Are More Changes Afoot? Mediation Trends in 2014

The title of this piece is phrased as a question because… frankly… I don’t know the answer.

Personal injury law is far more complicated in application than many people might believe.  Personal injury plaintiffs’ lawyers have to be vigilant in their efforts to remain current with all law that might have an impact on their practice and upon their clients.  Because of our common-law system, significant changes in the law occur so frequently that it is very difficult for even the best to remain current.  It is not much easier for the defense.  In recent years they have faced new risks when it comes to paying claims to plaintiffs with noticed liens in the file.  Even though the law has been around since the early 1990s, the impact of the Medical Care Recovery Act, §§ 1 et seq., 1(a), 42 U.S.C.A. §§ 2651 et seq., upon the attorneys on both sides of the “V” has become more and more prominent in negotiations and case settlements.  Defense attorneys are far more diligent in ferreting out statutory liens such as Medicare liens than they were in years past.  The fact is that an attorney on either side who misses the existence of such a lien may find himself personally liable to satisfy the lien after the client has taken the money and run.

Additionally, in spite of the old “collateral source rule,” in 2011 the California Supreme Court had plaintiffs’ lawyers (figuratively) leaping off of high-rise buildings with its holding in Howell v. Hamilton Meats & Provisions, Inc., (2011) 52 Cal.4th 541.  In the “old days” the presentation of medical bills (properly authenticated) generally served as the economic damages basis for most personal injury settlements and judgments.   Since it was standard for our system to roughly calculate the value of a personal injury case based upon the medical specials, when Howell became the law the value of the case inventories of most law firms dedicated to representing plaintiffs in personal injury matters were drastically devalued.

As a consequence there has (in my experience) been a perceivable increase in the provision of medical services on a “lien” basis.  Since medical services provided on a lien are generally not paid until the resolution of the case, those bills can be recognized in their entirety.  Of course, most who are involved in this area litigation are aware that lien services are frequently billed at a higher rate than are cash for service.  This is very similar to why the courts allow higher recoveries in attorney fee requests when the attorney is working on a contingency fee basis.  The healthcare providers who provide services on a lien basis are taking the risk that they may not be paid.  However, unlike attorneys’ services taken on a contingency basis that are not recoverable if the client does not prevail, medical liens do not generally go away just because the plaintiff loses at trial.

Now we are facing the reality of the new Affordable Care Act sometimes pejoratively referred to as “Obamacare.”  Love it, hate it or standing somewhere in between, any lawyer who practices in an area of law in which medical expenses are an issue will, I believe, feel a significant impact from the Affordable Care Act.(the “Act”)

Though I believe that some will still rely on medical liens to help their clients, if the Act performs as it is intended, the promise of universal healthcare for any medical issue will more firmly solidify the amount of damages that are recoverable in a plaintiff’s case.  I also believe that in the event that a plaintiff or her lawyer opts to pursue treatment on a lien, (so long as coverage under the Act is available) rather than taking advantage of the health insurance that is available, defense attorneys will argue that the plaintiff failed to mitigate her damages to the detriment of the defense.

Another factor to think about is whether or not the administrator of the health insurance (for some it could be Medicare) is going to aggressively pursue reimbursement in a personal injury matter.  As we know, Medicare tends to be the gorilla on the sideline waiting for payment in all cases in which it has a lien.  Add to that the delay in resolution of cases in which statutory liens exist, the problems will grow.   I suspect that there will still be some ability to negotiate and that clever lawyers will, as they already do, find ways to avoid the lion’s share of those liens.  Nevertheless this is something must be considered.

I am an ADR specialist whose practice is dedicated entirely to arbitration and mediation.  I and my colleagues in this field must also be up-to-date and aware of how the Affordable Care Act will impact the cases in which they participate.

Perhaps I am concerned about something that will never be an issue.  That said, I will refer to the old adage that the best offense is a good defense.  Lawyers and ADR specialists (and judges) should have these considerations well researched and ready to answer questions when they arise.  Further, if lawyers and ADR specialists are not individually well-prepared, they will all be at the mercy of some lawyer or opposition who can assertively express a view on the matter whether or not authority is readily available.  It appears to me that we will be confronting the issue of health insurance liens and adjustments to medical specials’ calculations more frequently and with less certainty in the New Year.

FOOTNOTES

Howell requires the trial court to only consider the amount actually paid by insurers for medical treatment in the award of economic damages in an injury case in spite of the amount billed.

This is in spite of the fact that there is no established “formula” for deciding such matters.  Special damages of $1.00 could result in a General (non-economic) Damage verdict in the tens of thousands, or more.

I suggest this is an issue that should be raised with lien based medical providers by the various lawyers’ groups comprised of attorneys who practice in the personal injury field.

This possibility, alone, should encourage Plaintiff’s attorneys to document their files as well as possible and to obtain “final lien” amounts from the lienholders as soon as they are able.  Too often we put this matter off until the eve of settlement negotiations.

                        author

Donald Cripe

Donald Cripe is a Law Professor (Mediation/ADR), Univ. of La Verne College of Law; Superior Court Judicial Arbitrator since 1996—having conducted several hundred arbitrations; Settlement Judge since 1996; Family Law Mediator-Riverside Superior Court Mandatory Dispute Resolution Conference Program; General Mediator-Dispute Resolution Services, Riverside; Civil Mediator- Riverside County Superior Court; Riverside… MORE >

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