Alabama Litigation Review : North Alabama Personal Injury Lawyer & Attorney : Jeff Blackwell : Hornsby, Watson, Hornsby, Blackwell & McKown Law Firm : Commercial Litigation, Workers' Compensation : Huntsville, Decatur, Athens

In Alabama, if you are injured on the job then you are entitled to workers' compensation benefits from your employer.  Each state has some form of workers' compensation system.  As a result, the benefits provided to injured workers can vary from state to state.  Although some large employers are self-insured, most purchase insurance coverage to cover the benefits required by a state's workers' compensation system.

An injured employee can obtain workers' compensation benefits regardless of fault.  However, Alabama law also allows the injured worker to pursue a legal claim against another party who may have caused the injury.  Here is an example -- You are a delivery driver.  You are on the job, driving the company truck, when another driver runs a red light and crashes into your vehicle.  You are hurt.  Under Alabama's workers' compensation system, your employer must provide you medical care and may also have to pay you certain disability benefits set out in the law.  Wait, the collision was really caused by the other driver.  If so, then you can pursue a claim against that other driver.  The workers' compensation system does not provide full compensation for all your damages.  However, you can pursue a claim against the other driver for all your damages.  These cases are commonly referred to as third-party claims by attorneys.

One issue in the scenario I just mentioned where you are hurt on the job due to the fault of another is that the workers' compensation carrier has a lien against your recovery from the responsible person.  That is, if your employer or its insurance company paid benefits for medical treatment or disability, they are entitled to get their money back if you successfully recover damages from the responsible party.  This is a complicated issue and it is important that the lawyer handling such a case have a full understanding of this area of the law.  Although complex, here are several quick tips to consider when handling this type of case:

1. Verify the claimed lien. -- In every case, I ask the insurance carrier for a print-out of all payments.  I often find that the print-out lists administrative and investigation expenses incurred by the carrier.  The carrier's lien only applies to actual expenses for medical or disability payments.  By reviewing the actual payments which comprise the claimed lien you can often eliminate amounts that should not be collected.  Many attorneys simply accept the carrier's statement as to the total lien amount without reviewing all the payments.  You can often save your client considerable money just by performing this simple task.
2. Bring the workers' compensation adjuster to the trial of your other case. -- When I go to trial in a third party case, I typically present the claims adjuster as a witness.  Since the insurance carrier often has a considerable lien, they should not mind sending a representative to trial.  I have found, however, that the carrier is rarely asked to send its adjuster to trial.  I cannot understand why many lawyers would not do this.  I have spoken with jurors after several of these trials and they have all indicated that having an adjuster testify to the significant amount of money spent to treat your client's injuries as well as the fact that they have a lien, has a great impact.  This witness, if handled correctly, can have a tremendous impact in validating the extent of your client's serious injuries.
3. Keep the workers' compensation carrier informed as to all difficulties and problems with your other case so that they will be in a position to negotiate with you in an effort to reduce the lien. -- Too many attorneys ignore this issue until there is a settlement in their third-party case.  Then, they call the adjuster handling the claim expecting to negotiate a reduction in the lien.  Whenever I have a third-party case, I periodically call the adjuster to talk about any difficulties with the case.  If you truly have a difficult third-party case where you might need to compromise in order to settle, don't you think the carrier might be in a better position to also compromise its lien if you have informed them of the issues along the way?
4. Seek discovery of any contracts between your employer and the other party if they had any prior relationship.  -- This is a great issue.  Many third-party cases arise out of construction work or work in an industrial setting.  In order to do this work, your client's employer will often enter into a contract with another business.  If that other business (or one of its employees) caused the injury, make sure you get a copy of the contract.  I have found that these contracts sometimes contain clauses where one party agrees to waive any claims against the other or against any money paid by the other.  Sometimes, these waiver clauses specifically waive liens.  If so, you can argue that there is no lien.  I have successfully argued this on a prior occasion before a trial court in Alabama.  One warning here, however, is that Alabama's Supreme Court has not addressed these clauses, including the issue of whether an employer can waive the lien of its insurance carrier.  This is an interesting issue for appeal.

