I get asked a lot to help other lawyers on both sides of the docket figure out, do I really have to pay the subrogation interest on this lien because you know, when you’re client is not getting any money, it’s an impediment to settlement that hurts both sides of the docket. And I get asked this question a lot and there’s is really no one answer but I have developed 8 rules that will help give you some guidance, some frame work, so that you can try to analyze that question; does the client really have to pay the subrogation interest or lien.
I want to start with an overview of what was well was house bill 1869, it’s now a chapter 140 Civil practice and Remedies Code, a subrogation reform act that took effect Jan 1st, 2014 and just by a show of hands, I want to know how many of you all feel like you have already got a pretty good handle on what that law did or does? Haha! I promise you, I am not going to call on you if you raise your hand, okay! And there is a one kind of halfhearted—two kind of halfhearted hands. So turn to pages—start page 15 of the paper if you want to look at the materials and we’ll go through those briefly and then as the talk progresses, I will try to kind of weave into the presentation, how this act does and does not apply to cases you may have.
First of all the act applies or regulates insurance and keep in mind TX has the right to regulate insurance that’s why we have something called TDI (The Texas Dept. of Insurance) and the legislature, so plans that TX can regulate such as private health insurance, your Obama care individual plans, your employer’s sponsored plans that are insured even ERISA plans that are insured, your occupational injury plans as in worker’s complite, hurt on the job but the employer didn’t have real worker’s compensation, that have got an occupational injury plan TX is one of the only states that allows that.
All of these are going to be regulated by chapter 140, Civil Practice and remedies code effective Jan 1st, 2014. The things that are excluded from state regulation are things that TX can’t regulate like Medicare, self-funded ERISA plans. A self-funded ERISA plan is not subject to state regulation and we’ll talk about the distinction between an insured ERISA plan and self-funded ERISA plan in a couple of minutes. I don’t want your eyes to glaze over yet so. we won’t get there quite yet.
Medicate has its own federal state regulatory system chips and worker’s compensation which is regulated by the state but in a different system. All of those are excluded but all the plans included are like I mentioned, private health insurance, employer’s sponsored health insurance and there are some self-funded plans that are governmental within the state of TX. So if you work for a local Govt., if you work for the state of TX and you have what you think of is health insurance but is really a self-funded plan, those are subject to state regulation in Chapter 140 applies.
So what good does this chapter 140 do; The benefits of chapter 140 is a plan can no longer say and actually carry out we’re going to take all the money, if your injured person gets run over and gets hurt real bad. If there is not enough money to go around, the most the plan can take if it’s regulate able by chapter 140 is 50% of the recovery and for all of us in the room, if the injured person is represented by an attorney which is when we are likely to be involved, the plan has to bear its prorate share of the recovery expenses which means basically a third a third a third division and plaintiffs are insured of getting some money.
One of some nice things about chapter 140 is it says you know if the injured plaintiff has multiple plans like a health insurance and disability insurance may be if it is a child and there is health insurance through the mom’s policy and the dad’s policy then all of those plans are competing with each other for their one third. But they can’t encroach on the injured person’s share. Another thing about chapter 140 and I am on page 16 in the section of section on section 140005 an innocuous little phrase.
“If the injured plaintiff can recover for past medical bills subrogation is allowed.”
The flip side of that becomes very important though and here’s where we start learning some of the rules before you hand over money to a plan that may not be entitled to it as in before you commit malpractice. The first rule is; learn who is the plaintiff in relationship to the subrogation interest or lien that is being asserted? Now, obviously if the only person that is the injured plaintiff is an adult, the person with the health insurance, chances are subrogation will attach if the plan did it right.
But if you’re representing a child, if you are representing a spouse of an injured person, if you’re representing the family of somebody who died, all of those are different kinds of claimants and the rules will be different for each and every one of those scenarios and often you can shield the recovery and make it completely free of subrogation.
So, if you’ve got child and you’ve got cases like I got where there’s $30,000 available bill and more than $30,000 of bills or big chunk of bills, how do you shield the recovery? That is a pretty easy answer. When you sign up the case, if you can figure out, there is a not going to be enough money to go around. You sign up the parents not individually and as next friends, you sign them up only as next friends because who has which cause of action is going to dictate who gets money that is subject to a subrogation interest. In TX, 5 year old kids are not legally responsible for their own medical bills. The parents have an obligation to support them and pay medical bills and so it’s a parental recovery for past medical bills to which the subrogation interest attaches.
