Product Liability FAQ

How to Protect Your Settlement from Your Health Care Insurance Provider

How does this issue affect me?

Many people reading the title of this article will wonder, “Why on earth would I have to worry about that?” Unfortunately, because of the deep discounts HMOs have all but forced on hospitals and clinics, and their reluctance to pay many claims, medical care providers are scraping for every penny. Some hospitals are laying claim to part of their patients’ liability settlements to collect what patients owe them. However, some are reaching further than that.

How do health care providers overreach?

The basics of medical insurance payments are really quite simple. A health insurance company will contract with a hospital to pay a certain percentage or certain fixed amount for each type of charge. For example, a hospital’s normal charge for a chest x-ray may be $150. The insurer may contract to cap the total payment due for a chest x-ray at $100. In turn, the insurer’s contract with its customers may require the insurer to pay 70 percent of the cost of x-rays. Therefore, if a patient receives a chest x-ray, the insurer will pay $70 (70 percent of the $100 agreed cost), and the patient will have to pick up the remaining $30. Who is on the hook for the additional $50 of the hospital’s regular charge? Nobody. The hospital’s contract with the insurer effectively resets the price of the x-ray for the insurer and its policyholders.

When a patient is in an accident, he or she may require extensive medical services. The amount that is left over after an insurer pays its portion can be very high. The patient legitimately owes this money, and the hospital legitimately can collect it from the proceeds of the accident settlement. However, sometimes hospitals will try to get a second slice of the pie by billing the patient for not only the portion he owes after the insurer has paid its part, but also the difference between the charge contracted with the insurer and its regular charge. In our chest x-ray example, that means that the hospital would try to claim $30 plus the discounted $50 from the patient’s injury settlement. This can add up quickly! This practice, known as balance billing, is illegal in some states. However, some hospitals are apparently ignoring the law where auto insurance liability settlements are involved.

How does a hospital make a claim on a settlement?

Jane Driver was admitted to a hospital after receiving some substantial injuries. She has health insurance through an HMO, and gives that information to the hospital and tells the hospital that she was injured by a defective product. Hospitals, without a patient’s permission, may file a lien on an accident insurance settlement within a certain period (often between ten and thirty days) after they have provided care. The hospital files a lien against any settlement Jane receives.

The insurer settled with Jane for $10,000. Her hospital bills amounted to $5,000, 70 percent of which ($3,500) was paid by her health insurance. The amount she owed personally was $1,500. However, rather than collecting $2,500 through the lien, the hospital collected $4,000—the $1,500 Jane owed plus $2,500 that it would have charged if not for the discount contracted between it and Jane’s insurer. In many places, the hospital broke the law.

What are the courts saying about balance billing?

More patients are suing hospitals; some individually and some in class actions. Key cases in Texas and Wisconsin have resulted in strong language from the courts and big judgments against the offending hospitals. According the Texas court in Satsky vs. United States, the judge held that the hospital, which had been paid in full by the patient’s health insurance company, was prohibited from recovering any further funds. A lien could only attach if there was a debt secured by the lien, and because the bill had been paid in full per the health insurer’s contract with the hospital, there was no debt remaining for the hospital to collect. The Wisconsin judge in Dorr vs. Sacred Heart Hospital didn’t mince words, stating that the hospital had filed its lien “purely as a ploy to try to get as much money as possible,” and that it had intentionally disregarded the patient’s rights in doing so.

In addition, the Attorney General of Maryland, and Florida and Arkansas Insurance Commissioners have specifically warned health care providers that balance billing is illegal. Michigan’s public health regulations specifically state that the practice is forbidden. As the practice continues, it is expected that courts in more states will rule that the practice is illegal, and that more states will take an official stance.

Can my health insurance company take part of my settlement?

Your health insurance company often has a right to take part of your auto accident settlement, depending on what you agreed to in your health insurance policy. Often, your health insurance company is entitled to recover everything it paid for your medical care, which is called subrogation. The theory behind subrogation is that a person should not have his medical bills paid twice—once by his health insurer, and a second time in the form of a settlement or judgment for damages in an accident liability case. So, rather than having your medical bills paid by the insurance company and getting the equivalent sum to keep from the settlement, you would have to pay the amount you received for your medical expenses in the settlement to your health insurance company.

 

The First Circuit Court of Appeals case of Da Silva Neto v. Holder, 680 F. 3d 25 (1st Cir. 2012)

 

 Illustrates the categorical and the modified categorical approaches to determining whether a crime does or doesn’t involve moral turpitude.  A foreign national convicted of a crime of moral turpitude can be denied entry into the United States or removed from the United States.

 Being convicted of a crime of moral turpitude can also bar a foreign national from proving good moral character.  Good moral character is a requirement for naturalization and for applying for cancellation of removal.  

The case of Da Silva Neto v. Holder illustrates the importance of proving good moral character and shows how courts determine whether a crime involves moral turpitude.  Neto went to a New Year’s party at his ex-wife’s house.  He left the party and then tried to return.  When his ex-wife refused him entry, he kicked the door in and, once inside, broke some glass and threw some furniture.

 Neto was arrested and pled to sufficient facts to malicious destruction of property. penalized as M.G.L. c. 266 § 127.  He was sentenced to eleven months probation and an anger management program.  He successfully completed his probation and the court dismissed the charges against him.  Nevertheless, ICE took Neto into custody and placed him in removal proceedings.  

