Providers were long considered to have the ability to pursue claims on behalf of their injured patients. Providers would routinely file their own lawsuits or intervene into a patient’s suit in order to have their bill paid for services rendered to the patient.
Covenant v State Farm altered the well-placed practices regarding provider suits. The Supreme Court held that Providers did not have a direct cause of action against insurance companies. It did allow providers to obtain and use assignments. The assignment of rights gave the provider all the rights the patient would have pertaining to the services received, including but not limited to, the right to file a suit against the insurance company for payment but only at the time of signing of the assignment. (Click Here to learn more about assignments)
In 2019 Governor Whitmer signed into effect the new Michigan No-Fault Act which gave Providers the right to pursue their claims against insurance companies. This change does away with the need for Assignments from Patients and gives more control to Providers to maximize payment and results.
Under the current landscape, providers should still get assignments from Patients. Further, they should have patients, and their attorneys, execute lien letters. Even if the attorney refuses to sign such lien, placing them on notice can further help protect your bills. (Click Here to learn more about lien letters)
Providers should retain private counsel for the following reasons:
- Allows more control over the bills. When you hire your own counsel, you have a direct line to the insurance company to negotiate your bill. Unlike in a general case where the underlying Plaintiff and his/her counsel will settle the case then, maybe, offer you a piece of the pie, you get paid directly.
- Attorney fees are generally cheaper. We charge 20% contingency fee for provider work, plus applicable costs. If we are able to settle the matter within 45 days of it being assigned to our firm, we charge 15% plus costs. If you allow your bill to remain in the underlying patients claim, his attorney most likely has a fee of 33 1/3% plus costs that will be taken before you may get paid.
- No need to worry about Patients running off with the settlement proceeds. While very rare, there are Plaintiffs who refuse to pay their medical bills when they settle a 1st party case. If they take the settlement and run, there is a good chance that you will be left high and dry, without recourse.
- The ability to directly fight issues within the case. If an underlying patient becomes uncooperative (i.e. will not show to a deposition), the underlying patient’s case could be dismissed. If you maintain your own cause of action, whether by intervention or directly, you can continue with your claims in spite of the malfeasance of the patient. Further, if there are other issues within the case you, through your counsel, get an opportunity to be heard.