New D.C. Law Protects Injured People from Excessive Health Insurer Subrogation

A new law may help injured victims in personal injury cases keep more of the money they win in settlements and verdicts.  D.C. recently enacted the “Health Care Benefits Lien Reduction Act of 2016” which modifies the rights of health insurers in a personal injury case.  This law is codified as D.C. Code § 31-3551.  Health insurers have no obligation to tell their insureds about this statutory reduction.  This law has not yet been interpreted by the courts, and thus clarifications of its application are likely.

By way of background, health insurance plans often provide themselves a contractual right of “subrogation” in their plan documents.  In doing so, the health insurer (or “subrogee”) is contractually entitled to recover some or all of the amounts actually paid by the health insurer out of a personal injury settlement or verdict.   The new law limits the subrogee’s rights in two important ways, creating fairness for many people injured in accidents:

First, the subrogee is required to provide an automatic percentage reduction of the health insurance lien to account for the attorneys fees and case expenses that the injured person bore in obtaining a settlement or verdict.   The exact percentage of the reduction is determined adding the attorneys’ fees and case expenses, then dividing this number by the “total recovery.”

  • Example: Assume John Q. Client was injured in a car accident and received a total recovery of $100,000.  His attorney fee of 40% equaled $40,000 and his case expenses were $5,000. Assume his health insurer had paid $18,000 toward his medical care.  In this scenario, the health insurer would be required to reduce its subrogation claim by 45%.   This percentage is determined as follows:  ($40,000 fee + $5,000 expenses) / $100,000 total recovery.  Because the health insurer had paid $18,000, it would be required to reduce its claim to $9,900 or less (subtracting 45% of $18,000).

Second, the subrogee’s amount permitted to be recovered “shall not exceed one-third of an injured person’s recovery.”   Thus, with a particularly large lien and a relatively small settlement, the subrogee will be limited to one-third of the client’s net settlement proceeds after deduction of attorneys fees and expenses.

  • Example:  Using the same facts above, but instead assume John Q. Client’s health insurer had paid a whopping $92,000 toward his claim (but Client could only obtain the same $100,000 settlement, which was the maximum recoverable due to the bad driver’s auto insurance limits).   In such cases, health insurers used to demand as much as the full $92,000, leaving the client with little or nothing.  In this case, D.C. Code 31-3551(b)(2) protects the injured person from an unreasonable result by limiting the health insurer’s claim to one-third of Client’s recovery.  John Q. Client recovered only $55,000 in the above scenario ($100,000 minus $40,000 in attorneys fees and $5,000 in expenses), and therefore the health insurer is only entitled to recover $18,333.33 (1/3 of $55,000), even though the health insurer had paid $92,000.

Exceptions to this new law include (1) if the subrogree intervenes in the case with its own lawyer; (2) if the subrogee has already offered a reduction larger than the statutory reduction (no-double reduction); or (3) if the D.C. Medicaid program has paid the health benefits.  There are also potential preemption issues for certain types of health plans regulated by the federal government.  While other legal doctrines (e.g., the “made whole” doctrine) may have allowed parties to argue for a reduced health insurance subrogation before D.C. Code § 31-3551 came into effect, those doctrines had been watered down by years of health insurer litigation.

Notably, D.C.’s law differs in language from laws addressing similar issues in Virginia (which has a complete anti-subrogation rule and corollary auto med-pay rule) and Maryland (which limits the reduction percentage instead of insurer’s total recovery).  D.C.’s new law may be seen as a middle ground between the two jurisdictions — permitting some health insurer subrogation recovery (unlike Virginia), while favoring the injured victim in those cases where the lien would have created a larger recovery for the health insurer under current Maryland or prior D.C. law.

Because this is a complex area of law, many other statutes and legal doctrines may affect the analysis of a particular claim, and this is not to be construed as legal advice for any particular situation.

The End of Contributory Negligence in D.C.?

