Whose Workers’ Compensation or Personal Injury Claim Is It?
Workers’ compensation and personal injury claimants are often contacted by medical providers, insurance companies, employee benefit plans, government health plans, and government agencies claiming some (or even all) of their recovery. Third-party lien collection companies like The Rawlings Group and Praxis have become increasingly common and aggressive in inserting themselves into workers’ compensation and personal injury cases. Sometimes these claims are not legitimate. Sometimes they have the force of law behind them. Even legitimate claims may have very different legal rights controlling the amount they can take and how they can take it. Some may have the right to recover directly out of your recovery before you get paid. Some may have a contractual claim against you like any other creditor. Some may have no legitimate right at all. Our experienced workers’ compensation and personal injury attorneys evaluate the claims of third parties, determine their legal rights, if any, and work with you to avoid bogus claims and manage the legitimate claims.
Third parties that may have a legal right to claim a lien on your settlement or judgment include:
- Self-funded health insurance plans through your employer (ERISA Health Plans)
- Unpaid health care providers
- Ambulance service
- Medicaid
- Medicare
- Teacher and State Employees’ Health Plan
- NC Health Choice for Children Plans
- TRICARE
- NC Workers’ Compensation
- Vocational Rehabilitation
- Child Support
In cases where a third party has a legitimate, enforceable lien on your personal injury or workers’ compensation recovery, your attorney is required to pay the lien directly out of the settlement proceeds. In the case of a valid ERISA lien, a self-funded employee health plan has the legal authority to recover 100% of its benefit payments related to an injury even if that results in taking the entire settlement. No plaintiff or attorney wants to litigate a claim only to have a health plan take all the money. In a case where a self-funded ERISA plan has paid a lot of medical expenses, the lien needs to be negotiated with the health plan in advance to determine whether or not the lien claim can be reduced to a level that makes pursuing your claim worthwhile.
Most of the liens created by statute, unlike an ERISA lien, do not allow the lienholder to take the whole settlement. Many lienholders will negotiate the lien amount to make it worthwhile for a plaintiff to pursue the workers’ compensation or personal injury claim. However, it is essential to identify legally valid liens early and work out agreements before investing substantial time and money into litigation or finalizing a settlement. After a settlement is completed, the lienholder may have little incentive to compromise.
In North Carolina, we have an “anti-subrogation” rule that prohibits life, accident, and health insurance forms from containing subrogation of benefits provisions. This rule does not apply to a self-funded ERISA plan or Medicare, which are controlled by federal law. It is also inapplicable to the other third parties listed above who have special statutes giving them lien rights. However, it does apply to most other private life, accident, and health insurance policies in North Carolina. Where it applies, the insurance company may have no legitimate right of recovery. The legal issues are complex and it can be hard to tell a legitimate lien claim from a bogus one. At Hill Evans, our attorneys will help you deal with the claims of third parties to protect your interests and maximize your recovery.
Let Hill, Evans, Jordan, & Beatty help you navigate your Workers’ Compensation and Personal Injury claims to reach the best possible solution. Schedule your free consultation today.