Dallas Fort Worth Insurance Lawyer Blog

If someone in Dallas, Fort Worth, Arlington, Grand Prairie, Mansfield, Hurst, Euless, Bedford, Duncanville, or anywhere else in Texas gets involved in an accident and someone besides themselves are at fault, what happens when health insurance pays for the medical bills resulting from the accident? The answer is one you are going to hate. The answer is: It depends.
There are many variables that come into play, some of which have been discussed in previous blogs. Today we are going to discuss what happens when a person's own personal health insurance company pays for the medical bills incurred as the result of someone else causing injury to you.
Typical health insurance companies are Blue Cross / Blue Shield, Humana, and other names you have heard about and often times this health insurance is provided as a benefit by your employer. The significance of employer provided health insurance is that many times the health insurance provided through employment is a federally regulated plan called Employers Retirement Income Security Act, otherwise known as an ERISA plan.
ERISA plans are in a category all by themselves and are often times very difficult to deal with. Other plans, that are not ERISA are usually much easier to deal with but can still be challenging depending on the language in the plan.
The Texas Supreme Court has held, that when someone else causes one to incur medical expenses that get paid by the injured person's health insurer, that the health insurer may be entitled to "first money" from a settlement. This may be the case even where the injured party has not been made whole by the policy proceeds from the person's insurance company who caused the medical bills to be incurred. By not "made whole" meaning the injured person still is short money due to lost wages and other damages.
The most recent, significant case by the Texas Supreme Court, is a 2007 case styled, Fortis Benefits v. Vanessa Cantu and Ford Motor Company. This case is a must read to have an ideal of how subrogation sometimes works.
Keep in mind - when someone else, a third party, causes you to be injured and incur medical expenses and you have health insurance that pays those medical expenses, then, when you recover from the person who caused the injuries you have a responsibility to pay back your health insurance. When your health insurance pays, they have paid for bills that the third party should have paid for. If you do not pay them back then you are getting a "double recovery." However, it should be quickly pointed out that sometimes this is okay, it just depends on the circumstances and the writing in the health insurance policy.
It is vital to have an experienced Insurance Law Attorney involved in these situations. If it is not handled properly, the person receiving the "double recovery" could find themselves being sued by their health insurance company. This is not uncommon. An experienced attorney, using properly legal means, can often times make this "double recovery" legal. But it is a situation where the "i's have to be dotted and the t's crossed."
Health insurance companies generally include a subrogation clause in the insurance contracts and the wording will vary insurance company to insurance company and policy to policy. But these contractual provisions creating a right of subrogation are valid and should be honored. This has been made clear by the Texas Court of Appeals, Eastland, in 1974, in the case, Group Hospital Service, Inc. v. State Farm Insurance Co.
Worse, some policies have provisions written into them excusing the health insurer from paying altogether if there is a personal injury claim arising from an injury, so injury claims increasingly do not involve health insurance.
One thing to bear in mind and make clear. These policies vary widely with an ERISA plan being the hardest to deal with in these situations. And an experienced attorney can sometimes make even the worst plans deal fairly with the injured person.

What is common to a lot of residents of Dallas, Fort Worth, Grand Prairie, Arlington, Mansfield, Benbrook, Burleson, Aledo, and other areas of Texas? One, there are a lot of veterans living in the state and two, there are a lot of people who are behind on their child support payments.
First of all, there is no correlation between the two, except they are easy and short discussions. Let's talk about VA subrogation first.
When someone is injured as the result of a third person's negligent activity and the Veterans Administration has paid benefits to the injured person, the VA is entitled to be repaid for the amount of money they spent on the veteran's behalf. The reimbursement rights of the VA are written into law and are set out in the 1990 case, United States v. Maryland. This is a United States 4th Circuit case and in part says:
Federal law pertaining to veterans benefits places the Unites States on an equal footing with private hospitals in its attempts to recover from third parties the cost of medical services provided veterans for non-service-related injuries. Such equity is ensured by 38 U.S.C., Section 629(a)(1), which provides:
In any case in which a veteran is furnished care or services under this chapter for a non-service-connected disability ... the United States has the right to recover or collect the reasonable cost of such care or services ... from a third party to the extent that the veteran (or the provider of the care or services) would be eligible to receive payment for such care or services from such third party if the care or services had not been furnished by a department or agency of the United States.