Neto tried to apply for cancellation of removal for non-LPR’s under INA § 240A(b).Cancellation of removal is a form of discretionary relief which allows a removable (deportable) foreign national to remain in the United States.

 Non LPR cancellation of removal is available to foreign nationals who:• Have been physically present in the United States for at least ten (10) years before removal proceedings;• Have been a person of good moral character during the ten (10) year period immediately before applying for cancellation of removal;• Have no disqualifying criminal convictions;• Have an LPR or U.S. citizen spouse, parent or child. 

To be granted cancellation of removal, the applicant must persuade the judge that his removal will cause exceptional and extremely unusual hardship to his LPR or U.S. citizen spouse, parent, or child. The immigration judge decided Neto didn’t qualify for cancellation of removal because his conviction for malicious destruction of property meant he could not demonstrate that he had good moral character.

The conviction, the judge decided, involved moral turpitude.     A crime of moral turpitude is a crime that “shocks the public conscience as being inherently base, vile, or depraved, and contrary to the accepted rules of morality and the duties owed between persons or society in general.”  A crime of moral turpitude is one that is inherently base, vile, and depraved.”  “per se morally reprehensible and intrinsically wrong” Whether a crime is or is not a crime or moral turpitude is decided on a case-by-case basis. 

Neto appealed to the BIA and then to the First Circuit Court of Appeals. To determine whether malicious destruction of property was a crime of moral turpitude, the BIA  applied the categorical and then modified categorical approaches.    Under the categorical approach, the court looks to the statutory definition of the crime and determines whether or not it describes a crime that is “inherently base, vile, or depraved.”  If it does, then the crime is a crime of moral turpitude. 

If the statute describes both types of crimes- crimes that could involve moral turpitude  and crimes that don’t necessarily involve moral turpitude- then the court will use the modified categorical approach.   Under the modified categorical approach, the court will look to the record of conviction to determine which type of crime the person was convicted of.  The record of conviction is made up of the docket sheet, the plea agreement, and other reliable documents that prove what a person was convicted of.

 The Massachusetts malicious destruction statute, M.G.L. c. 266 § 127, punishes both wanton destruction of property as well as malicious destruction of property.  Under Massachusetts law, wanton destruction of property requires only that the actor’s conduct was indifferent to, or in disregard of, probable consequences.  

Malicious destruction of property requires a state of mind of cruelty, hostility, or revenge.  The BIA held that wanton destruction of property was not a crime of moral turpitude because it could be done with indifference or recklessly.

 The BIA held that malicious destruction of property was a crime of moral turpitude because it required a state-of-mind of cruelty, hostility, or revenge.After looking at the record of conviction, the BIA determined that Neto committed malicious destruction of property, a crime of moral turpitude.  The Court of Appeals upheld the BIA’s reasoning.  This case illustrates the importance to foreign nationals charged with a crime of retaining defense counsel experienced in both immigration and criminal law.

 An experienced and knowledgeable criminal and removal defense lawyer would have known how to create a record of conviction that would have favored Neto. 

 

GREEN CARDS

Permanent immigration is the main objective of the majority individuals entering or making arrangements to enter the United States. A “Green Card” is an identification card that demonstrates the official permanent resident status of an immigrant (Lawful Permanent Residency) in the United States. Green card also refers to an immigration process of becoming a permanent resident.

The green card serves as proof that its holder, a Lawful Permanent Resident (LPR), has been officially granted immigration benefits, which include permission to reside and take employment in the USA. The holder must maintain permanent resident status, and can be removed from the US if certain conditions of this status are not met.

At the same time as the individual’s green card application is pending, he or she can obtain two important permits while the case is pending. The first is a temporary work permit known as the Employment Authorization Document (EAD), which allows the alien to take employment in the United States. The second is a temporary travel document, advance parole, which allows the alien to re-enter the United States.

Both permits award benefits that are independent of any existing status granted to the alien. For example, the alien might already have permission to work in the United States under an H1-B visa.

U.S. immigration legislation in the Immigration and Nationality Act (INA) stipulates that an alien may obtain permanent resident status only through the course of the following proceedings:

Lawful permanent residency gives individuals a multitude of benefits, including the ability to live as a free person in this country and to live and work permanently in the U.S. Although, Lawful Permanent Residents generally do not have the right to vote, the right to be elected in federal and state elections, the ability to bring family members to the United States (however permanent residents are allowed to sponsor certain family members), or eligibility for certain federal government jobs.

Male permanent residents between the ages of 18 and 26 are subject to registering in the Selective Service System. Permanent residents pay taxes on their worldwide income, like U.S. citizens. Also, certain conditions that may put a permanent resident in deportation proceedings do not apply to U.S. citizens.

A Lawful Permanent Resident can apply for United States citizenship, or naturalization, after five years of residency. This period is shortened to three years if married to a U.S. citizen, or four years if permanent residency was received through political asylum. Lawful Permanent Residents may submit their applications for naturalization as much as 90 days before meeting the residency requirement.

Citizens are entitled to more rights (and obligations) than permanent residents (who are still classified as aliens in this respect). This is just a small portion of information and the extent of complexity of green card issuance. Green Card processing can be extremely difficult and confusing.