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Thursday, July 22, 2010

The Automobile Injury Patient: How to get paid

Many doctors who have treated personal injury victims have themselves become victims due to nonpayment of the medical bills. The desire of physicians to help the personal injury patient is often peppered with the fear that the mounting bills will not be paid or may not be paid for several years. However, there are ways to significantly reduce the risk of delayed or nonpayment for this type of care. In fact, the automobile injury case affords the doctor many avenues of insurance coverage not available in other types of case.

This article will discuss the best means of protecting your rights to be paid, utilizing available insurance and avoiding the pitfalls inherent in these cases.

Know Your Patient's Attorney
Contrary to political grandstanding, not all injuries are compensated by the court system through awards of millions of dollars. In fact, a great number of juries render verdicts for the defendant and give no money to the injured party. Ask the patient's attorney for an evaluation of the likelihood of success, especially if you are asked to wait for your money until after settlement or trial. Your bill is an extension of credit and you are entitled to consider whether you should invest in this case. A skilled attorney will want to cooperate with the doctor for many reasons including the need for medical reports and expert testimony at trial.

The good attorney should search for and help process insurance in order to pay the medical bills as they accumulate. Unfortunately, many attorneys believe that their only obligation is to handle the legal case without regard to payment of the medical bills. Even worse, many lawyers will help clients obtain the insurance coverage payments and advise them that they are entitled to keep this money even if it means a failure to pay the doctor.

While competent counsel cannot guarantee a win at trial, an inexperienced or ineffective attorney will have a difficult task contending with the high-caliber law firms hired by the insurance companies. Even if no suit is filed, an attorney who does not specialize in this area of law will generally not obtain the same level of settlements as experienced counsel. Finally, be extremely skeptical of the patients who are handling their own personal injury cases; insurance companies will take advantage of this situation. Doctors treating self-help patients should insist on "pay as you go" or refer them to a lawyer.

Medical Payments Coverage
Most automobile insurance policies have medical payments coverage, which is a "no-fault" source of payment for medical bills. If this type of coverage is included in a Virginia policy, there must be a minimum of $2,000 available (typical coverage is $5,000) over a maximum period of 3 years treatment. Policies issued in other States have similar provisions. The medical office should process these bills to obtain direct payment to the office. Allowing the patient, to process these bills may result in loss of this income. Before you rely on the attorney, find out his philosophy in this respect because many attorneys consider this money to be the property of the client. The patient's insurance agent can explain the amount of coverage available.

Do not expect the insurance company to offer information regarding the availability of coverage. Quite often, the insurance company will tell you to go to the liable party's insurance even when there is medical payments coverage. An attorney's call or letter should overcome this difficulty.

Reimbursement is only required for "reasonable and necessary expenses." Under this standard the insurance companies regularly claim that the treatment was excessive, that certain procedures were not needed or that the bills were abnormally high for the type of injury. They will request the medical records, narratives and other proof; give them what is reasonable, but do not accept a determination not to pay. The doctor's office must often advocate on behalf of the patient and should get the lawyer to insist on payment.

Do not assume a lack of coverage. Medical expense coverage may be available to many unexpected parties, such as relatives of policyholders even when they are in someone else's vehicle or are pedestrians. Read the policy. Ask the lawyer to make inquiries.

Health Insurance
Under Virginia law, medical bills must be paid by the health insurance carrier even if there is a personal injury-third party claim. Health insurance should be handled in the normal manner.

The medical office should not agree to any reimbursement to the health insurance company by way of assignment, subrogation or other type of pay back. Except in limited circumstances, health insurance policies issued in Virginia cannot require repayment to the insurance company. Therefore, do not reimburse any insurance company for payment received on a paid bill without the specific permission of the patient, as this may cause tremendous problems in obtaining return of this money by the patient from the insurance company.

Lien or Assignment
The patient and the lawyer should always be required to sign a lien/assignment form which requires the lawyer to pay the medical office out of the patient's portion of any settlement or judgment. Be sure the form is sent to the law firm. Current billing should be sent in order to be sure that the latest amount is paid.

Oral promises to pay out of settlement are not enforceable. Just sending the bills to the law firm will only amount to a total lien of $300 under the Virginia Code. Do not send this billing and medical records information directly to the insurance companies, unless instructed to do so by the law firm.

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The above is not meant to replace legal counsel. To speak to a lawyer at Gross & Romanick, contact us today by calling 703-273-1400 or by filling out our online Information Request Form.

Monday, July 12, 2010

Collecting the Professional Debt: Discretion with Aggression

Harry has been a client of your firm for several years. Eventually, you have come to regard him as a trusted client who promptly pays for services rendered. This morning he called you with an urgent message. It seems that he is involved in a large matter and your fees will go well beyond any amount previously billed to him by your firm. If you are successful, you know there will be funds available to cover your fees and costs, but you are not certain it will succeed.