The above statute defines at 38 U.S.C., Section 629(i)(3), third parties to include health care providers, employers, automobile insurance carriers, and "a State or political subdivision of a State."
Bottom line - these Veterans Administration subrogation interests have to be protected and the failure to do so correctly could put someone in the position of being sued by the Veterans Administration.
So now, what about child support liens? What do they have to do with injury claims? Most important, Texas Family Code, Section 157.317(a), says a lien for unpaid child support attaches to the personal injury claim of a person owing the child support. The lien is enforced by the Texas Attorney General. This lien is inferior to that of a health care provider with a valid lien, which essentially means that health bills get paid before the child support lien. Also, a child support lien does not attach to the injured persons' attorneys fees in the personal injury case. Think about it this way. If the attorneys could not be paid out of the settlement, then there is no incentive to get an attorney involved and thus there is no recovery to assist with the back child support payments.
An important note on child support liens is that there must be actual notice of the lien before it attaches to settlement proceeds. Contrast this with the other government liens where there does not necessarily have to be actual notice of the lien. These child support liens arise by operation of law and attach to all of the obligor's property, as well as to an injury claim. Texas Family code, Section 157.261(a) and 157.312(d) make this clear. Child support liens may be filed with the County Clerk in the county where the injury suit is filed, the county where the divorce (or suit in the interest of the child) originated, or in the county of the child support obligor's residence. Child support is not just for the dad - it applies to moms and dads.
The above are just two more examples why an experienced Insurance Law Attorney needs to be consulted when dealing with insurance companies.

What do residents of Dallas, Fort Worth, Grand Prairie, Arlington, Mansfield, Weatherford, and other cities in Texas need to know about subrogation? The answer is, a lot, unless you get an experieinced Insurance Law Attorney helping you.
Another important and potentially risky area of subrogation is Medicaid. Medicaid is a Federal program which is administered by the State. For us Texans, the program is administered by the State of Texas. Anytime you are discussing Federal Government liens and subrogation claims, such as Medicaid, Medicare, Veterans Administration, and a laundry list of others, it is wise to assume that such liens attach to claims and are superior to other liens, even if you have no actual notice of their existence.
Having said the above, it is important to realize that Medicaid and Medicare liens are very different creatures. This is expecially true in light of a recent United States Supreme Court case appealed from the State of Arkansas. This 2006 case is styled, Arkansas Department of Health and Human Services v. Ahlborn. A copy of the July 3, 2006 memo setting forth the Federal Government's position on Ahlborn's impact on Medicaid reimbursement / subrogation is available to the public on the Internet at:
http://www.nasmd.org/issues/docs/CMS_Advisory_Ahlborn_Settlement_Options_July%202006.doc.
This memo includes the following language about the Ahlborn decision: "A State's lien laws may only operate to recover from that portion of a settlement that is allocated to healthcare items or services, even if it means that Medicaid must forego full recovery of its claim." The memo included the following section:
What This Means for Medicaid Third Party Liability Recovery Programs:
Prior to the Supreme Court's decision in Ahlborn, CMS had interpreted the Medicaid third party liability provisions to authorize States to pass laws permitting full recovery of Medicaid assistance payments from third party liability settlements, regardless of how the parties allocated the settlement. The Supreme Court rejected this interpretation of the Medicaid statute and held that to the extent State laws permit recovery over and above what the parties have appropriately designated as payment for medical items and services, the State was in violation of federal Medicaid laws.
For Texas, the Ahlborn decision means that insurance adjusters, individuals, or attorneys dealing with a Medicare or Medicaid lien have to familiarize themselves with the current interpretations of the Ahlborn decision under Texas law.