The child’s recovery is for paying impairment, medical bills that may have after they turn 18 but they don’t recover in their own right for past medical expenses. So if there is not enough money to go round, you sign up the child’s rights, the parents as next friends and to be strategic and consistent in your discovery responses, in your demand letter, in your pleadings, that all your doing is presenting the child’s damages.
Same thing for an estate, keep in mind if there is a death and poor guy lingered a bit before he died so he has medical expenses, the survival action of his estate is for the medical expenses incurred prior to death and the wrongful death cause of action is for the family member’s lost relationship. There’s no medical bills associated with that lost relationship unless grieving spouse and kids go get psychiatric or counseling treatment but the lost relationship is not part—is not burdened by the past medical expenses.
So again, if you can tell and it’s hard to do but if you are clairvoyant enough to be able to tell in advance or when you start developing your discovery that there’s not going to be enough money to go around, sign up only the wrongful death cause of action, plead and prove up only the wrongful death cause of action. Do not ever bring the claim for the survival estate cause of action and then you have a good argument that you recovered no medical bills.
There is no past medical expense recovery for the subrogation interest to attach to because it’s not even part of your damage model it cannot be. Now, you don’t hear me saying, that if you have got the injured adult employee, you can just ditch that person’s claim for medical and present only their payment suffering, physical impairment. You might try that, I don’t know that you’re going to be successful at it but 140005 says, if the person who is hurt can make a claim for past medical, the child can’t, the wrongful death beneficiaries can’t, so they really—you could not go get a Jury award on their behalf and to me that’s the distinction that, if you can’t include the medical bills in the Jury award for the cause of action you plead then you can honestly with integrity say “I didn’t recover it”. In chapter 140 we will back you up on the middle folks in the picture, the husband and wife, if one of them is hurt, the hurt one has their claim for bodily injury including past medical and the non-injured spouse has a loss of consortium claim. Again if that non-injured spouse didn’t go to physiatrist or counselor, there is not medical bills, their recovery is only for impaired relationship and they have a loss of consortium claim that is arguably not burdened by the subrogation interest, in fact that’s one of the lessons of ACS Vs. Griffin.
Good lawyer in Dallas try the case, injured husband, wife had a loss or consortium claim, the main argument in ACS vs. Griffin and I want to point this out was the injured person put their own recovery in a special needs trust and said King X subrogation interest can’t attach to the recovery because it’s not in my possession and the trial court said “you know under ERISA and we will talk about that in a minute, that sounds right, The 5th circuit said, why that was brilliant, Dallas plaintiff’s lawyer.
The plan ACS said, not brilliant and they got a re-hearing and on re-hearing the 5th circuit said, “why you scoundrel, trying the rip off the plan?” and completely reversed themselves.
So is this easy? No but ACS vs. Griffin, money in a special needs trust, the subrogation interest or ERISA Lien still attaches to that, however in that case both at the trial court level and at the 5th circuit, the courts agreed, the wife’s loss of consortium claim had no medical expense recovery to it and was not burdened by the husband subrogation interest.
Now ethics credit, by the time it got to the 5th circuit she was the ex-wife huh, so if you’re going to sign up both the husband and the wife in try to divide it creatively, make sure you have a conflict’s waiver in your plan, in your attorney-client contract because some times during the course of litigation people get divorced and you don’t want to handover a whole bunch of money to the non-injured spouse thinking that that shelters well it does for her or him but not for the injured person, so make sure you know who’s going to end up with the money and that everybody is happy with it.
The second rule, who is the employer through which the health plan arises? Actually I want to back up, I want to talk about the kids for just a second more. I want to flag in the paper, pages 42-44. There is specific language in there about representing kids and there is language that courts have adopted saying “parents can’t just throw away the substantive rights of their children.” Well I think if the parents enter into a health plan agreement that says “I am going to put my child last. I am going to give the health plan the right to come get all my child’s money”. I think that throws way the substantive right of the child. I don’t know how the court will address that but I want you to be aware of those cases, if you are representing kids, if you are the add line for a child, if you are the defense the attorney and the person that is injured is a child, with or without a plaintiff’s attorney representing them. Keep in mind there are ways to shelter the recovery for the child and that should be done.