The issues surrounding liens are often complex.  Too many attorneys either don't understand the issues or don't take the time to deal with them.  However, they are very important issues to consider when handling a claim.  Dealing with these issues correctly can often save your injured client significant money.

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I have now been involved in several prior legal seminars that were planned and hosted by the National Business Institute (NBI).  NBI offers continuing legal education courses in numerous states, including Alabama.

On one earlier occasion, NBI planned a seminar that brought together a number of distinguished Judges in North Alabama to provide practical advice.  Due to a conflict, the attorney scheduled to host the question and answer session had to cancel.  I offered to fill-in for him as host and greatly enjoyed the opportunity to interact with both the Judges and audience of attorneys attending the event.  Last year, I attended an environmental law seminar sponsored by NBI.  Again, I was thoroughly impressed with the speakers and their presentations.

On November 17, NBI is sponsoring a seminar in Huntsville titled "Personal Injury 101."  When NBI approached me about being one of the presenters at the seminar, I was hesitant to commit.  I initially thought the topic was a little too broad to provide any meaningful information.  However, when the event planner at NBI explained the actual topics for discussion and the attorneys committed to presenting them, I quickly changed my mind.

This upcoming seminar is going to provide a wealth of information.  I am going to speak about some interesting Alabama appellate decisions in 2010 as well as current product recalls that impact the safety of our citizens.  My good friend and fellow attorney, Tony Graffeo, is going to speak about several issues, including expert witnesses.  Tony and I have worked together on several cases, including, recently, a complex business and environmental case against a large chemical company.  He understands well the issues and challenges involving expert witnesses.  Another good friend and excellent attorney, Eric Artrip, is also going to address several topics, including insurance liens and subrogation.  This is a topic that presents a daily challenge to attorneys handling personal injury cases.  I think this seminar will be excellent.  Thankfully, I get to present first so I can sit back and enjoy the rest of the presentations.  If you are an attorney in North Alabama, think about attending this event.

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In at least two prior posts, I have discussed issues surrounding Medicare's rights to be reimbursed for medical payments from settlements or judgments in personal injury claims.  As I stated in the past, dealing with Medicare can be an extremely frustrating experience.  So, I am happy to report a recent court decision that, to some degree, requires Medicare to play by rules that apply to the rest of us.

On September 29, the United States Court of Appeals for the 11th Circuit issued a decision in Bradley v. Sebelius.  The case involved reimbursement claims by Medicare arising out of a wrongful death settlement in Florida.  This case is a welcome decision for attorneys frustrated by the experience of dealing with Medicare.  On his blog, Tennessee attorney John Day wrote a great analysis of this decision.  I agree with John after reading the facts of the case that it involved some great lawyering on the part of plaintiffs' counsel to document and position the case in an effort to achieve this great result.

In the case, the Federal Court rejected Medicare's far-reaching argument that its own field manual was basically entitled to the force of law.  In rejecting those claims, the Federal Court actually stated:

The Secretary's ipse dixit contained in the field manual does not control the law.

If you want to understand the Latin phrase ipse dixit, here is one definition as to its meaning:

The term ipse dixit is the Latin equivalent of the Greek autos epha, referring to Pythagoras, as in, The master (Pythagoras) said it so it must be true and no proof is needed.

The master said it so it must be true!  That pretty much sums up Medicare's prior attitude in dealing with its beneficiaries.  Here, Medicare created its own manual and has attempted to enforce it against beneficiaries as if it were a validly enacted statute.

Additionally, according to this case, Medicare must account for underlying state law concerning substantive recovery rights.  Under Florida's wrongful death law, the claim of an estate is separate and distinct from the claims of the survivors.  Both the estate and survivors of a deceased can sue the party responsible for causing the death in Florida.  However, under Florida law, only the estate can claim medical expenses as part of its damages.  Thus, only the estate's share of any settlement is subject to Medicare reimbursement claims.

This decision is a welcome limitation upon Medicare's actions.  Now, if Congress would only pass legislation requiring Medicare to respond in a timely manner to efforts by private parties to reimburse medical payments.

