Legal Advocacy Efforts Protect Rights of Healthcare Providers
AUGUSTA, GEORGIA – (AUGUST 31, 2017) North Carolina providers scored a big win this month as the NC Court of Appeals reaffirmed an insurance company’s duty to protect the interests of medical lienholders by issuing payment directly to providers when resolving personal injury claims with pro se claimants/patients. Nash Hospitals, Inc. v. State Farm Mutual Automobile Insurance, Co., COA16-532.
The underlying facts were straightforward. Nash Hospitals (Nash) treated a patient injured in an automobile accident caused by a State Farm insured. On Nash’s behalf, Argos Health, Inc. (Argos) sent State Farm notice of its medical lien pursuant to N.C.G.S. 44-49 and 44-50. State Farm reached a settlement with the patient/claimant and issued a multi-party check for the total settlement amount, made payable to the claimant, Nash, and another lienholder. The check was sent directly to the claimant, who subsequently did not seek to negotiate the check with the other named payees. When Argos learned of the settlement, it made repeated demands to State Farm to reissue a check made payable solely to Nash in an amount necessary to satisfy Nash’s medical lien. State Farm refused, stating the multi-party check protected Nash’s lien and told Nash to contact the claimant for payment.
On August 25, 2014, J. Christopher Dunn of Creech Law Firm, P.A. (now Creech, Dunn & Perry, P.A.) and Robert L. Allgood of Argos filed suit on Nash’s behalf against State Farm alleging violations of the medical lien statutes and that State Farm engaged in an unfair or deceptive trade practice. Almost three months after the lawsuit was filed, State Farm sent a check payable solely to Nash for the total amount of the lien. Nash refused to accept the payment as satisfaction of the lawsuit or the underlying lien, opting instead to proceed with its lawsuit to prevent State Farm and other insurers from engaging in similar conduct in the future. Nash and State Farm filed motions for summary judgment, and on February 15, 2016, the trial court issued an order granting Nash’s motion for summary judgment. State Farm then timely filed an appeal.
On August 1, 2017, the Court of Appeals affirmed the trial court’s ruling, stating that an “insurance company’s failure to retain, for payment directly to medical lienholders, their share of proceeds from a settlement with a pro se claimant violates these statutes." Additionally, the Court found that State Farm committed an unfair or deceptive trade practice by “failing to pay directly to [Nash] its pro rata share of funds for several months despite repeated demands." The Court stated State Farm’s “failure to notify the medical lienholders of its settlement, and [State Farm’s] direction of Nash Hospitals for months to seek its recovery from [the claimant] were not only unfair, but also deceptive."
The impact of this ruling is substantial…it removes any doubt that an insurance company is required to pay lienholders directly prior to disbursing any settlement funds to a pro se personal injury claimant…
– Wilson Allgood
Senior Vice President, MVA Services, Argos Health, Inc.
“The impact of this ruling is substantial,” said Wilson Allgood, Senior Vice President, MVA Services at Argos Health. “It removes any doubt that an insurance company is required to pay lienholders directly prior to disbursing any settlement funds to a pro se personal injury claimant. This duty is absolute and can only be met with checks made payable solely to each medical lienholder. If a provider encounters a situation where an insurer pays a claimant directly and without regard to its lien, the provider should immediately demand payment from the insurer and also seek to enforce its rights by filing suit should the insurer refuse to reissue payment. Additionally, the Court placed a duty on insurers to notify lienholders when the insurer settles a personal injury claim. This opinion is an excellent tool to use when requesting accurate updates from insurers on any pending personal injury claims.”
About Argos Health
Argos Health is a revenue cycle partner specializing in the management and resolution of complex claims. They work with hospitals, healthcare systems and physician groups to drive reimbursement and increase claims recovery through their core services of workers’ compensation, motor vehicle accident and other complex cases. To learn more visit: www.argoshealth.com.