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Coopers’ Code Podcast

Lien Times

Apr 3, 2023 • 47 min

Coopers’ Code Podcast

Lien Times

Apr 3, 2023 • 47 min

With today’s co-host Hendrick White, our Pre-Litigation and Intake Manager, we will be discussing liens, their impact on cases, and how to deal with them so everyone’s clients’ get the best possible outcome from their cases. For those interested in reading the original article this show is based on, go here:

This episode is approved by the California State Bar for MCLE credit. To get your credit, listen to the episode, then fill out this form.

Miles B. Cooper:
Miles is a partner at Coopers LLP, where they help the seriously injured, people grieving the loss of loved ones, preventable disaster victims, and all bicyclists. Miles also consults on trial matters and associates in as trial counsel. He has served as lead counsel, co-counsel, second seat, and schlepper over his career, and is an American Board of Trial Advocates member.

Hosted by Miles Cooper
Produced by Mauro Serra | Kenji Productions
Recorded & Co-produced by Zach Morvant
Music by The Sure Fire Soul Ensemble


Miles Cooper: Howdy, welcome to the podcast. Coopers’ Code code examines a legal issue and hits that issue’s key practice pointers, and strategic highlights so that we can all achieve the best results for our clients. I’m Miles Cooper. And with today’s guest, Hendrick White, our pre litigation and intake manager, we’ll be discussing all things lien.

Namely, how to help reduce liens, negotiate liens, the Medi-Cal insurance claims, primarily, that cut into our clients’ recoveries, so that our clients can get the best net possible. Before we get into today’s topic, a few words about Coopers LLP. We at Coopers are committed to thought leadership, developing the best talent, and honing skills through learning, practice, trial, and the relentless pursuit of justice for consumers.

With lawyers licensed in California, Oregon, and Washington, we’re available for free strategic consultation on cases and accept referrals and trial co-counsel opportunities.

So Hendrick, thank you for being here today.

Hendrick White: Thanks for having me excited for the podcast.

Miles Cooper: So as we move forward, what’s a lien and why do we care?

Hendrick White: The million dollar question, what is a lien? A lien is basically some other health insurance’s interest in your case. For example, the health insurance may say, we paid X amount benefits for your client who was injured by the defendant, and we should be able to recover X amount because it was the defendant’s fault. In other words, they have a right in some percentage of the recovery.

Miles Cooper: Where does this right come from?

Hendrick White: It comes from the concept of subrogation, not to get too far in the weeds. I kind of just think of it as like they have the right to step in the shoes of the plaintiff to recover any kind of benefit they provided. So if they paid, you know, 10,000 dollars because someone injured another person, they’re going to use the doctrine of subrogation to try to recover that money. Basically stepping in the shoes of the clients because they paid, they had some skin in the game, something like that.

Miles Cooper: The phrase I sometimes use with our clients when I’m trying to explain it is that a contract that they never read, that stands for either their, their HMO or their PPO, has rules in place that now say because somebody else hurt them, instead of them being, hurting themselves, and they’re getting money from that person who hurt them and that money is in part for Medi-Cal expenses the health insurance now has a subrogation right or a lien claim.

Hendrick White: Right. And that contract’s based off of that subrogation concept.

Miles Cooper: The other place we sometimes see it are in disability policies. And disability policies are wonderful because if somebody was injured for quite a while in terms of how long it takes them to get back to work, if somebody has a disability insurance, they can pay for their living expenses while the case goes forward. But quite frequently, there will also be a subrogation claim on those as well. And oftentimes those are self funded ERISA plans.

Hendrick White: That is a huge obstacle for many cases, and you see those a lot more in tech industry, especially up here in the Bay Area. A lot of like the Googles and Meta, those type of insurance plans are self funded by the actual company. But yeah, it’s good to separate the health insurance liens into a couple of categories, I would say you have your self funded ERISA, meaning. It’s not covered by a California law or case law or statute, it’s governed by federal law, which makes it really difficult to negotiate with in the end. And then you have your private insurance plans, like your Kaisers, Blue Shield, Anthem. And then you have the liens that are statutory liens, which could be like Medi-Cal, Medicare, and then county hospital liens that may occur if the client didn’t have insurance at all when this happened. So there’s kind of like three or four categories of liens.

Miles Cooper: So when a case is coming in, when we’re sitting down with a client, what kind of information are you interested in gathering up front so that we can make sure that we’re doing the right thing for the client in terms of the lien at the back end of the case.

Hendrick White: The first thing that you want to do is kind of figure out what kind of lien we’re dealing with. What we do is talk to the client, figure out, hey, who’s your health insurance provider? Depending on their answer, we want to get ahead of the lien, initiate contact with the lien holder. Or if they have hired like a third party to work their subrogation claim or their reimbursement claim, like Optum or Equian for Kaiser, uh, we want to make contact with them right away and kind of ask them to notice the lien.

We kind of do a little bit of legwork for them in the beginning. Just so we don’t end up case settled and realizing like, hey, we need to finalize the lien right now and we need to get negotiated. We have the check coming in. We just want to get everyone on board and have all our kind of ducks lining up from the onset of the case.