Okay. Rule number 2; who is the employer through which the health plan arises, like I said earlier if it is private industry, if it’s private Obama care type individual plan, if there’s subrogation language in there and if subrogated language is right, there will be a subrogation interest. If it is state or local Govt. those plans are never ERISA. ERISA excludes Governmental plans from its reach and so State law will regulate chapter 140 will regulate and protect those recoveries. A lot of church plans are not ERISA and when I say church and that’s first united Methodist in the picture, churches are not always just where you show up at 11’o clock Sunday morning. They have day cares, they sometimes own hospitals, so if you’ve got an employee of church day care, church building, church hospital, look it whether or not those are ERISA plans and try to bring them within chapter 140.
So I’ve talked a little bit about the difference between an insured ERISA plan which is regulate able by the state of TX and a self-funded ERISA plan which is not. Again, I am going to ask, so I know how to allocate my time.
How many of you feel like you got a pretty good hand alarm what the difference between those two is and how to recognize them?
Okay! We’ll talk about it. Let’s divide this room down the middle. All of you on your left hand side, you work for Mom and Papa industries a small business. All of you on the right hand side, I am sorry you work for Wal-Mart. Your right just went down. [Audience laughing] Wal-Mart employees and big companies like you know Microsoft, US Airways, they take their premium dollars and they pool them and they form a trust or some kind of plan and they may hire Edna or Blue Cross to manage the money that the pool owns but if one of you gets run over and gets hurt real bad, it’s the plan’s money, the employer and employee can contributions at risk. It’s not Blue Cross that’s going to not make a profit that year because Blue Cross isn’t spending Blue Cross’s money, it’s just managing your money.
An insured plan is y’all are all are shipping your premium dollars off to Blue Cross and if one of you get hurt real bad, Blue Cross is going to take a hickey. Okay, that’s my real sophisticated definition, it’s hard to tell the difference because your subrogation letters maybe coming from Blue Cross and the language is going to go “we are ERISA, we trump”. You have to find out “no, are you ERISA insured?” chapter 140 still regulates or ERISA self-funded. God help you.
So with that back drop, there are some ideas for ERISA plans and I am saying ERISA whether its self-funded or insured and then we will talk more about some ERISA self-funded ideas.
First of all, get the plan. You don’t know how many times somebody’s written to me and said “I have got this ERISA plan, do I have to pay it back?”
I say “well, show me the plan language”. “Oh! I don’t have the plan language”. We didn’t read out the instructions, the plan language—there is a lot from plan to plan and a lot of times you can find things in there to exploit and use to your client’s advantage.
Second, get the summary plan description. ERISA plans have to have two documents, the plan which can be legally is and the summary plan description which is supposed to be kind of the reader’s digest, easy to understand, plain English version. Now, there can be conflicts and the ambiguities between the two, so read both and see which one is better for your client. Some of them have gotten just two cues by half. We half one document and we are going to name it, plan and summary plan description. See? no more catch 22, you can’t use that against us because it’s all one document and courts have said actually no it serves to different purposes so when we are reading it as a plan, we are going to read it and construe it in one way and when we’re reading it as the SPD, we may apply different statutory in contractual principles to how we interpret it.
So get the documents and find out are there some ambiguities and in the paper, I discuss a number of things I’ve seen in plans. Some of them say
“If the participant gets hurt, we get all of the participant’s money”
And participant is defined as an employee. Well you know if it’s the participant’s spouse that gets hurt, then they will say
“and we get all the spouse’s money too”
So you know they don’t get any money because they didn’t identify the right person. Sometimes they say if the third party recovery is not enough to take care of you we don’t care we get it all but what if you’ve got a first party recovery. Those are different.
Now as these glitches get identified by the courts plans tend to clean them up but not always. Some of them say “if your verdict award you fault, we get all the money no matter what”. Okay, what if you have a settlement and there is no verdict. Huh, then there is no right of recovery by the plan. So, analyze with some scrutiny and read some of the examples. I don’t come across them on all that often but when I do, it is sweet.
One example, US Airways Vs. McKetchen; went all the way to the US Supreme Court. US Airways wouldn’t handover one of the documents and I don’t remember if it’s the plan or the SPD but they didn’t give it to the plaintiff even though the plaintiff had been asking, asking, asking until right before the Supreme Court hearing and turns out, one of the documents said “we get the UM UIM money in addition to the third party liability and one of them one so clear. There was an ambiguity so the US Supreme court said, “we are going to send it back to the trial court. Let the trial court scrutinize the language”. Trial court went “you know there is a conflict between the why those tow documents read and the UIM money, there is no lien attached to it because the planned documents didn’t spell that out with specificity. So and that was the bulk of the recovery. So you have to get both documents and read them. The slides medicate but I want to talk briefly about worker’s comp. because yesterday, the First Court of Appeals in Houston handed down an opinion that [laughs], that I have to bring to your attention and it’s not in the paper because it got handed down yesterday.