While all businesses have credit extension concerns, professionals have factors to consider that require special considerations. The services of a lawyer, doctor, CPA, architect and other professional are unique and, once engaged, cannot generally be suddenly terminated. The savvy professional improves the chances of avoiding collection problems by conducting prudent credit checks like other businesses, even for existing clients who request more extensive credit.

Prevention

Additionally, the professional should candidly discuss the prospects of success in the enterprise, e.g. the risks of the medical procedure or the likelihood of reversal of the IRS ruling. Explain in detail the estimated fees and what factors can effect these charges. Do not forget to reveal expenses such as photocopies, travel, filing fees, investigations, subcontractors, etc. Tell the client how to keep the total bill down. Very importantly, tell the client when bills are expected to be paid. Not only will these types of explanations allow the client to budget, but it will avoid surprising the client with an unexpectedly large bill.

Do not assume that your client can afford your services. Ask for an upfront retainer even with a good credit history. Bills can be monthly, at project stages or other predetermined dates. For example, architects normally obtain a 5% retainer, 15% upon production of the schematic design, 20% upon detailed sketches drawn to scale, and so on with varying percentages due at specific phases of construction. Put the payment agreement in writing to avoid differing recollections.

Unless the matter is handled on a total contingency fee, the final bill should not be the majority of the account due. The final bill is the most difficult to collect, especially if the work is unsuccessful or the bill is unexpected.

Dunning the Client

When, despite your efforts, your receivables become delinquent, the part of the business that most professionals find disagreeable has to be undertaken. Most lawyers would rather argue before a jury than with a slow paying client. Furthermore, if you too vigorously emphasize prompt payment of bills, your client may feel you are more concerned about your fees than his case. Still a balance must be struck between a too-strident policy, at the cost of a lost client, and one that is too permissive, at the cost of profitability.

When it becomes necessary to go after a delinquent client, the question arises as to how the contact should be made and who in the firm should make it. A carefully edited letter, which is sent soon after payment is due, can be a good reminder. Relationships will not be damaged if regular, reasonable reminders are provided. In some cases a letter will not be sufficient and a telephone call must be made. A call from the professional handling the matter is not advisable because it can tarnish the working relationship and can be very awkward for the professional and the client. The bookkeeper or a secretary, whose duties are removed from the client, should place the call. As a final effort, an associate or partner should speak to the client about the implications of a failure to pay.

Firing the Client and the Fear of Counterclaim

Firing the nonpaying client creates a set of particular concerns to the professional.

1. Do you have the right to discontinue services? For example, can an orthodontist leave complex and potentially dangerous devices in a patient's mouth?
2. Must the client's records, books and your work product be given over?
3. Are you going to be sued for malpractice despite competent efforts to that stage of the work? Should you worry about the next psychologist ruining all the progress and you getting the blame?

Answers to many of these questions can be obtained from professional associations and by reference to ethical codes; get a written opinion for your files.

If you perform your work to the best of your abilities and meet the standards of your profession, sue your former client if they owe you a significant fee. Threats of a counterclaim based upon negligence are usually just a ploy to avoid payment. Of course, you will need some nerve and confidence in your performance, as well as good documentation. Finally, hire a good collection lawyer who can be your professional.

A Final Thought

Remember a line from the classic 1967 movie Cool Hand Luke: "What we've got here is a failure to communicate." If you keep the lines of communication open with your clients, you will establish mutual trust and will probably be rewarded by prompt- paying clients.

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The above is not meant to replace legal counsel. To speak to an attorney at Gross & Romanick, call 703-273-1400 or fill out our Online Information Request form here.

Tuesday, July 6, 2010

Parking Spaces... Assigning Equals Licensing

Before you start assigning your tenants parking spaces, be sure you are not excluding anyone. In a recent Fairfax Circuit Court case a judge struck down an assignment of parking spaces to non-garage owning association members. The garage owning members took the association to court, which found that the association was not propounding a rule, but in fact it was giving a license to its non-garaged owners. Because the lots were assigned only to some owners and not others, those owners with the assigned spots were able to exclude the other owners from the use of those spots in the common area. This exclusion is the essence of a license. The Court concluded that the community association did not have the authority to issue a license to its owners and ruled in favor of the excluded owners.

One would expect this ruling to apply in many other parking assignment situations.

The above is not meant to replace legal counsel: if you'd like to speak to one of the attorneys at Gross & Romanick, call us today at 703-273-1400 or fill out our online Information Request form.