Miles Cooper: Are liens something that automatically happens in a case, meaning just because someone gets injured is that individual immediately put on notice by its health insurance that there’s some form of lien?

Hendrick White: Most health insurance contracts require the client to put them on notice that they’ve been injured by someone else.

A lot of the third party recovery companies will send a letter to the client saying like, hey, did you get injured by someone else? It kind of looks like that from your Medi-Cal treatment at the hospital. If so, let us know. So I think a lot of times you have to report it for your contract. No one reads the contracts though. And we just try to do that just to get ahead of it, help us figure out the value of the case. And what do we need to get the best result for the client.

Miles Cooper: One of the things I tell clients is that there are typically triggering events that will get that lien letter kicked out from a health insurer. And it’ll be over a certain amount of dollars of Medi-Cal expenses, usually around 5,000 or an ambulance ride or an ER visit. Those tend to be the things that get a letter kicked out. Do you let the client fill that letter out? Or that’s something that we request be brought to a lawyer to, to fill the information out.

Hendrick White: We tell the client to forward us any letters from, you know, insurance companies or equity and, or any third party working for the lien holder. And we’ll make contacts with that entity. And we don’t want to burden the client to have to worry about that stuff. We’ll make that contact. We’ll give the appropriate information to the lien holder that they need for the lien.

Miles Cooper: Let me stop you there and ask you a question on that. One of the things that I see on the forms is they want to know the insurance carrier and claim number for the defendant in the case. Is that information that we as a firm generally provide?

Hendrick White: To me, it raises a little red flag because I feel like you start getting too many hands in the cookie jar. It can complicate things. I don’t really think they need to know who that is. I don’t want them in communication with the third party insurance liability company.

I’d rather just tell the insurance company send us a notice of lien, this is the date of the incident and let’s get the lien started and we’ll be in touch throughout the process here.

Miles Cooper: So once they send lien information over, sometimes our clients have an injury and at the same time have treatment for something unrelated.

Do you make sure, or do we make sure as part of our process, that we go through the items are listed on the lien to make sure there’s not a claim for everything under the sun in case there’s other treatment.

Hendrick White: Yeah, you definitely have to check that. And that generally will happen near the end. When you ask for a notice of lien, it’s going to take the lien holder a while to actually start sending you statements of benefits, essentially itemizations of what they’re considering related to the incident.

So you definitely want to check those as it comes in, when you get the final lien later on when maybe treatment has finished, you ask for a final lien, or you have a settlement offer. That’s when you really want to go line by line and ask them to remove any kind of lines that aren’t related. Like if they went in for a flu shot and that ended up on the lien, somehow you got to double check all that.

You have to do that with Medi-Cal and Medicare as well. And actually Medicare has a really nice web portal that you can kind of just mark, like I challenged this one, you know, that this one’s not right. And you just click them and then it’ll take a look at it.

Miles Cooper: That might be a good spot to kind of pivot into what I describe as kind of the three different avenues.

We’ve got self funded ERISA as one category. We’ve got Medi-Cal, Medicare, and Statutory Liens as another category. And we’ve got your, general purpose, private health insurance plan, the majority of cases, as your third. So since you just started talking about Medi-Cal, Medicare, what’s the difference between Medicare and Medi-Cal? And I don’t think you use the phrase CMS and let’s go down that Avenue in terms of the CMS portal and notification, how one deals with a Medi-Cal, Medicare or statutory lien.

Hendrick White: Medi-Cal is state funded and generally you have to qualify. There’s different criteria for qualification. Generally it has to do with the amount of money, uh, your household brings in per year.

And then Medicare generally kicks in when you hit 65 around the retirement age. Or if you’re on like permanent disability already. So generally you’re looking at age and then whether or not the client meets the threshold for the income requirement. So on the onset, you want to figure it out. Okay. Are we dealing with Medi-Cal Medicare?

The big factor is how old is the client? If they say, I don’t have any insurance, they may have Medi-Cal and don’t know it. If they’re over 65, they probably have Medicare. So once you figure that out, you want to immediately notify each entity. They both have their own web portals. CMS’s is really nice, which is Medicare.

You could do everything online. You’ll need to get a letter of representation signed for Medicare. Um, they kind of have the language that they suggest you use for their verification. And what that does is allows Medicare to actually send correspondence to the attorney’s office and not just the client, which I’ve seen in the past, the client gets all this stuff that says CMS and they’re like straight to the recycle bin. So you never see them and you never know like what the status is in paper. With Medicare, once you get that set up and you get your letter of rep verified, in the portal, it’ll tell you the first letter that goes out as your rights and responsibility letters, essentially just acknowledgement like, hey, we see that there was a, an incident and your client has Medicare. Then depends on how fast Medicare is working, but eventually you’ll get a conditional summary or conditional lien statement and it’s basically a preliminary lien saying, hey, this is what we found so far.