It is Harris County Vs. Knapp and Aurioles; July 28th first court of appeals, so workers comp. case and not much has changed in worker’s comp. but one area where there is some litigation is “what if the worker’s comp. carrier is the Govt. Self-funded workers comp”. State of TX, some local governments instead of shipping premium dollars out they self-fund their workers comp. Insured plans have to bear pro rata share of the recovery expenses on workers comp. if there is no worker’s comp. attorney actively assisting the plaintiff’s attorney in obtaining the recovery and most of the times they just sit with their hands out and don’t actively assist so they have to bear their pro rata share of the recovery expenses.
The self-funded governmental plans lately have been saying, “oh you know we are immune from liability so you can’t sue us to make us bear our pro rata share so we get a free ride”. We are the state, we’re the govt. we’re here to help, no we are here to take a free ride and there are cases Manback, it’s in the paper. 3rd court of appeals here in Houston has bought into that argument. Now there is an unpublished opinion Parrent but it’s in the paper, Parrent; that talks about how to calculate this pro rata sharing of expenses until you take the attorney fee off the top of you or take the subrogation interest out first and then start calculating attorney’s fees.
Well yesterday in Harris County vs. Knapp and Aurioles, the first court of appeal said something completely different than what any of the other lines of the cases said and that is
“now the State has to bear its pro rata share, Govt. immunity has nothing to do with this, State didn’t get a free ride but you take the subrogation interest off the top then the plaintiff’s lawyer gets you know there contractual share out of the plaintiff’s recovery and the Govt. also has to bear its pro rata share and pay”.
So the calculations are sent out clearly in that opinion. It’s just that that the opinion comes up with different mathematical equation than Manback or the Jill Hurs case which is another governmental one that gave the govt. a free ride and there is a different calculation than Parrent which says no the attorney fee comes off the top and then the comp. carrier also has to pay another attorney fee. So watch for somebody to take a case up to the TX Supreme Court because the court of appeals opinions are in conflict about how to do math and it may be Harris County vs. Knapp and Aurioles that goes up.
So Medicate; you all should be now all be familiar with Heidi Elburn; the poor girl who was run over hurt real bad, got $550K but that was only 1/6th of the total value of her case. Medicate said sorry about you Heidi. Actually we are not because we want all our money back and US Supreme court said “no, if Heidi’s only getting 1/6th of the total value of her case then medicates get 1/6th value of its case”. Heads up congress at the end of 2014 passed new legislation that effectively over rules all born.
It was going to go in to effect in 2014 it got pushed back to 2016, its now been pushed back to Oct 1st, 2017 and the only political thing I’ll say today is whether it gets pushed back again, may depend on how the vote comes out in November. So it also says, we are throwing all born but it doesn’t say what happens next and the states are the one who actually regulate the subrogation portion of medicate as long as they don’t violate federal law so the state legislature would probably have to pass what happens next in TX.
Last legislative session actually represented [inaudible] filed a bill and then realized whoops hah, its pre mature to do that and pulled it down, so that’s an area where my best advice is if you’ve Medicate on the case, settle it before Oct 1st 2017 and watch for new developments after that.
Medicare, and I am sorry we are getting into two small print and I know we are not supposed to do small print on slides but the slides can be downloaded and you can ready the summary.
Ah, you do have to pay past medical bills. The question has arisen over the last several years, what about your future medical bills? Do you have to create a set aside—where you take money out of it and set it aside to pay back Medicare? At first Medicare said, “we are developing new rules for how to do that in third party liability claims”. Yes, if there’s worker’s comp, you always have to do that. In third party liability claims, we are going to develop some rules, they said that in 2012 and 2014 they pulled down there notice that they are going to develop some rules and in June of 2016, they said, “Oh! We’re going to start working on these rules again”.
