We have rejected a number of tort cases because Medical Assistance made payments for the victim’s outstanding bills. Why? Because the state simply refused to significantly reduce (or at all) its lien to account for attorneys’ fees. Sure, DHMH could reduce or waive their lien if it will cause “substantial hardship.” But “substantial hardship” was not defined and I think we had a very different definition than the subrogation folks at Medical Assistance.
It might sound a little heartless but it is the exact opposite. The Medical Assistance problem did not impact our attorneys’ fees but did have a real impact in how much money the client could recover in the case. If we don’t think we can make the client happy at the end of the case, we are not going to pursue the claim, regardless of how much money we think we can make on the case.
But things are now a lot better because of new rules that have adopted by the Department of Health and Mental Hygiene and codified as COMAR 10.09.83. Pursuant to these new regulations, the state will now allow for attorneys (I’m not sure about pro se plaintiffs, I need to read it again) to negotiate a reduction in the lien to account for the victims’ legal fees.
This new plan is not a straight reduction and it certainty seems to provide greater relief in larger cases. The formula is a little bit complicated but one thing is clear: there will be reductions of Medical Assistance liens in almost every tort case. This will be good in almost all Medical Assistance cases… and will be great in some.
(I knew this rule was coming, but I’m embarrassed to say that this rule came out at the end of May and I’m just learning about it now. What? You didn’t know about it either? I feel better.)