That also will be itemized in the web portal, which is nice. And it’ll tell you like, hey, we sent this letter out on X date and this is how much our conditional payment is right now. So as you go through the case, you want to notify Medicare as soon as you, as soon as two things happen, one, the client has finished treating, notify them. You want to do that in Medi-Cal too. It’s more important than Medi-Cal, but with Medicare, let them know you could do it through the portal and just say, hey, client’s last day of treatment was June 3rd. That’ll trigger them to start finalizing their lien. There’s a couple of steps in the portal or a couple of like options to click, and one is to request a final conditional settlement. And it’s been a while since I’ve looked at it. They might’ve changed the terms. But essentially you want to get that final conditional statement created and sent. And then there’ll be an option for finalizing the lien where they’ll ask, like, how much was the attorney’s fees?

What was the settlement amount? They’re basically calculating the common fund calculation into your lien and the lien is, and this is how much we’re asking.

Miles Cooper: I am going to stop you there because you just used a phrase that we haven’t come across yet. Common fund. Tell us what that is.

Hendrick White: Common fund is basically sharing the attorney’s fees and costs with the health insurance lien, when you negotiate how much the health insurance should be repaid. So essentially in California, most contingency fees are 33%. You’re going to have costs that maybe you will make it 34%, especially in prelit. Per costs aren’t going to be that high. So generally. The common fund is going to be, hey, we need the health insurance to kick in 33 percent of what it cost to hire the attorney and that essentially just means, Hey, you need to at least reduce your lien by 33%.

Miles Cooper: So if the lien was a thousand dollars, reduce it by $333. And if the costs kick it up to 34%, 35 percent reduce it to $340, $350. Okay.

Hendrick White: Exactly

Miles Cooper: Then once you’ve got the conditional settlement letter and you’ve provided the information about attorney’s fees and costs, what happens there in terms of any sort of back and forth with Medi-Cal, Medicare on these types of statutory lien?

Hendrick White: Yeah. So sticking with Medicare. They have their own statutory reduction and it basically equals common fund. It’s rare where I see what they’re asking for. You know, you do the calculation. You’re like, this is on point. Statutorily. This is how much they’re entitled to. There’s really not much to do with Medicare in that sense, unless you have a situation where the client has a million dollars in damages. We only have a minimal defendant’s policy of 15,000. Then you can start talking about equitable waivers and stuff like that. And Medicare has this own waiver policy, which is kind of easy to use. I haven’t done it in a while, but you could click in the portal, it’ll tell you, here’s the rules for waiver. This is what you got to do and what you have to submit. And then, you know, say like, hey, look at our guy has a million dollars in damages. We only got 15. We’re asking Medi-Cal to waive their lien for those reasons. And they’ll give a response on that.

Miles Cooper: Is this what is known as an Alborn reduction?

Hendrick White: Alborn essentially is for California for the Medicaid essentially is the same thing. So Alborn we use with Medi-Cal and basically what we’re looking at is using that the made whole doctrine, which basically says our client was a made whole and you should reduce your lien accordingly because, you know, it’s unfair that there was only 15,000 for our client and our client’s damages are a million.

So what the Alborn reduction does is you kind of figure out the ratio of what his damages are to what he recovered, and then you reduce the lien by that much. And I’ve had successful Alborns where, you know, the lien was like 3,000 and then we ended up paying 28 dollars on. So basically you’re just saying, hey, I think in that specific case, kind of prove that our damages were like 500,000, we had a 3,000 dollar lien and with the calculation, it reduced it down to 28 bucks. I think it was a 2,800 dollar lien. So it went down to 28 bucks and they agreed. Medi-Cal has its own portal, but it’s kind of like you fill out a questionnaire and submit it. You don’t really get any feedback from them. They send letters and they’re very slow with responding to anything.

Before I get to Allborn, I want to kind of just set it up with things that you really want to think about with Medi-Cal. One, is that Medi-Cal requires 120 days before they finalize their lien, from when you either tell them, the last date of service has happened or that you have a settlement happening.

You really want to notify them. I’ve called them and asked them why it takes so long. And they basically responded – and this was years ago – what they do is they do data dumps from all the providers every two months or so. And in order for them to ensure that they got everything in from all of your client’s providers, they request 120 days before they finalize it. So you’re waiting on these data dumps to happen and waiting for them to sort it out. And what you don’t want to do, and I’ve had this happen, is realize that you got your policy limits tendered, you have your lien, but you’re not going to get it finalized for 120 days and the money’s coming in.

So. Best thing to do is make sure you know, your client’s like. I had my last data service yesterday, the next day notify Medi-Cal that, you know, he’s done treating.

Miles Cooper: For people who have not gone through the Alborn process, is this going to court? Is this a letter writing campaign? How does one make that Alborn reduction request?

Hendrick White: Yeah, we do it by letter. Generally, that’s been successful when you have the case that fits in the Alborn framework. It’s kind of a form letter now because we’ve used it so many times, we just plug in the numbers and we describe kind of our client’s situation and why, going over the injuries, any kind of permanent damage and just kind of proving up why we think our client’s damages are worth, say, 500,000 and then applying the calculation to it.