So what are those rules? I don’t know. My rule is if you get money for future medical bills because your settlement is big enough to pay all the damages including future medical bills then for those medicals bills that Medicare would otherwise pay for perhaps you have to do a set aside. But if you’re like some of my cases and by the way I am not a subrogation lawyer, I am a personal injury lawyer just like all of y’all. For some of my cases if there is not enough money to go around then you document. I am not collecting money for future medical bills because my settlement’s not big enough. And my rule is you don’t have to take the money you didn’t get and set it aside. If you got zero, zero is the amount you set aside and you do a good job documenting that so that your client can argue effectively with Medicare that Medicare ought to continue paying the bills. Of course you do have to pay back that medical bills, you have to pay it back out of pip if you get money for pip that Medicare paid for bills, so my advice is if you are plaintiff’s lawyer, if you are trying to preserve your pip, use it for law Sterling’s, use it for co-pays use it for deductibles, don’t submit bills that Medicare paid for unless you want to pay Medicare back out of pip. Use it up for non-Medicare expenses.
I think I said you do have to use UIM to pay back Medicare, UM to pay back Medicare. It doesn’t attach to the wrongful death cause of action, because in TX the wrongful death recovery cannot include past medical expenses. Those are for the survival claim. So again, if you got Medicare and not enough money to go around consider pleading, presenting, proving, discovery only the wrongful death cause of action.
I want to talk about rule 70.4 and I want to do that also in the context of hospital liens. 70.4 is a fairly new regulation. You may have read the Spiegel opinion. Spiegel was a hospital lien case, the injured person had Medicare, the hospital didn’t bill Medicare. The hospital said, “No, Medicare wants to be the secondary payer where the third party claim is first”. Sounds like a bad evident Costello gig. And they are right but they’re wrong.
The rules for Medicare are Medicare says, ”I don’t want to pay first”, so if within 120 days the third party claim or first party claim is going to pay, that’s the primary payer of the bills. After that 120 day window to settle the claim and most of them are not going to settle in that period of time, the provider has up to one year to bill Medicare. And then, if the provider didn’t bill Medicare within that one year, all they can charge according to rule, 70.4 which is in the paper, is the deductible and co-pay whatever the plaintiff would have owed individually had the provider billed Medicare.
Now I know a very good lawyer who represents hospitals who says, “Judy that’s just malarkey. If the hospital never bills at all, they can charge the full charge master rates. I think he’s the one that is wrong and Medicare may come out with some rules to establish that but my position and from talking to the folks at CMS, there position is if the provider never bills Medicare and more than a year goes by, their filing deadlines passes, the plaintiff only owes the co-pay and deductible.
So next rule, rule #4, what’s the source of money out of which the recovery is sought and we’ve touched on this so I am going to go through the next rules quickly. If it is third party money, chances are subrogation attaches and if it’s first party pip and the subrogated plan is insured or you have a hospital lien, the pip can’t be touched. If it’s first party UM or UIM, if it’s an insured plan or a plan that the state of TX can regulate through chapter 140, if the pip was or if the UM was paid for by the injured person or that injured person’s family, the plan cannot take the first party recovery. So, if Keith is a passenger in my car, his health insurance can subrogate to my pip but if an—I am sorry, his some his health insurance cannot subrogate to my pip but it can subrogate to my UM, UIM because we are not related. If he and I have the same health insurer, it can’t take my UM, UIM because I paid for it.
First party money, the hospital lien does not attach, child support lien does. Why? Because the statute says so, I mean it’s just get out the rules, read the rules. They are not all going to be the same and finally Medicare’s subrogation interest and this is on the page 50 of the paper does not attach to a settlement paid by an individual who is self who, who is un insured. So if I run over Keith and I don’t have any insurance and Keith is insured by Medicare and I just pay out of my pocket to Keith, Medicare can’t touch that settlement. But Keith you’d be glad to know that I have good coverage.
Dealing with hospital liens, there’s a lot of info in the paper. If the person that is injured has health insurance, the hospital has to bill it and under chapter 146; loses the right to collect anything beyond the co-pair deductible if the hospital doesn’t bill the health insurance timely and under, rule 70.4 they have the same disqualification, if they don’t bill Medicare timely in my opinion. If they are uninsured and the hospital goes, “wohoo! We get a file of being lien”, not necessarily, the lien under the property code. Chapter 55 says, the lien must be for the regular and reasonable rate.
Well the hospital will say, “oh we regularly charge everybody the charge master rate”, well they don’t regularly collect the charge master rate from anybody. They give discounts to health insurance, they give discounts to indigent people, they’re required under the affordable care act since march of 2010, if the injured person is uninsured and indigent and you know it didn’t take much to be indigent if you have got a huge hospital bill then the, the hospital can only charge one of only three rates; the lowest that they accept from any insurance plan, the Medicare rate or the average of the three, lowest.
