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Massachusetts Appellate Case Reviews Medical Lien on Car Accident Settlement

Several things must be considered when a personal injury settlement is reached. One of these considerations is whether the injured person is required by law to notify and pay a portion of the settlement to a third party. Some entities, often health care providers, are allowed to place a lien on settlements or benefits so that they can be paid for the services previously rendered. The Appeals Court recently examined an appeal by the estate of a woman injured in a Massachusetts car accident, which was ordered to provide payment to the Massachusetts Executive Office of Health and Human Services (MassHealth).

The estate reached a settlement with the defendant driver who caused the car accident and subsequent injury. This accident aggravated the now-deceased plaintiff’s dementia prior to her death a year after the accident. The estate filed suit within two years after her passing and ultimately reached a settlement of $250,000. Before the injured person died, MassHealth provided over $18,000 worth of medical care and imposed a lien on the claim for reimbursement of expenses paid for the injured person’s care.

The estate and MassHealth conferred about the lien prior to the settlement, discussing the possibility to reduce the lien. However, nothing came of these discussions because the injured person’s attorney did not submit the forms that would reduce the lien. After the settlement was reached with the defendant driver, MassHealth issued demand letters to the estate for payment. Eventually, MassHealth learned it was not named on the settlement check. Initially, MassHealth attempted to discuss the matter with the estate’s attorney, but it eventually moved to intervene on the settlement. The lower court granted the motion for intervention and ordered payment of the medical expenses. The estate appealed.

The estate argued in its appeal that the intervention by MassHealth occurred too late, the settlement was not subject to a lien, and a hearing is required before payment can be ordered. The appellate court disagreed, finding the Massachusetts General Laws allow an intervention upon “timely application,” which is determined by the trial court judge, who has been given a large amount of discretion. If the intervention is filed after judgment is entered, it is generally not considered timely, but case precedence considers there to be no final judgment if MassHealth is not given written notice and a reasonable opportunity to intervene. The Appeals Court found the estate failed to do either.

The Appeals Court also did not agree with the estate’s contention that the wrongful death settlement was shielded from the lien. The court found the statute did not separate out certain types of action or injuries from the obligation to make a payment in full as required. The court was also unpersuaded by the finding in a federal lawsuit, Arkansas Dept. of Health & Human Servs. v. Ahlborn, 547 U.S. 268 (2006). The appellate court first noted the estate waived the argument by not raising it initially, but in any case, the federal statute allows state Medicaid programs to recover expenditures from any payments by third parties. The court distinguished the situation at hand from the facts in Ahlborn, in which the parties stipulated to the full value of the claim and the amount from the settlement that would be applied to reimburse medical costs.

Finally, the appellate court disagreed with the estate’s assertion that a hearing was needed before an order of payment was issued. The court found this argument was also waived in the proceedings below when the estate failed to dispute the medical expenses billed by MassHealth. Since the law requires reimbursement in full, the trial court’s decision was affirmed.

The Massachusetts law firm of Karsner & Meehan has the experience you need to navigate liens, aggressive defense tactics, and labyrinthine statutory requirements. Their combined experience in workers’ compensation, wills and estates, and personal injury cases can assist an injured party or estate with complex legal issues. Call our office today at 508.822.6600 for a free, confidential consultation.

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Massachusetts Appeals Court Allows Estate to Pursue Wrongful Death Medical Malpractice Action, February 5, 2018, Massachusetts Injury Lawyers Blog