Miles Cooper: Is that a form letter that if somebody emailed podcast at Coopers’ Code dot law, we’d be willing to share?

Hendrick White: Yeah, I think so. Yeah.

Miles Cooper: Okay. What I’m hearing, and I suspect we’ll hear it through the course of this is being proactive with the liens, getting out in front of them, getting information as soon as you possibly can is the best way to arm yourself to be able to negotiate the lien successfully.Is that fair?

Hendrick White: Yeah. Yeah. And especially on the statutory ones, because the lawyers are on the hook on those. We have a duty to make sure those get sorted out. And we do it as a practice for private liens, even though kind of. In the end, it may fall on the client to work out. We’re in such a better position to negotiate that lien than the client, you know, in the end, and it should be part of your practice to handle the liens for the clients, even the ones that aren’t necessarily a statutory duty for the law firm.

Miles Cooper: And what I articulate to our clients is that we, in essence, do two forms of negotiation. We try and get the biggest possible resolution, either through settlement or trial, on the front end. And then on the back end, we’re going to do everything we can to crush that lien because every dollar we can shave off a lien is an additional dollar into that client’s pocket.

You said that the lawyers will be on the hook for the statutory liens. I also want to make clear that If a law firm is on notice of any form of lien, whether it’s private health insurance, self under ERISA or statutory, if we’re on notice and the money goes out the door and the client doesn’t pay it, then the law firm can be on the hook for that. So that’s another reason why you want to be really vigilant about making sure that liens are dealt with as part of the end of the case and that they’re paid directly that you’re not relying on your client to send a check when everything was done.

Now, ready to move on to private health insurance liens.

So I would classify these as everything not statutory and not self funded ERISA. So with private health insurance liens, are those the vast majority of what we encounter?

Hendrick White: It depends on the clientele. Like I said, people who work for like big corporations you’re probably going to see the self funded ERISA if they work for Nike, if they work for Google, any of the tech startups, generally you’re going to see those, they’re going to be self funded ERISA plans. Everyone else, a lot of it’s going to be Kaiser, one of the biggest health providers in America, maybe even in the world. And then, you know, your Blue Shields, your Anthems and Cigna. So those are all going to be private.

Miles Cooper: So what approach do we use there as far as lien reduction techniques?

Hendrick White: To back it up, when you first get the case, you want to try to figure out, are we dealing with a self funded ERISA or not? We do that with a series of letters. We’ll send a form letter. Asking for them to disclose whether or not this health plan is self funded. The other way to do that is to look it up on the labor, the government labor’s website, there’s a section where they got a mark on their form that they file, whether or not it’s self funded or not.

And that’s another way to double check. So once we figure that out, normally they’ll say, yeah, this is self funded. Not to go down self funded road yet. If they say it’s not, we get the lien set up and then now we’re dealing with CCP 3040. Which is a statute that essentially calculates the common fund. It codified the common fund doctrine.

Miles Cooper: And how do you do that?

Hendrick White: We do that with a series of letters. We’ll send a form letter sking for them to disclose whether or not this health plan is self funded. The other way to do that is to look it up on the labor, the government labor’s website. There’s a section where they gotta mark on their form that they file, whether or not it’s self funded or not.

And that’s another way to double check. So once we figure that out, normally they’ll say, yeah, this is self funded. Not to go down self funded road yet. If they say it’s not, we get the lien set up and then now we’re dealing with CCP 3040. Which is a statute that essentially calculates the common fund. It codified the common fund doctrine.

Miles Cooper: So going back and restating common fund, this is the contingent fee is 33%. The folks, the health insurance company that’s got their handout, they have to reduce their amount by the attorney’s fee and the costs.

Hendrick White: Yeah, pretty much. So say that you have a hundred thousand dollars settlement. The lien is 40,000, they can’t reimburse more than one third of that lien. So they can’t get more than 33 and a third. Or, the other scenario is, you know, we have a hundred thousand dollars settlement and the lien is only 10k it’s under one third. They have to reduce one third, so they’ll pay at most 7,500.

Miles Cooper: Are there techniques that are used for situations where the insurance amount is very low and the injuries are very high with private insurance companies?
Are there techniques that you found successful in trying to get more than just a third reduction?

Hendrick White: Yeah, so there’s a checklist you want to go through. One, we already talked about, you make sure everything on that lien is actually related to the incident. That’s the first thing you want to do. And then, if there’s stuff on there that’s not good, get it taken off, get a new finalized lien, a revised lien.

The next thing you want to do is you want to look at equitable arguments, see if made whole applies to this. If you’re looking at a million dollars in damages and we got 15k and your lien is 10k that you have a good argument to get that would lien waved.

Miles Cooper: Now haven’t most private health insurers contracted around the made whole doctrine?

Hendrick White: And that’s another thing that I wanted to bring up is you want to get the excerpts at least from the insurance plan, just to see what’s in the contract. Like I’ve come across some non self-funded Erisa plans where they actually have contracted in. And it’s only happened once and I’m still dealing with it, but they’ve contracted in that they’re entitled to recovery from the first party.

Miles Cooper: Define first party made whole doctrine?

