Getting a Recovery for Your Injuries; the ERISA Healthcare Lien

The injured client’s attorney has two jobs.

First, he must obtain the best monetary recovery possible based on the facts and the law.

Second, he has to get as much as possible of the settlement into the client’s hands.  He has to either fight or negotiate liens.  Such liens include Medicare, Medicaid, Public Assistance, workers’ compensation, and private health insurance.

Once an injured client gets a settlement, governments and insurance companies swarm around the money like a flock of buzzards over a dead animal.  These liens pick away at the settlement.  Sometimes, the lien holders seek to leave nothing to the client.

The unfairness of liens, particularly healthcare insurer liens under the ERISA law, is discussed in Professor Roger M. Baron’s excellent law review article, “The Revictimization of Personal Injury Victims by ERISA Subrogation Liens,” 45 Creighton Law Review 325 (2012).

Professor Baron is correct.  The injured client is “revictimized” by the healthcare insurer’s lien.  The health insurer has done nothing to get the recovery, but it stands ready to take money out of the client’s hands.  Sometimes it wants the entire settlement. 

There is hope.  Public Justice, the public interest law firm, took-up the injured clients’ cause in the recent case of US Airways, Inc. v. McCutchen,  663 F.3d 671 (3d Cir. 2011).  In this case the injured client’s health insurer sought the entire net settlement to pay-back its alleged lien.  The client, who was very seriously injured, would have received nothing!  The court ruled that this is inequitable, and the trial court must hold a hearing as to whether the health insurer is entitled to any share of the net settlement.

We see the McCutchen case as a first victory on the war on liens.

Mark E. Seitelman, 3/21/12,


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