No-Show, No-Dough!
Recently, I experienced a unique situation regarding an inter-pleader motion that was entered by the attorney for a patient injured in a motor vehicle accident.
For those unfamiliar with an inter-pleader motion, when the insurance coverage of the liable 3rd party is not sufficient to pay the full medical expenses incurred by the patient and the medical providers refuse to negotiate a reduced settlement with the attorney, the patient’s attorney may file for an inter-pleader motion. (In this particular case, the 3rd party had also filed for bankruptcy protection; therefore no assets could be touched.)
The purpose of the motion is to have the court/judge decide which of the providers receive payment and how much. Usually the amount the provider receives is pro-rated based on their charges in relation to the total medical expenses. Hence, the provider that has the most dollars invested in the patient's care usually receives the larger portion of the available funds.
You may ask, what is so unique about this? In the hearing I attended, there were over 20 medical providers each seeking their share of a $20,000.00 settlement. The liable 3rd party carried the minimum Texas liability coverage. The patient's attorney, via fax and registered-certified mail, notified all the providers of the hearing and all providers were advised to have their own legal counsel or representative attend. Now, here's where it got interesting!
Out of the twenty-plus providers that treated the patient, only two showed up for the inter-pleader hearing. Guess what? The bulk of the proceeds were allocated to those two providers. The others, unless they had a letter of protection (LOP) or a duly perfected hospital lien, lost their financial interests in the matter by not attending the hearing. Most of the other providers had not taken the measures of obtaining either a letter of protection or a lien.
Not only did they not get their pro-rated share of the settlement, but also by the judge's decree, they cannot bill the patient for any portion of the services they rendered. The judge, as most usually do, awarded 1/3 to the patient, 1/3 to the patient's attorney and 1/3 to the medical providers that were present at the hearing, and those very few with LOP's or liens. The court has the final say in these matters.
Having to sacrifice two-thirds of the settlement to the attorney and the patient is not a situation I was particularly pleased with. Especially considering that my client hospital was the first to treat and stabilize the patient in an extreme trauma environment; thus they had the largest monetary interest. Had I not been there with my lien in hand it would have been a complete loss. By being there I walked away with the largest portion of the settlement for our provider.
I can't stress enough the importance of obtaining at least one of these instruments in all 3rd party liability cases you may encounter. Do not, under any circumstances, assume you are safe and protected by simply sending the attorney an itemization of your charges. File a hospital lien (if you are entitled to) and demand a letter of protection. And by all means, if you receive a notice of an inter-pleader motion, have your hospital or practice represented.
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