Hendrick White: For like UIM recovery.

Miles Cooper: So underinsured motorist.

Hendrick White: Definitely underinsured motorist. That’s what the situation is here. And I’ve worked with other like lien, lien experts in California, trying to figure out ways around it and basically it’s in the contract. And I seen this once and I was trying to find a way to say that, hey, that goes against like California insurance code. They’re not buying it. It’s going to come down to just negotiation really to see if we really have to pay any money on the UIM recovery. So those are all the things that you want to look at so you can prepare for them. Maybe you do want to hire a lien expert to help you kind of navigate around that if you need to.

Miles Cooper: That’s useful.

Hendrick White: Yeah.

Miles Cooper: Because it’s one of the interesting things about this area. Every time you think you’ve seen everything in liens, you see something new. Is that a fair statement?

Hendrick White: Yea and I had a hard time wrapping my head around the fact that they could do that ‘cause I had never seen it before. Most liens, even most statutes, it’s going to limit everything to the third party. So if you think about it, you’re paying a premium for that. And I understand that the health insurer should be able to recover from the defendant’s policy because the defendant hurt your client. That makes sense. But you’re paying for this extra to make sure that you have enough coverage for when that defendant doesn’t have enough money and now your health insurance is saying, yeah, I get a piece of that too.

To me, that kind of feels like, is there a way to figure out how much you paid extra for that and deduct that from what they’re getting from? I don’t know. It can happen. I have a case right now where that is happening.

Miles Cooper: Sounds like the kind of case where if it’s just one carrier who’s doing this, maybe worth evaluating whether there’s a tech relief action or potentially a class of people who have been improperly treated.If this does indeed violate the insurance code

Hendrick White: Yeah, I had a hard time finding anything in the code and I’m not saying it’s not there, but working with other lien experts, trying to use the code and having them shoot it down. Yeah, but I think it comes down to the cost benefit for the client on figuring that out. Really this isn’t a very big lien in this case. So to litigate this, I don’t know if it makes sense. That’s the other factor you have to get in – like, how far do you want to take this?

Miles Cooper: You don’t want a hundred thousand dollar litigation tab for a thousand dollar lien.

Hendrick White: Yeah, exactly. So that’s the other factor there, but something to look out for and something you want to have time to think about while you’re working the case.

Miles Cooper: Are there other tools that you’re working on a checklist in terms of things to look at? In working towards reducing private insurance leads, non self funded, non statutory.

Hendrick White: I think like, other than running through a little checklist, the only other thing is just appealing to the lien holder. Like, hey, look at the situation our client is, you know, this is, this is the only money that we can recover for them.
We’re willing to reduce our fee for the client. We need you to chip in too. There’s other kind of like heartstring appeals that you could do. Maybe they work, maybe they don’t.

Miles Cooper: It’s interesting because I think of nine times out of 10, when we have reached out to a health insurance lien holder and said, look, what happened to our client is awful. There’s not enough insurance. It was tendered quickly. We’re not going to charge our fee, we’re going to waive our fee. We’re asking you to waive your lien as well. Nine times out of 10, the response from the health insurance is that’s very civilized of you. We’ll waive it as well. One time out of 10, I have heard, ah, you were waiving your fee. Well, gosh, then we don’t really need to reduce our lien any further than we absolutely have to because they’re getting more money from you anyway.

Hendrick White: Yea. And then you can start getting into the territory where 30, 40 says if the client doesn’t have an attorney, the health insurance is entitled to 50%. So you got to be careful with that.

Not saying that they would do that, but if they have attorney, the common fund is better for the client. That’s another, I guess, uh, kind of talking point with the client before you sign them. Like, hey, you’re going to have to pay this lien no matter what. They’re entitled to 50 percent of their lien if you don’t hire an attorney and roughly 33 percent of the lien when you do hire an attorney, according to the 340.

Miles Cooper: We ready to get to what I refer to as the boogeyman of liens, the self funded ERISA?

Hendrick White: Yeah. Getting a self funded ERISA lien. First, you want to figure it out that it is a self funded ERISA. You want to request those docs, you want to get the SBD, the Summary Benefit Description, get the whole plan. Sometimes they send the excerpts of like, here’s the part of the contract that just relates to our recovery rights. And you definitely want to take a look at those and see what you got.

Miles Cooper: I’m going to give you some information that I recall and I’ll confess while I engage with some of the lien components, this point, I’m not on front lines day to day and a lot of techniques we’ve learned from some of the, the state experts in terms of self funded ERISA liens.

One of the things I remember from that is you want to get a letter out to the employer demanding both the summary plan description and the full plan. And they have, I believe it’s 30 days to respond to that letter. And for every day that they don’t respond to it, which oftentimes happens, there is a penalty that is assessed against the lien. And that is one of the tools that one uses to negotiate and reduce a self funded..