Unless you have been injured and consulted with a personal injury lawyer, you likely have no idea that you may live in a jurisdiction that makes recovering for your injuries harder than almost anywhere else in the United States.  Why is that?  Because D.C., Maryland, and Virginia are three of only five jurisdictions in America that still use something called contributory negligence to determine if you can recover against the person or people that injured you.  Essentially, if you are found to be even 1% at fault for your injuries, you may be unable to recover anything for the damages you have suffered.  This means that if a jury thinks you should have seen the dangerous ice in the parking lot that your grocery store ignored and did not warn you about before you slipped, or that you should have noticed the distracted driver on his cell phone before you started crossing the street in the crosswalk, you could get nothing in compensation for the pain and expenses from your injuries.  D.C., Maryland, and Virginia need to catch up to the rest of the country and get rid of this draconian system.  Luckily, the first strike against contributory negligence has been launched in the District of Columbia.

The D.C. Motor Vehicle Collision Recovery Act of 2016 became law in the District of Columbia effective November 26, 2016.  This law eliminates the harsh contributory negligence standard for cyclists, pedestrians, or users of other non-motorized devices (like skateboards) involved in a collision with a vehicle, replacing it with a fairer comparative negligence standard.  This means that now pedestrians or cyclists in the District that are injured in an incident with a vehicle can recover for their injuries as long as they were less at fault than the vehicle or vehicles that hit them or caused their injuries.   Simply put, if you were 50% or less at fault you can now get compensated for your injuries.  This is a great win for injury victims and a refreshing move towards a more just system of compensation for injury victims in D.C.

This act only applies to pedestrians, cyclists, and users of other non-motorized devices.  So think twice about riding that motorized scooter to work instead of riding your bike or walking.  It is healthier for you, and now you have extra protections under the law should a car run a red light and hit you – which sadly happens too often. We hope that those of us who drive, ride motorcycles, scooters or even mechanized skateboards will soon enjoy these same protections.  Once the fairness of this new system is apparent, we expect this will be a harbinger of greater change that will protect more citizens of D.C., Maryland and Virginia and lead to the end of contributory negligence in our region.

If you have been injured in a vehicle collision, whether as a pedestrian, cyclist, or otherwise, the attorneys at Posey Lebowitz are happy to speak with you about your rights to compensation.  There are important things to know about your rights and dealing with insurance companies after an accident and speaking to a lawyer quickly can dramatically help your claim.  Initial consultations are always free so give us a call today.

SuperLawyers recognizes Jacob Lebowitz and Ryan Posey

Jacob Lebowitz and Ryan Posey have been selected for recognition by Super Lawyers for 2017.  For the second year in a row, Jacob Lebowitz has been named a Washington D.C. Super Lawyer (2016-2017).  And, for the fourth year in a row, attorney Ryan C. Posey has been named a Super Lawyers Rising Star (2014-2017)

According to the publisher of the accolade, Super Lawyers recognizes the top lawyers in Washington DC via a patented multiphase selection process involving peer nomination, independent research and peer evaluation.   Only 5% of attorneys are selected as Super Lawyers, and 2.5% of attorneys under 40 are selected as Super Lawyer Rising Stars.

Both Jake and Ryan are honored to receive recognition of their hard work on behalf of clients — both individuals and businesses — in complex litigation matters.  Posey Lebowitz litigates cases nationwide, primarily in Washington DC, Virginia, Maryland, and Ohio.  The firm’s representation includes serious personal injury matters, complex business litigation, and cutting edge internet issues.

Ryan Posey selected as 2015 Washington DC Super Lawyers “Rising Star”

SuperLawyers-RisingStars_315pxFor the second year in a row, Ryan Posey has been recognized as one of the top personal injury lawyers in Washington D.C.   Mr. Posey was selected as one of Washington D.C.’s Super Lawyers “Rising Stars” in the Plaintiff’s Personal Injury practice area.   This honor is bestowed upon lawyers under 40  “who have attained a high-degree of peer recognition and professional achievement.”   Super Lawyers’ patented selection process culls no more than 2.5% of the top lawyers in each region to be awarded this honor.