So, if that’s what the affordable care act says, they are not regularly collecting as a reasonable amount, the charge master rate. So send them some discovery and I know you can’t see this but if you go to the website of the hospital, look at what plans they accept. If there’s 40 of them listed, send them 40 inaurogetories from plan #1, what amount would you have accepted as payment in full, if my client had health plan #1? Inaurogetory #2 what amount would you have accepted as payment in full if my client had had plan #2 on your list. Keep going down all plans with an inauguratories to match, hospital won’t want an answer, they would want to deal but first send them more (inaudible) what percentage of your indigent patients actually pay charge master rates. I’ve had them answer. Well, zero. How in the world is that your regular and reasonable rate if zero people pay it? What percentage of your insured patients actually pay full rate? Zero. What percentage of your uninsured people pay the full rate? Chances can be real small. Send them a request for admission along those same lines.
If your client is indigent—and let me skip ahead health and safety code mandates that hospitals develop criteria for determining who is medically indigent or financially indigent then again ask them “okay if my indulgent person comes in, what amount would you have charged if they were Medicare, if they had the lowest rate or average of the three and that is what your negotiations ought to be.
Got to touch on insurance companies; third party liability carriers that go behind the backs of the injured person and negotiate directly with the hospital or the providers, Geico! I am talking to you [laughs] but Geico’s not the only one where the third party liability carrier says, “hmm hospital lien we know that they can’t charge full freight, we’ll just pay a discounted rate, we’ll cut the bills out from under the plaintiff, we’ll spend most of our coverage on the hospital lien and sorry plaintiff, no more left for you” and in our rep letter and you can download the slides, this language is in there. We say, as a plaintiff’s lawyer
“I represent this person, all the bills are derivative of their claim that I am the only one authorized to negotiate”.
So if you want to give money you’ve just made a gift or you’ve tortuously interfered with my contractual relationship with my client and by the way pursuant of State Farm vs. Orives where State Farm took a $25K lien, settled for 10 cents on the dollar and said, “sorry plaintiff we just spent all our money”. Plaintiff’s lawyer says “great, I was actually the procuring cause of why you are motivated to settle because I did all the work to set it up, so you now owe me a third of $25K. Not a third of $2500 you paid, a third of the $25K that your claimant had credited for.
And the court said that’s fine.
So send that letter with as part of your letter of representation. Rule 6; if you’re going to be in front of a jury and you know the jury knows your client has health insurance, consider telling the jury that there’s health insurance and they want their money back. Now under rule 411, and a lot of local motions in limine, the defendant can’t get up there and say “you know there is health insurance”, but nothing says that the plaintiff can’t and in fact UT vs. Hinton which is in the paper says, in the proper case, “yes the plaintiff’s lawyer can say my client does have health insurance and they want their money back”. So that the jury isn’t motivated to just say well you don’t get to double tip. It’s not double tipping and you may have to educate them.
Indemnification provisions; First of all the plaintiff’s lawyer should indemnify for the deaths of their client. There are a lot of states actually have rules saying that is the conflictive interest for the plaintiff’s lawyer to do it, so defense attorneys don’t ask and what you should do in your indemnification agreements is say “we are going to make sure the plaintiff only indemnifies, if the defendant insurance company first tenders to the plaintiff”. Notice of any assorted lien after settlement and in opportunity to defend or resolve it because the last thing you want to do is to find out as a plaintiff’s lawyer, your client had defenses and we just got through talking about a lot of defenses. If you allow State Farm or Geico or All State to pay and then get its money back from your client when in fact there were defenses, you just waived them as in committed malpractice.
So require is part of the indemnification that the plaintiff give notice. Finally, if the question is does the plaintiff’s lawyer or the defense lawyer or the third party liability insurance company have an obligation to make sure subrogation interest gets re-paid. Case law is not uniform on this, but lately in the last year or year and a half there have been some opinions they talk about attorney immunity as long as the attorney gives the money out as part of their duties to their client, they are immune. Now, watch out! There is some older case law to the contrary and in the seventh Federal district court of appeals, a lawyer that tried that, distributed the money, the plan brought him up on contempt and the seventh court said, “this argument that you didn’t really collect for past medical bills is contumacious effrontery, it is nonsense and we’re going to consider jailing you. Jailing you! If you don’t pay back that $180,000”.
Be aware of the Montaniel opinion that came out in January that talks about whether or not the plan can sue your claim if you distribute and on the note of, we might jail you. Huh, Good Luck!