Hendrick White: Right. Yeah. The question there though, is, how are you going to enforce that? There’s avenues of force. I’ve never gone down the road of enforcing them for being late. It’s not often they’re late. The other thing is how much is it going to cost to enforce this? Do I have to go in federal court for this? Stuff like that. So you definitely want to incorporate that language into your letter to the health plan administrator. But nonetheless, yeah, you want to get that stuff in. Get it reviewed, see what you’re working with. Most of them are going to contract out of common fund, made whole for sure. All that stuff is, it’s going to be full. We want everything that we pay for no matter what.

Miles Cooper: And I’m going to throw in with this, the other ones that you see beyond the large tech employers that you talked about, Google, Meta, Nike, where I’ve seen self funded ERISA plans that are just truly draconian are union trust funds. And the union trust funds oftentimes not only say that they’re entitled to every dollar, but to the extent that you get money for your future medicall, they don’t have to pay for your future medical and they require you to the member to sign off on this. MPI, Motion Pictures Industries is another self funded ERISA that takes some very aggressive stance and actually has been the subject of significant appellate court litigation in that area.

Hendrick White: Yeah. With the unions too, a lot of those aren’t funded by a company like a Google. They’re not paying money into the fund. Every member of that local union’s paying into it. To me, actually makes me feel better. I’m like, okay, I’m, I’m putting back into all the union members, what they’ve chipped in. They’re going to get reimbursed. Okay. That’s okay. But then when you’re looking at like, you know, these big billion dollar companies, you’re like, okay, is this really going to hurt you? This is your employee that’s worked here for your put in X amount of years. And we have this catastrophic injury and you getting your 200,000 or 20,000, is it really going to hurt you?

That’s a little different than the unions. I get the union argument, but yeah, the union ones are tough to deal with. We’ve had a couple of cases with that and we’ve, we had a recent FPI one too. Luckily that lien was so small that I didn’t really push hard on trying to fight with them. I gave a couple back and forths trying to move it, talk to the client and I was like, you know, it, it’s under 10k. What do you want to do here?

Miles Cooper: Where you see the big struggles are where you’re looking at 200, 300, 400,000 dollar in lien. And those are situations where as, as successful as we have been as a firm dealing with liens, when you get into the big numbers, oftentimes it can be beneficial to bring in like a self funded or resilient specialist.

Hendrick White: Yeah, Yeah, I highly recommend that when you get above a hundred K and, if you got 100, 200 K lien and you’re looking at like 500,000 to 1 million in policy, it’s going to be worth it. It’s going to be worth it to pay the cost on the expert.

Miles Cooper: And what is it that they are able to do that those of us who are more generalists aren’t able to do? If you were able to just kind of say what the difference is in terms of their specialty.

Hendrick White: Yea, other than just having experience and doing this daily for different law firms, those experts know the inside and out of the insurance code. They know the federal ERISA act, and you’re going to spend hours and, uh, you’re going to spend hours trying to figure out what they know on the top of their head.

They have their letters already formed out and they know how to approach each kind of situation. If they can reduce your 200,000 lien by 50k and they’re going to cost 10k to do that, I think it’s worth it.

Miles Cooper: Cause otherwise with a self funded arrest, you really have no…-+

Hendrick White: Yeah, there’s no ammunition. It’s basically like federal law says is we get everything, and that’s what the law says. It’s ya gotta find ways to get around it.

Miles Cooper: Yea. So on self funded ERISA, have we covered everything that we need to cover?

Hendrick White: Yeah, just summarize, figure it out, find out what their rules are in the contract. And from early on, kind of determine if you need to hire an expert for that situation to help you out to help navigate that. See if the case it’s appropriate for the case you’re dealing with.

Miles Cooper: At the beginning of the, our conversation, I made reference to disability insurance and disability insurance oftentimes also has subrogation rights. Gets treated in essence the same way as any of these other health insurance liens needs to be negotiated with to the extent that we are put on notice. How often do you see clients who are recipients of some form of disability insurance? And let me be clear when I talk about disability insurance, I’m not talking about state disability or SSDI. I’m talking about somebody who pays, you know, 500 a month for, if I get injured and I can’t do my job, I have something that kicks in until I can return them up to work.

Hendrick White: Yeah, you don’t see it that often. I have had it maybe in one or two cases in the past year, compared to dealing with self funded ERISA or even private health insurance have been really easy. I think in both cases, we had bigger damages than total money available to recover from and not very much pushback on a simple letter asking them to waive.

And those liens weren’t very big either. I think we’re looking at like 200- ish, you know, for the short term disability benefits that were actually used. And I think the success on that came down to how big the damages were compared to what was available to recover from. So it wasn’t made a whole doctrine.

Miles Cooper: I’m going to say at this point, there’s one kind of big area that we have intentionally omitted and that’s workers comp liens. And the reason we’ve done that is because there are some very specific tools and tactics for reducing workers comp liens that are more complicated and quite honestly, just a completely different category of negotiation. Is that fair?

Hendrick White: Yeah, I would say so.

Miles Cooper: Are there other things about statutory liens, private health insurer liens, self funded ERISA liens that you think people should know as they’re trying to do the best they can for their clients.

Hendrick White: Yeah. I think only a kind of like a little subtopic is be on the lookout for clients that don’t have health insurance and, you know, they get a hospital lien or a county lien.