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As I have previously written, it is essential that an attorney handling personal injury claims have a sound knowledge of reimbursement and subrogation issues.  Otherwise, the attorney will be ill-equipped to protect his injured client and maximize any recovery for that client.  Many issues and facts impact the rules applicable to each specific case.  For instance, does the injured party have health coverage through a private plan?  Is that private plan provided through an employer?  If the injured party does not have private coverage, do they have coverage through Medicare or Medicaid?  Is the coverage through some other public source, such as the Veterans' Administration?  Each of these presents unique issues and rules.

I could write exhaustively concerning the various aspects of dealing with each type of coverage and its unique issues.  However, I truly believe that most attorneys who handle personal injury claims would agree that dealing with Medicare is the most frustrating of any of these.  Imagine a system that requires (with the full force of Federal law) the injured party and his legal counsel to reimburse it from a settlement or judgment, then will not communicate effectively or timely so that those parties can fulfill their legal obligations.  That is Medicare.  Attorneys for personal injury claimants often wait months (or longer) for Medicare to respond to efforts at repayment.  A reporter at The Miami-Herald did an excellent job documenting the frustrations of lawyers attempting to comply with Medicare laws on behalf of their injured clients.  At our office we have experienced that frustration first-hand.  In addition, just imagine how much money is actually available to our government in attorney trust accounts throughout our country.

Finally, those knowledgeable and involved in the Medicare reimbursement process are beginning to discuss methods that would force Medicare to act in a just and timely manner.  In March, legislation was introduced into the U.S. House of Representatives on this issue.  The proposed legislation has support from varied groups, including groups often at odds in personal injury claims.  Despite their differing opinions on many issues, these varied groups all seek changes in Medicare reimbursement procedures that would make the process quicker and more efficient.  What does the proposed legislation do?  The bill itself is fairly short.  It simply provides time limits for Medicare to respond when parties seek to reimburse prior payments for medical treatment.  That is a much needed change that should certainly be discussed and considered.  While I do have some initial concerns with the bill, including whether a potential defendant in a claim could use the provisions to its benefit in litigating that claim, it is a much needed start to resolving a frustrating issue for injured parties.  It is also my hope that Medicare will act to comply with any enacted time requirements so that health care costs are not unnecessarily shifted from private insurers to our government.

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This morning, the workers' compensation attorney Jon Gelman had an interesting note on his blog about a recent Medicare recovery case filed here in Alabama.  Essentially, the case involves the United States seeking to recover medical payments made by Medicare on behalf of several injured individuals.

The case raises an often misunderstood and complicated issue that we must handle on a daily basis.  Most often, our clients have some type of health coverage that pays their medical bills.  For many, this coverage is provided by private insurance such as Blue Cross.  For others, coverage may exist through some type of government program such as Medicare, Medicaid, or the Veterans' Administration.  Normally, when we seek medical care our particular coverage provides some level of payment.  Typically, this is the end of the story.  However, each of these plans or programs possesses unique rights to be reimbursed for their payments if an injured individual then recovers for their injuries from some third party, such as a personal injury lawsuit recovery.

Many personal injury attorneys seem to focus exclusively on the value of their case from the perspective of what amount of verdict or settlement can be obtained from the responsible defendant.  Personally, I believe that every case should be prepared for trial, rather than simply a settlement, from the beginning.  While this should be the most important focus of an injured person's legal counsel, it should not be the sole focus.  Too often, legal counsel ignores the complicated issues of medical reimbursement and subrogation.  Each particular type of coverage brings unique recovery rules and rights to the table.  These recovery rights are probably the greatest with Medicare.  In the case of Medicare, the government has far reaching rights to pursue claims against not only the injured party, but also, their legal counsel and the original personal injury defendant.  In the case of Medicare, as opposed to a typical private plan in Alabama, those rights even extend to future medical costs.

Effective legal representation in personal injury cases requires an attorney to understand the complex web of subrogation law and to deal effectively with the specific providers.  This is important to avoid a negative action by the coverage provider such as a lawsuit or a future refusal to provide benefits.  Also, if counsel clearly understands the various rules and how to use them, he can often work a resolution that minimizes any reimbursement, and thus, maximizes the recovery ultimately provided to the injured individual.

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