Posts Tagged ‘medical malpractice caps’

Pursuing an Injury Claim as a Medicare Beneficiary; so what’s the big deal?

Wednesday, June 16th, 2010

Potential clients come to our office seeking information about different types of injury claims – primarily medical malpractice cases, which often sadly include a catastrophic injury or death of a loved one.  After listening to the family or injured victim tell their story and taking pages upon pages of detailed notes, we then start to ask questions.  One of the first questions we ask is:  ”Are you on Medicare, Medicaid, or do you receive any other type of government benefits?” Sound shallow or irrelevant to the conversation? We can assure you that question is asked with the potential client’s best interests in mind. It also allows our attorneys to offer some initial guidance and cautions to the prospective client – all before putting pen to paper to sign our contract for representation (the contingent fee agreement).

There are many rules, regulations, and procedures that are in place for individuals (we’ll call them ‘claimants’ – although I am not crazy about that word, it will make it easier to remember for purposes of this article) who are making what are called ‘third-party claims’ (pursuing an insurance company, person, or other entity for compensation) and have Medicaid or Medicare coverage.  In addition to issues for those receiving Medicare or Medicaid benefits come concerns for claimants who are receiving benefits through Supplemental Security Income (SSI) or Social Security Disability (SSD).  We could fill an entire book with all of the ramifications involved with the different types of benefits one could experience when making a third party claim.  For present purposes, we will focus on what we see as the most common type of coverage that causes our ‘legal antenna’ to be activated: Medicare.

Let’s start at the end and work our way back to the beginning of a personal injury claim that involves Medicare coverage/payments.  I say ‘work our way back’ because I cannot tell you how many clients have rightfully asked me the question when their case settles: “When do I get my money?”  The seemingly obvious point in time is immediately after the case settles; however, that would not be correct.  I call this time “the beginning of the case after the case”.  Whenever an attorney represents a Medicare beneficiary and settles their case, the lawyer/law firm is required by law to hold the settlement funds in trust until Medicare is reimbursed the amount of their lien. The lien is the amount of the related medical expenses paid over the course of one ‘s injury claim by Medicare.  While our lawyers take steps throughout the process to submit information to Medicare early and throughout the process to minimize the payout time delay, Medicare does not give a final lien amount for reimbursement until after a case is resolved through settlement or trial. This final lien amount usually takes quite a bit of time to obtain from Medicare and can only be obtained once the case is settled. How much time does it take?  It can take months, although I have seen it (albeit rarely in present time) to take more than a year, and that was with diligent follow-up through letters and phone calls.

Why does it take so long?  Well, we could write yet another entire book on that topic as well. Suffice to say that we believe Medicare has gotten better over the last few years and has really worked diligently to streamline the process.  What clients need to keep in mind (and we as layers do too for that matter) is that Medicare is really given a daunting task: to file, document, maintain, itemize, and finalize files on every claimant in the Unites States making an injury claim where Medicare is involved, I mean, think about it.  That’s A LOT of people and a lot of work.  On top of all of this, you have the appeals process and also have to factor in what a difficult job it is for Medicare to have to ‘figure out’ what treatment paid by Medicare is causally related to the injury claim.  Heck, even the doctors cannot do this sometimes.  How is a claims representative without a medical license sitting in an office somewhere a thousand miles away from the treatment site supposed to do this?! … but I digress.

Our lawyers always try to have our prospective clients understand that when their claim involves Medicare is involved, there is going to be a delay – plain and simple; it is the nature of the beast. What we sometimes have to explain to prospective clients is that it will sometimes not be feasible for a law firm to represent them in a personal injury claim where there is a substantial Medicare lien and the claimant is in a jurisdiction (such as Maryland, Virginia and a host of other jurisdicitons) where there is a cap on the amount of monetary damages one can receive.  A good illustration of this scenario is featured in a prior blog by Brian Nash.  Check it out.

Thinking about ignoring or not paying Medicare back?  Not a good idea.  There are serious civil penalties for not reimbursing Medicare the amount that they are owed.  These penalties extend to the claimants and the lawyers who represent them.  Again, we cannot stress the importance of being 100% in compliance with the Medicare reporting and reimbursement system that is in place.  Medicare also has a system in place for those who think that the law does not apply to them.  You do NOT want to be in that group of people.

