Medical Liens in Medical Malpractice Cases
In the last post, I explained the general procedure and theory behind liens that may be asserted by health care providers. However, Massachusetts, Rhode Island, and a number of other states, have passed statutes that alter these procedures in medical malpractice cases. Unlike other tort defendants, who are responsible for the medical costs of their victims, these statutes in effect allow doctors and hospitals to avoid paying for the medical treatment necessitated by their negligence, instead leaving that burden on the victim’s health insurer.
The statutes (G.L. c.231 s. 60G in Massachusetts and Rhode Island Statutes s. 9-19-34.1 in Rhode Island) generally allow the plaintiff to offer evidence of the amount of his medical and hospital bills at a medical malpractice trial, just as he would do in an ordinary negligence case. But if the plaintiff receives a verdict that includes compensation for medical expenses, the defendant is entitled to deduct from the verdict the amount of all medical bills paid by a health care insurer. When this deduction is made, the plaintiff is no longer responsible to repay his own insurer for these expenses.
In theory, this does not affect the plaintiff, but simply shifts the burden of medical costs away from the medical malpractice defendant and back onto the health care insurer. In practice, many plaintiffs’ attorneys simply don’t offer evidence of past medical bills at a malpractice trial, because they feel it avoids possible confusion and simplifies the process for the jury. Additionally, some lawyers are concerned that, if a jury awards a significant amount for medical expenses (which the plaintiff will never receive, because the amount of insurance payments will be deducted from the verdict), the jury may award less for other items of damage, figuring either consciously or subconsciously that the plaintiff’s bills were paid by insurance, and unaware of the repayment obligation. Where counsel decides to offer evidence of bills, it is good practice to ask the trial judge to instruct the jury that the bills must be repaid out of any award, so that the jury knows there will be no windfall or double recovery to the plaintiff.
But once again, there are some important exceptions. Bills paid by government insurers such as Medicare and Medicaid, and certain self-funded ERISA plans, are exempted from this process. The resolution of these liens can be technical, time-consuming and complicated, and will be discussed in the next post.