Know that those type of liens Are going to be limited to third party recovery only. So you don’t have to worry about the one P one P means first party. I’m generally mean you, I am, or at least for California, Oregon gets a little trickier with one piece and then statute CCP 30,45.1 kind of dictates how you deal with those, um, those, uh, hospital liens that aren’t tied to a health insurance.

They have their own kind of like calculations that you, that you can use. And then in San Francisco, know that anything was SFGH is going to get kicked to the Bureau of Tax Office, which turns into a fun little fight with them. Especially because what I’ve learned from a case a couple of years ago, and I’m sure people already knew this, but I didn’t, when you don’t have health insurance, like our client was on a vacation from another country, didn’t have American health insurance at all. And, um, he gets in a bike accident, gets taken to SFGH, they do a couple x-rays, he gets admitted in the ER and he comes out with like a 40,000 lien.

Miles Cooper: Wow.

Hendrick White: He’s there for six hours and they release him and it can be helpful in a way that also your damages are huge for an injury that if he had health insurance would have, you know, the medicall would probably have been like 10K, 8K. Now you have 40,000, but then you got to deal with the city and county of San Francisco, paying that back. And at first I was like, how is this even a standard bill? Like, how is it 10k for this? And just kind of going back and forth with the attorneys over there. I learned that all of SFGH’s customary charges are codified in a San Francisco health ordinance, which makes it, how do you fight that?

I was looking at like, okay, so we got this MRI, they’re charging I forget what it was, 6,000. I’m like, okay, if you look at the charges in the region, they range around 2,000 to 2,500, why is this like triple? They’re like, well, it’s in the law. It’s a double edged sword. It can help you get your damages up and then also you got to deal with that in the end. If you do have SFGH per the, the health ordinance, you have to contact that office.

Miles Cooper: You meeting the attorney, the firm.

Hendrick White: Yeah. Yeah. You got to notify them. I think they say like something crazy, like within 10 days, but you know, sometimes it takes a lot longer to figure that out. But yeah, you want to notify them, even if your client has insurance. So I’ve seen like the 350 dollar ambulance bill co pay for if they take SF fire department EMS. That copay shows up at the county’s tax office delinquent on…

Miles Cooper: the Bureau of Delinquent Revenue.

Hendrick White: That’s the word Bureau of Delinquent Revenue. That’s 250 dollar copay might show up on the lien there. So yeah, you just want to run it by them no matter what. If your client goes to SFGH, just automatically think like, hey, I got to notify that office just to see if they have anything.

Miles Cooper: And if San Francisco is doing these kinds of oddities, it’s certainly likely that any sort of county hospital that you, you come across is going to have similar oddities. And the last thing we want is for our client to have some sort of delinquent revenue bill or unknown lien hanging out there that shows up to bite them sometime down the road.

Hendrick White: Four years down the road or something, you know, so yeah, just want to get ahead of it. Again, getting ahead of it from the onset is the best practice.

Miles Cooper: There is one thing that has come up in conversations with clients about health insurance liens. Have you ever had a client who says, well, what if wink, wink, nudge, nudge, I never get a letter from my health insurance company in terms of putting them on notice. Have you heard or interacted with clients who are inferring that, you know, well, I don’t want to have to deal with this lien. I don’t want to have to have more money come out of my bill. What if I don’t tell you that there is some form of lien recovery?

Hendrick White: Yeah, I mean, that gets tricky because you work for the client and on the private health insurance liens, they have for their, you gotta, you have to advise them like, hey, lookit, most likely your contract says you got to notify them within X amount of days that you were injured, whether or not you want to tell them or not. And we’re going to do that for you. We work for the client. I don’t know if they say don’t and we don’t have some statutory obligation to do to that’s a question for the attorney to think about.

Miles Cooper: I will say from my perspective, the counsel that I provide in those situations is I’m not the kind of lawyer who is willing to run that risk for you. Because if you fail to advise them and you don’t pay a lien that was obligated and something happens down the road. Six months down the road, you get diagnosed with cancer and you end up with millions in treatment. That’s the time when health insurance entities start looking very closely at their insured. And if they can find a way to deny coverage, they absolutely will. And in terms of being penny wise and pound foolish, you pay for insurance for a reason you want it to be there. You don’t want it taken away. You truly desperately need it.

Hendrick White: Yep. Exactly. And also we’re, as attorneys, we’re in the best position to get them the most favorable outcome. It’s better though. Hey, at some point it’s probably going to come down the road on you and having us deal with it is probably going to be the best outcome for you in the end.

We understand what they’re entitled to for recovery, et cetera. I haven’t had a client tell me that in a long time that they wanted to deal with it themselves. So most of the time they’re like, yeah, handle it for me. Thank you.

Miles Cooper: And I would say oftentimes the type of client who asks that is the type of client who in a initial interview may not end up being a client. They give off some of the hallmarks of things that may not be a good fit for the way that we approach law.