So, moving back from the end to the beginning of a claim where Medicare is involved, don’t be surprised if a lawyer tells you that you have a case, or may have a case, but elects not to take your claim.  At our office, we look at a variety of factors when determining whether or not to invest the tens of thousands (and sometimes hundreds of thousands) of dollars needed to vigorously pursue a claim. The reality of a Medicare lien can substantially affect what you can receive in net recovery – the amount you receive after fees, costs and lien reimbursement. As lawyers, we have to look at both the best and worst case scenarios when it comes to the probabilities of recovery, as well as everything in between, when determining which cases are feasible to pursue.  Are there claimants out there who have legitimate cases that come to us that we regrettably have to decline?  Absolutely. Frankly, that is one of the hardest decisions we have to make at times.

If you are someone who believes you have a claim for injuries caused by the negligence of another person and you are receiving benefits through SSI, Medicare, SSD or Medicaid, you simply must discuss with the lawyer with whom you are meeting what this means to you and your potential recovery. Since you can not ignore it, you should deal with it early in the process.

Edited by: Brian Nash

Malpractice Reform — New England Journal of Medicine – New Alternatives Analyzed

Friday, April 2nd, 2010

There is a thought-provoking article in the New England Journal of Medicine entitled “Malpractice Reform — Opportunities for Leadership by Health Care Institutions and Liability Insurers,” which was posted online on March 31, 2010.  In essence, the authors suggest that health care institutions and insurers not wait for national tort reform legislation (“a political gridlock”) but rather become leaders in the development of alternative methods for “providing compensation for medical injuries.”

While the concept is somewhat intriguing, the methods discussed are in many instances nothing but a privatization of tort reform at its worst. Each “alternative method” will be examined seriatim.  

The overall concept seems to be rooted in what is commonly referred to as the “disclosure-and-offer” approach.  Three models are discussed: the reimbursement model, the early-settlement model and health courts.

Please refer to the article itself for a more thorough description of these models.  The length of this blog is concerning enough.

In essence, with the “reimbursement model, institutions offer to (as the name denotes) reimburse patients for some out-of-pocket expenses related to the injury and for “loss of time.”  Typically, there are pre-determined limits for each category,which often are $25,000 for expenses and $5,000 for loss of time. Clear cases of negligence, fatal injuries, cases that are the subject of a lawsuit or where an attorney is invovled are excluded from the program.  There is no investigation into “possible provider negligence” in this matters. Patients who accept money do not waive their right to sue.

As a general comment, this plan makes the most sense but does not really deal with the infamously named “malpractice crisis” to any large extent.  First, most cases of medical malpractice that make their way to the courthouse could not conceivably fall within these financial parameters.  If a malpractice lawyer takes on a case with $30,000 in special damages (economic losses such as medical bills and lost wages), that lawyer needs to reassess their intake procedures. Given the economics of costs of litigation (not fees), mandatory reimbursements such as Medicare and Medicaid, liens from private insurers and the like, it would be foolhardy for a lawyer to become involved in such matters since the client’s net recovery would be non-existent.  What does make sense, however, is no-fault reimbursement to patients with minor, non-permanent injuries as a sign of goodwill by the providers of health care.  In that respect, the “reimbursement model” is a good program – given its express limitations.

Another major defect in this “reimbursement model” is the premise that there is no “investigation into possible provider negligence.”  If I am reading this correctly (none of the hospitals with which I am familiar in our geographical area have such plans presently; therefore, I am not certain how this works), the risk manager or claims person simply decides to write-off the loss as potentially a cost-savings measure.  One of the positive features of our current litigation system (when meritorious cases are brought) is that it does serve to correct errors in the health care delivery system.  When a major injury case is brought, many valuable lessons are learned by providers of health care.  Whether there is a “system problem” or just a dangerous method of practice at play, people do (unless they are completely arrogant and/or dense) learn lessons so that other patients do not suffer the same harm. One of the goals of the medical profession in analyzing, handing and resolving cases of medical errors is to identify problems and take steps to correct those problems for future injury avoidance.  An entire essay, rather than a blog, could be devoted (and maybe will be) to this concept of the health care industry policing itself through conscientious, rigorous self-appraisal and correction when wrongs are identified.

The “early-settlement” model is described in the NEJM article as follows: “no preset limits on compensation,” but compensation is not offered unless the institution, “after an expedited investigation, determines that the care was inappropriate.”  Offers may include compensation for all elements of damage – economic as well as non-economic (e.g. pain and suffering) damages.  To accept the money, the patient must agree that such payment constitutes a “final settlement” – thus obviating the bringing of a lawsuit.

More research into this ‘early-settlement” model is called for since the NEJM article does not go into other critical details associated with such an approach.  Since the model was “pioneered by the self-insured University of Michigan Health System,” I intend to devote a separate writing to this program once more research on its possible limitations and efficacy has been accomplished.

