even more complex when figuring in the credit WC receives towards wage replacement payments.
Some liens are bogus. They are asserted by providers or insurers who don’t know Arizona law. Some are from opportunists.
Many of the legitimate claims are negotiable. Some are not.
Your attorney must know the difference in order to better serve you.
A Jury is supposed to compensate you for the full value of your claim. They will not be told if you have health insurance or not and they will be instructed to not speculate about such issues. They will not be told if you have to repay your insurance. If a Jury follows the instructions and awards what is fair, then the issue of having health insurance benefits you, the injured person, and does not benefit the wrongdoer.
This may be why an ordinary straight forward claim still needs an experienced Arizona injury attorney. The Law Office of Eric Post, P.L.L.C., will take your claim all the way to the end, including resolving the liens, to your best interest.