And finally, here is something very important to know: A Texas Medicaid recipient may commit a misdemeanor by failing to notify the Texas Department of Human Services of a tort claim or cause of action. This can be seen in the Texas Human Resources Code, Section 32.033(b) and the Texas Penal Code, Section 12.23. In other words, if you do not handle these federal benefits properly as it relates to their lien / subrogation interests, you may be guilty of a criminal offense.

A large part of the population in Dallas, Fort Worth, Arlington, Grand Prairie, Weatherford, and most all other cities in Texas receive some form of government benefits. So what happens when someone receiving Medicare benefits gets a settlement in an injury case from an insurance company?
The answer to the above question is, "it depends."
It should be obvious that if the benefits received by someone on Medicare are unrelated to the claim being made, then there is nothing to worry about. However, if the person receives a settlement based on injuries and medical bills that were paid for by Medicare, then Medicare is entitled to be paid back for any monies they paid for the benefit of the person receiving the benefits.
The most typical scenario is: A person who receives Medicare benefits is involved in an auto accident where someone other than the person receiving the Medicare benefits is at fault. The Medicare recepient goes to the emergency room and receives care until they have recovered from the injuries that were incurrred. The bills incurred by the Medicare recepient are all paid for by Medicare.
When the above happens, Medicare has a lien for any monies paid to settle the claim against the insurance company that the Medicare recepient is entitled to.
Medicare liens are sometimes referred to as "super liens" and for good reason. A Medicare lien is superior to other types of liens and does not even require written or actual notice to the parties involved. They are just suppose to be paid back, period. Medicare can recover from either party or either party's attorney. There are several Federal laws saying so.
Texas Courts have sometimes upheld Medicare's "super lien," even in the case of uninsured motorist benefits. This was shown in the case, Lewis v. Allstate, where Allstate was held not to have breached its contract with its insured by including Medicare as a co-payee on the settlement check for uninsured motorist benefits when both parties knew Medicare had issued payments for the insured's medical treatment. This was a 2006 case. In the Lewis case, the insured person conceded that Medicare would have had the right to seek reimbursement from an insurance company that knew or should have known about payments made by Medicare but failed to protect Medicare's rights. In this case, the insured attempted to rely on a 2000 case decided by the Beaumont Court of Appeals, styled Texas Farmers Insurance Company v. Fruge, in which the Court held "that it is a breach of contract for an insurer to include Medicare on a benefit check where the insurer had no reason to suspect that Medicare had any entitlement to a portion of the benefits paid." The Court refused to hold that Texas Farmers Insurance Company had a duty to determine the amount paid by Medicare, and distinguished Fruge, wherein the insurer knew Medicare had made a very small payment, yet it included Medicare as a co-payee on checks totaling nearly ten times that amount.
When dealing with Medicare it is not just important, it is vital that an experienced Insurance Law Attorney be involved in the settlement to keep the Medicare recepient out of legal trouble.

What if someone in Fort Worth, Arlington, Mansfield, Mesquite, Garland, Irving, Grand Prairie, Dallas, or anywhere else in Texas, is involved in an accident and goes to the hospital for treatment? Are there any special laws that apply?
The answer is yes. It depends on the circumstances, but often times, what is called a "hospital lien" comes into play. If this hospital lien is not properly dealt with it could cost a lot of money and heartache.
Texas public policy strongly supports hospital liens, and it is important to understand that these liens are not just applicable to hospitals; they may also operate for the benefit of EMS providers and doctors at teaching hospitals whose bills are not already included in the bill. The rights of hospitals and certain other medical providers to be paid from settlement proceeds or a judgment begins with the Hospital Lien Statute. This is found in the Texas Property Code, Chapter 55. It says, in relevent part, that a lien attaches to "any cause of action, judgment, or settlement" received as a result of an accident for which the person was admitted to a hospital within 72 hours of the injury, as well as any hospital to which the injured person is subsequently transferred for the same injuries. This is found in Texas Property Code, Section 55.002. These hopital liens must be filed prior to settlement in order to be valid, and hospital liens are limited to "reasonable and regular" charges within the first 100 days following the injury. Even the attorney representing the injured person may have to wrestle with the hospital for first priority, as seen in the Texas Supreme Court case styled, Bashara v. Baptist Memorial Hospital System, decided in 1985.
