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Liens and Subrogation

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 workman’s comp, 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.
Medicare 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 that 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, 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 the 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 is 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.

Francisco Hernandez

Author Francisco Hernandez

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