Suffice it to say for the present that if such a model precludes attorney involvement, then this is a fatal flaw.  The reason individuals come to a lawyer when tragedy occurs in the medical context is because those of us who specialize in this area of law know and understand (1) what  proper claims should be made and (2) what the fair and reasonable parameters of just compensation are for the victims of medical malpractice.  Sure, one can take a jaded approach and scoff – “All the lawyer wants is a fee and that’s why you are against this model”  Simply not so.  A substantially reduced fee arrangement may well be in order in such instances.  If the client is at least properly represented and the case is handled expeditiously and the compensation is fair and reasonable, then I for one believe that a reduced fee is in order which would further benefit the patient/client.

That’s not the full story, however, when it comes to discussing this so-called model.

In our current system of medical malpractice litigation, the system would work a whole lot better and be much less expensive and be much more efficient if these same principles were applied to the current claims handling practices of insurers and self-insured health care providers.

One of the largest drawbacks  for both the health care system and for the patient/client are the costs associated with medical malpractice litigation.  I recently wrote a blog regarding the issue of costs and their effect on the so-called malpractice crisis.  When clear-cut cases of medical negligence exist and are ignored or denied by risk management or insurance claims  personnel, the costs sky-rocket.  The health care insurer or provider hires counsel at an hourly rate to defend the case.  Discovery in the form of record production, depositions and the like proceed with sickening and dollar-wasting frustration for the plaintiff lawyers and their clients.  Cases slog along unmercifully through the system for months if not years. If you have a clue what you are doing as an experienced medical malpractice lawyer, you have a pretty good sense of what cases have merit and which do not.  Of course, no one is infallible, but for the most part, “good cases almost try themselves.”

Applying the principles of the “early settlement” model to what exists in today’s world of medical malpractice, I suspect that nationally, on an annual basis, billions of dollars would be saved in ridding our system of the needless waste of money in defending cases that should have been resolved early in the process.  Why not take the principles of this model and apply them to what exists in the current system?  That’s what the health insurance industry should have been doing years before now.  Did they need a new “model” to tell them that? If insurers took a more responsible approach by fairly and honestly assessing these cases and did so in an “expeditious” fashion, our courts would not be clogged with needless litigation, the health care industry would save enormous amounts of money, and – most important – patients would be justly and timely compensated.  If only the public knew just how much waste there is in our current system due to the lack of due diligence and timely claims handling, they would perhaps have a more balanced approach to this ‘discussion’ of tort reform.

Institutions and insurers that are responsible in their claims handling practice are not the problem.  Fortunately, in my work for  years as a defense lawyer, I had the privilege of working for one such organization. Unfortunately, they are not in the majority.  I would love to see figures of defense costs (fees and expenses) on those cases that are ultimately settled or unsuccessfully defended.  I have zero doubt that those numbers are staggering.  If those fees and costs were substantially reduced through conscientious and timely claims handling, we might well not be having this discussion of tort reform in the first place.  When critics say blame the plaintiff lawyers – they may have half the phrase right – just not the right adjective.  A fuller discussion of the abject waste due to poor claims handling and delaying tactics by the defense bar is the subject for future consideration.

Finally, the infamous option of the ‘health courts.’  Succinctly stated (in the interest of relative blog-brevity), the essentials are described in part as follows:

A panel of experts, aided by decision guidelines,determines whether the injury was avoidable — a determination that turns on whether the injury would ordinarily have occurred if the care had been provided by the best specialist or an optimal health care system; the avoidability standard is more generous than the negligence standard. For avoidable injuries, the institutionoffers full recompense for economic losses plus an amount for pain and suffering according to a predetermined compensation schedule that is based on injury severity.

Various alternatives for this model are discussed in the NEJM article and include items such as making the program voluntary, permitting limited appeals to some extent and so on.  As one reads further, however, repugnant elements start rearing their ugly heads.  Just some of these components of the ‘health court’ system proposal are (1) waivers of the right to file a lawsuit “as a contractual condition of receiving care,” (2) so-called “decision guidelines,”  and (3) “predetermined compensation schedules.”

Waivers of right to a jury trial as a condition to receiving care screams “void for being against public policy.”  Who is advising a patient in need of care what his or her rights are when signing a waiver. Can’t you just picture the following scenario?  Mr. Jones is clutching his chest in the ED and before care is rendered he’s asked, “Would you like to receive care here?  If so, you will need to sign this waiver form.”

Predetermined schedules of compensation?  Is this a euphemism for contractually created caps?