In 2014 and 2015, Mr. Posey and his firm have represented car accident victims, including wrongful death and serious bodily injury, victims of premises liability including negligent maintenance of floors, as well as victims of civil rights abuses, medical negligence, and sexual assault.  Mr. Posey practices both personal injury law and general commercial litigation with experience derived from both big firm and boutique practices.

If you or a loved one have been injured by another’s negligence, please call Posey Lebowitz PLLC at 202-524-0123 to speak to an attorney today for a free initial consultation.

Jacob M. Lebowitz Named D.C. Wrongful Death Lawyer of the Year

Posey Lebowitz PLLC is pleased to announce that Founding Partner Jacob M. Lebowitz was recently named 2015 Washington, D.C. Wrongful Death Attorney of the Year by Corporate Intl Magazine.  While recognition and accolades are always appreciated, it is the satisfaction of a job well done in representing families who have recently lost a loved one that is the true reward.  Consultations with Posey Lebowitz PLLC are always free and it would be our pleasure to speak with anyone seeking justice for the negligent death of a loved one.

Wrongful Death Cases in Washington D.C., Maryland, and Virginia

When you suffer the wrongful death of a loved one due to the negligent or reckless conduct of someone else — whether in a vehicle crash, foreseeable third party criminal act, or otherwise — you may have rights. These pages cannot by any means cover every topic related to wrongful death, but provide some information so that you can understand and engage with your rights. To discuss these matters in more detail with experienced attorneys, call us at 202-643-2525 (Ryan) or 202-524-0123 (Jacob).

Each of the jurisdictions in the District of Columbia, Maryland, and Virginia region have important distinctions in the laws applicable to wrongful death. The various laws have drastic impact on the amount of financial compensation recoverable in wrongful death. For example, in Virginia, the parents and siblings of a decedent with no spouse or children can recover. In Maryland, only the parents are “primary beneficiaries” in that case. While these distinctions are subtle, they reflect different legislative priorities among the three jurisdictions in which Posey Lebowitz PLLC primarily practices.

Insurance Coverage Litigation

Is the insurer in your personal injury case attempting to disclaim coverage?  Attorneys and clients alike run into problems when insurers file a “declaratory judgment” action against the insured, asking a court to declare that there is no insurance coverage.  Insurers’ claim lack of coverage in a wide variety of circumstances including:

  • late notice — when the insured fails to put the insurer on notice soon enough after the occurrence;
  • failure to cooperate — when the insured does not provide the assistance to the insurer that is required by contract (e.g., a criminal defendant who is also sued civilly will often choose to assert his Fifth Amendment privilege against self-incrimination);
  • application of an exclusion — insurance policies contain technical exclusions based on the type of insurance (e.g., a homeowners policy excludes “automobile” liability that would be covered by car insurance).

Insurance coverage can vastly change the financial outcome for injured people.  Posey Lebowitz has significant experience litigating, on behalf of plaintiffs and insureds, to obtain coverage that insurers are wrongfully trying to deny.

Please contact Mr. Posey to discuss litigating your insurance coverage dispute, as failure to contest the coverage action will certainly result in loss of coverage.

Why defenses are important, even to plaintiffs: assumption of the risk

Defense lawyers assert “assumption of risk” whenever a sport is involved — but it only applies sometimes.  In Virginia, for example, assumption of the risk is subjective, taking into account “what the particular plaintiff in fact sees, knows, understands and appreciates.” Amusement Slides v. Lehmann, 217 Va. 815 (1977). The defense requires proof that the plaintiff (1) fully appreciated the nature and extent of the risk and  (2) voluntarily incurred the specific type of risk.  Id. at 819.

Whether a defendant prevails can be very fact-intensive.  For example, a person sliding into home plate might have assumed the risks of collision by engaging in a contact sport.  Likewise, a spectator along first base might have assumed the risk of being hit by a baseball.  But not every risk is foreseeable or assumed — a spectator at a baseball game does not assume the risk of the seat malfunctioning and causing a back injury.