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Posts tagged ‘settlements’

Ethics Opinions Underscore Problems That Medicare Liens Create when Negotiating Settlements

In serious personal injury cases, a common issue arises in settlement talks that affect the course of negotiations – Liens; Specifically, health insurer liens and liens asserted by Medicare.  The problem is simple: a plaintiff with medical expenses often has those expenses paid for by his or her health insurer or through Medicare/Medicaid.  Medicare is entitled under the Medicare Secondary Payor Act to be reimbursed for any payments it has made for causally related medical care, and the health insurer has a subrogation interest in the proceeds it has paid.  The existence of these liens creates difficulty negotiating settlements.  Settlements are often much less than what could be a reasonably expected verdict if the plaintiff prevails, but going to trial involves risk, whereas a settlement eliminates risk.  In addition to the risk of a low plaintiff’s verdict or defense verdict, there are other factors involved in determining a reasonable settlement value, including limitations on the amount of insurance coverage available and the prospects of otherwise recovering a judgment from a defendant.  Because of these factors, the plaintiffs often have to engage in negotiations with the lien holders in order to settle the case because having to pay the full lien amount could negate any potential benefit of accepting a settlement or even continuing with the litigation.  For example, if the reasonable settlement value of a case is $100,000.00, but the plaintiff has liens in the amount of $80,000.00, the plaintiff is in a position where he or she cannot accept the settlement unless the lien holder takes less because the full settlement would otherwise go to the lien holder and the plaintiff’s attorney, leaving plaintiff with no recovery at all.  Given this reality, the plaintiff must often participate in a second negotiation with the lien holder to negotiate the lien down to a level where the lien holder will receive something, but the plaintiff will as well.  In effect, there are two separate negotiations: one between the plaintiff and defendant, and another between the plaintiff and the lien holder. Read more

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Protect Yourself When Settling a Minor’s Claim

                         The whole world is asleep
                         You can look at it and weep
                         Few things you find are worthwhile
                         And though I don’t ask for much
                         No material things to touch
                         Lord, protect my child

                                               “Lord Protect my Child” – Bob Dylan

One of the few universally accepted social mores in our country is that we, as a society, have an interest and duty to protect our children. This idea of protection is not limited simply to protecting children from physical harm, but rather to promote their overall welfare and best interests.  Not surprisingly, many laws have been enacted for the sole purpose of establishing safeguards to ensure that the best interests of a minor child are preserved when necessary.   Because a minor child lacks the legal capacity to take full advantages of the court system, specific emphasis has been placed on making sure that the rights of minors are adequately protected when their interests require involvement in the legal system. Read more