You mentioned not wanting to, to have a lien come back at some point down the road when they have attorneys affirmed they’re in the best position to be able to resolve the lien. One of the other things that we make sure we communicate with folks is that, look, if something shows up down the road, even if it’s, you know, year down the road, two years down the road, we’re your lawyers, we did your case, don’t deal with it yourself. Call us, we’ll be in better position to be able to knock it down than you are.

Hendrick White: Great point. Yeah. You want to let them know that you’re still in it there for them. And that does happen and you want to minimize that. And it happens sometimes in weird ways. For instance, like you could pay the final lien through the, you know, the settlement and that check doesn’t show up.

And no one knows that it didn’t show up and the lien holder doesn’t say anything for two years. And then all of a sudden the client calls you and say, hey, I just got this letter from so and so saying that I owe them money on this. I thought you handled that. And we’re like, oh yeah, looking through the file. yeah, we did. We sent a letter on X day. So another good thing to do is have a procedure on when you’re settling cases and closing out the case that even though you send that check to Equian, you want to make sure you follow up, maybe a week later and get that confirmed in writing that they received that check.

And it’s always good to just keep really good notes with liens in your file for that situation where two years down the line, you’re scrambling, trying to remember what exactly happened in that case and figure out why there’s still a lien out there when you know, your recollection is, yeah, I pay all liens. Like, I don’t know why this wouldn’t have a pay. You want to have your paper trail and have that in writing and confirmed. We do it 30 days. We confirm that they receive payment in 30 days. We set ticklers. Our case managers do. Attorneys set ticklers for 30 days after sending the lien check out and confirm that, hey, we received this.

Miles Cooper: And do you do that? So third party insurers, so they write a settlement check. It’s a hundred thousand dollar policy. They, the let’s call it Mercury Chubb AAA, they’ve had bad experiences with lawyers saying they will pay a lien directly when they’re either on notice or believe that there may be a lien. They decide they want to send a check directly to Kaiser, Equian, Blue Shield, whomever. Do you use a similar process when the check comes directly from the carrier for the negotiated lien amount?

Hendrick White: So that question, most of the time you see that with statutory liens, Medi-Cal, Medicare. We’re on the hook, client’s on the hook, and the third party’s on the hook on those liens. So they won’t do a hold heartless, you know, type letter where they’ll be like, okay, we’re sending a separate check to Medicare. And that gets tricky in the end if you haven’t resolved the lien and you tell them what Medicare resolved.

So you got to kind of tiptoe around that different ways. Like you could have them send the Medicare check to you and then, you know, while you’re still negotiating it. And then when you finalize that lien, have them cancel that check and reissue for the amount that is that you actually resolve the lien on. Different ways to do that. I have seen it where on private liens for Equian and where they’re like, yeah, we’re not going to take your word that you’re going to pay the lien. And a lot of releases, we’ll release the defendant from that or the third party company or third party liability from that. But I have seen it in recently a few times where they’re like, nope, we’re going to send Equian the check. Tell us what it is. And so that holds up the settlement a little bit. And I kind of treat it the same way as I would with Medicare. You could fight it and be like, why are you doing this is you really don’t have, you’re not on the hook for this, but I’ve seen it on like smaller, like cases.

Miles Cooper: I get the impression that they’ve had bad experiences from what I’ve described as shady lawyers, lawyers who are less diligent about following through on things and so with small policies and chumpier carriers, those are the ones who tend to be more concerned about it.

Hendrick White: Yeah, there, it must be a cost analysis for them. Like, hey, we’re spending X amount of money on figuring out this problem and to nip it in the bud, we’ll just. We’re paying the lien. Yeah, definitely see that happen.

Miles Cooper: Well, anything else do you think we should cover on a lien front for people who are trying to do the best for their clients?

Hendrick White: No one wants to do liens. It’s kind of the bane of the job. I became the lien guy because no one wanted to do it. And I was like, I don’t know, I’ll figure it out. And there’s always something new in lien law, I guess, or, you know, that part of the case that you could learn from, and I recommend going to the lien talks through your county bar or whatever, um, you know, or the CAOC, if they have some presentations happening during their conference. SF TLA, just stay it up and learning from the experts that do those presentations can go a long way.

Miles Cooper: Well, what I’ll say is while no one necessarily likes dealing with liens, they can have, because every dollar saved on a lien is an additional dollar for a client. It has huge benefits to the client. And from the perspective of a full service law firm, a firm that really approaches this with a process and a passion is one that’s going to do a better job for the client overall.

Hendrick White: Oh yeah. And then on your settlement report, you point out that, hey, reduce your lien 80%. Or like in that Allborn situation, Hey, we reduced your lien to 28 dollars. You know, the client’s like, wow, that is awesome. Even though probably wasn’t the best outcome for that client in the Allborn situation, uh, at least, you know, they can be like, wow, they really knocked that down to pennies.

Miles Cooper: Well, Hendrick, thank you for all the wisdom on the lien front and for everyone out there, thank you for listening today. Please email us at podcast at with questions, comments, feedback, and suggestions. If you like what you heard, please share us with a colleague and leave a review on your podcast platform of choice.

To all of you doing justice out there, happy hunting.