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Medical Liens and Ethics
When it comes to claims by medical providers and government agencies seeking reimbursement from patients' personal injury awards, there is often a blurred distinction between liens and subrogation rights. And what about the ethical considerations and violations that are integrally involved in these cases? By looking at one state's (New York's) attorney ethics code and how it relates to the laws that enable medical liens, we will see the issues many lawyers nationwide must face when deciding how to proceed in these cases.
Statutory Foundations for Medical Liens
Medicare is a federal enabling statute that was enacted as part of President Lyndon Johnson's major legislative enactments in 1964. Recovery provisions were added in 1985 and established the Centers for Medicare & Medicaid Services (CMS) [42 USC '1395y(b)]. The recovery of Medicare payments from personal injury settlements or resolutions is presently handled by a Medicare Secondary Payor Recovery Contractor (MSPRC), an entity that was created in 2006. MSPRC takes the position that it has a “lien” on any and all personal injury recoveries. At least one federal court has formally held that “Medicare's right is superior to a lien.” Zinman v. Shalala, 835 F.Supp. 1170-71 (N.D. Calif. 1993); aff'd 67 F.3d 841 (9th Cir. 1995); United States v. Geier, 816 F.Supp 1332, 1337 (W.D. Wis. 1993) cf: Hadden v. United States, 2009 U.S. Dept. LEXIS 69383 (Aug. 6, 2009). The U.S. Department of Justice recently took a judgment against an attorney for non-satisfaction of a lien out of a personal injury settlement. United States v. Harris (N.D. W. Va. 2008).
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