The NEJM article raises some valid issues and concerns. A great deal more thought of how to fix the system is warranted.  The answer may well  lie in the underlying approach being advocated in the article – malpractice reform should be self-initiating for health care institutions and liability insurers.  They should take a leadership role and not sit passively on the sideline shouting the same old song – “We need caps….Our system is about to crumble…It’s all the fault of the greedy plaintiff lawyers!”  Maybe a new model is in order – grab a mirror and examine how to better police your own claims-handling practices.  Stop wasting everyone’s time and money through poor claims practices.  Expeditiously and honestly assess claims.  Offer fair compensation early in the process.  Maybe if the health care and insurance industries tried fixing their own practices in the framework of the current system of civil justice, these endless calls for restricting injured patient’s rights might stop and the so-called crisis just might be averted.  Ever consider working with the plaintiff malpractice bar….or is just a lot easier blaming them?

Georgia Supreme Court Overturns Malpractice Cap

Monday, March 22nd, 2010

In a unanimous decision, the Georgia Supreme Court has just declared non-economic damages caps unconstitutional in medical malpractice cases.  CBSAtlanta.com reports the following:  

Monday, the Georgia Supreme Court ruled that a controversial law capping the amount of money an injured patient could recover from a negligent medical provider is unconstitutional. The 7-0 decision was written by Justice Hunstein. Senate Bill 3, enacted in 2005, stated that a victim of medical malpractice could be limited in the amount of damages they can receive from a jury verdict, even if the harm caused was catastrophic in nature.

Nestlehutt v. Atlanta Oculoplastic Surgery, P.C, from Fulton County State Court, highlighted how caps on damages fundamentally restrict the constitutional rights of those who have been harmed by a healthcare provider. The malpractice case was brought by plaintiff Betty Nestlehutt, who is represented by attorneys Adam Malone and Frank Ilardi.

This case is one of horrific physical injuries and pain and suffering.  The tragic story of the victim, Betty Nestelhutt, is recounted in the article:

Betty Nestlehutt and her husband of more than 50 years worked together in their real estate business. Betty handled most of the client interaction for the firm, and she eventually noticed that many potential customers were going to younger agents. Concerned with the bags under her eyes and lines around her mouth, Betty Nestlehutt eventually decided to schedule a consultation with Dr. Harvey P. Cole of Atlanta Oculoplastic Surgery, P.C. Even though Betty was 71 at the time, Dr. Cole recommended a full facelift as well as a battery of other surgical procedures.

The combination of procedures was risky for someone of Betty’s age. The surgery severely impacted the blood flow to her face. After several weeks, the skin on Betty Nestlehutt’s face began to die and fall off.

“Betty Nestlehutt was the face of her real estate business,” Malone said. “Her face was so horrifically disfigured that she was no longer able to even leave her house. The pain she experienced over a long period of time is difficult to comprehend. Photographs of her disfigurement are too gruesome for public distribution. The damage is permanent.”

The case outcome has also just been announced on the website for GeorgiaWatch, a consumer advocacy organization:

The case was heard in Fulton State Court before a jury of 12 citizens. After hearing the testimony and seeing the evidence, they returned a verdict in favor of the Nestlehutts. The jury granted recovery for past and future medical expenses and concluded that the severe impact to Betty Nestlehutt’s quality of life warranted $900,000 in “non-economic” damages. However, this was more than the $350,000 cap on noneconomic damages in the 2005 law, which overrides the judgment of a jury that has been presented with the facts.

Judge Diane Bessen ruled that the statute capping a jury’s verdict was unconstitutional. The decision was appealed by the defendants to the Georgia Supreme Court. After hearing arguments in the fall of 2009, the Supreme Court agreed with Judge Bessen and ruled the statute unconstitutional.

We applaud Mr. Malone and Mr. Ilardi’s efforts in this case as well as the Court’s ruling.

UPDATE: In response to this ruling, Dr. J. James Rohack, AMA President, posted his reaction on the AMA’s website.

“The action puts Georgia’s patients at risk for the severe access problems suffered prior to 2005 when the state’s unrestrained legal system pushed premiums to record highs and forced physicians to limit services, retire early, or move to other states where liability premiums were more stable.”

“The AMA continues to vigorously support strong, proven medical liability reforms at the state and federal levels to keep physicians caring for patients, while still allowing patients their day in court.”

Who is he kidding?  By putting unreasonable ‘caps’ on damages and creating standards such as “gross negligence” for cases against emergency room healthcare providers, this goes to “allowing patients their day in court”?  I’m sure the AMA is driven by altruistic motives to make such a ridiculous statement.