The Dallas Court of Appeals in 1979, in the case styled, Baylor University Medical Center v. Travelers, said that the intent of the Hospital Lien statute was to save lives, by "...inducing hospitals to receive a patient, injured by the negligence of others, by giving the hospital a lien on the claims, suit or settlement of the patient."
An important exception to the hospital lien statute is stated in the case, Members Mutual Insurance Company v. Hermann Hospital, decided in 1984, by the Texas Supreme Court. It says that a hospital lien does not attach to uninsured/underinsured motorists benefits. The reasoning is that the statute is to apply to settlements recovered from third parties and not to underinsured/uninsured benefits.
Another situation that the hospital lien statute does not apply to is a wrongful death case. Atleast that was the decision by the Fort Worth Court of Appeals in the case styled, Tarrant County Hospital District v. Jones, decided in 1984.
Rather than getting some relief by settling a case with the person who caused injuries in an accident, the end result could find the injured person being sued by the hospital if the hospital lien statute applies and is not properly handled.

What is a lien? The person in Flower Mound, Haslet, Saginaw, Irving, Carrolton, De Soto, Grand Prairie, Arlington, Mansfield, Fort Worth, or anywhere else in Texas may ask that question.
Generally speaking, in the insurance context a lien is a right to money that a third person may eventually get. Others describe it as a property right which remains attached to an object tht has been sold, but not totally paid for, until complete payment has been made. Another way of putting it is, a hold or claim which one person has upon the property of another as a security for some debt or charge.
In the insurance world a lien normally arises where some person or business causes injury to someone. After the injury, the injured person seeks and receives medical care that his personal health insurance pays for. When this occurs the health insurance company will usually have a subrogation lien against the person or business that caused the injury.
A personal injury settlement or judgment may create tension between insured people and their health insurance company and their medical providers. The right of an insurer of a medical provider to be paid from the proceeds of a settlement falls under the general category of subrogation. Subrogation is defined as, "The substitution of one person for another, expecially the legal doctrine of substituting one creditor for another."
Both "subrogation" and "lien" are terms of art with specific meanings, and it is sometimes hard to be true to the meanings. Legally, this is a challenge, as the terms are often used interchangeably by legislatures and courts and Judges. In the insurance context, it generally means the right to money that a third party may eventually get. Liens are perfected (that is, made collectable) by filing them with the appropriate County Clerk. Subrogation, which again is a term sometimes used interchageably with "lien," and sometimes along with it, as in "subrogation lien," is a right of repayment that can be created by a statute or by contract.
Before going further, when talking about liens and subrogation, it is vital that an experienced Insurance Law Attorney be consulted. Otherwise, a person receiving money and benefits can find themselves being sued. Sometimes a criminal wrong is committed unknowingly when these issues are not handled properly.
Subrogation interests are created by contract, and a third party's liability for same can be extinguished by a release of the wrongdoer by the injured person.
One example is where a person's car is damaged in a wreck with another person and the other person was at fault. The person's car who was damaged makes a claim with the insurance of the atfault person but the insurance company is too slow to fix the damage so the person with the damaged car gets his own insurance company to fix his car. He gets his car fixed and goes on about his life when two weeks later the atfault driver's insurance company calls and concedes they are atfault and pays money for the damage to the car. If the person who has his car damaged accepts the money he can get in trouble. Why? Because when he got his own insurance company to fix his car, his insurance company became the one who had the right to receive the money from the atfault driver's insurance.
Another example is, same as above but the person was also injured and went to the hospital and had his health insurance pay for his medical bills. Later when the atfault driver's insurance admits fault and pays the injured person for his injuries, the injured person's health insurance company has a subrogation interest that must be satisfied to the extent of all monies paid to the injured person.
The confusing thing about the above is all the exceptions that can come into play.