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CONFIDENTIALITY ISSUES

You should ask the lawyer whether he will respect your confidentiality with family members and medical care providers. In other words, ask him/her whether he/she will refuse to disclose confidential information such as psychiatric history without your permission.

GOVERNMENTAL BENEFITS/ INSURANCE SUBROGATION/ REIMBURSEMENT

You should ask the attorney what he/she knows about how social security (SSI), Medicaid, state and local disability programs, impact your case. You need to ask whether or not your health insurance company will insist on reimbursement pursuant to a subrogation clause in the contract. This is a murky area for trial lawyers, because the laws are constantly evolving. A Georgia statute provides that the insurance company should not be entitled to reimbursement if the client has not been “made whole”or fully compensated. If you are interviewing with lawyers on behalf of a client who is mentally disabled as a result of a traumatic brain injury, you must understand that when a lawyer reasonably believes that the client can not adequately act in the clients own interest, a lawyer may seek the appointment of a guardian of the person or property of the client or take other protective action with respect to the client. In that case the Probate court will most likely undertake a “hands on” role in the management of the client’s settlement proceeds, so as to protect the corpus of the client’s estate.

DISCOVERY OF THE CLIENT’S MEDICAL RECORDS

If a case is filed on behalf of a traumatically brain injured client, the defense firms will, no doubt, use all of the data bases at their disposal to supeana all medical records no matter how remote in time and geography pertaining to the client. Sensitive and confidential materials concerning prior mental illness, criminal activity, divorces, will most likely be brought to light. If the Plaintiff’s attorney objects to producing confidential psychological or psychiatric materials, the privacy of these documents may be protected, however, to the great detriment to the case. Many judges would take the position that if the client puts their psychological status into issue, then prior psychiatric and psychological history must be revealed or in the alternative, the case will be dismissed. At a minimum, using the “privilege” to protect such matters, probably will hurt the case and detract from it’s value because it will appear the client is not being honest. If medical bills have been paid by a company health insurance plan governed by ERISA, certain laws and rules apply. ERISA plans by federal law preempt state laws on the subject of a requirement of being “made whole” before subrogation reimbursement applies. ERISA plans have, through federal law, draconian powers of enforcement against the client for recovery of medical expenses in the event that the client makes a recovery, and even against the client’s attorney. Payment by medicare and medicaid, also are subject to subrogation/reimbursement so that any recovery made by the client is subject to part of the client’s money being paid over to medicare or medicaid for reimbursement. Sometimes ERISA plans health insurance companies, medicare and medicaid will agree to compromise the amount claimed, or at least deduct for a prorate share of attorney’s fees and expenses, but sometimes they won’t. If these issues are not dealt with there is a possibility that the client will later be sued for reimbursement, long after the case is over. As a general rule, the subrogation rights of ERISA qualified self funded or self-insured employee medical benefit plans are enforceable against both the employee beneficiary and/or a third party tort feesor, who is held responsible for the injuries to the employee beneficiary. State statutes that limit or prohibit subrogation with regard to such plans, such as the Georgia statute which prohibits subrogation unless the client is fully compensated are generally preempted by ERISA Employer Retirement Income Security Act of 1974, ERISA, sec.1001-1461 Title 29 U.S. code, (Federal preemption sec. 1144A title 29 U.S. code). The lawyer should demonstrate to the client an awareness of state and federal statutory liens and/or subrogation, as well as health care provider claims. For you to fail to take affirmative action to pay medicare and medicaid plans for reimbursement may result in personal liability for you and your lawyer.

STRUCTURED SETTLEMENTS

Often times it is in the interest of the client who is disabled because of a traumatic brain injury to receive a structured settlement. Such settlements are worth considering because the interest earned on the annuity purchased with your recovery over time is not taxable to the client, if the structured settlement is made a part of the settlement and funded before the client receives the money. If the client receives the cash first, and then an annuity which has the same effect as a structured settlement is purchased, the income earned on the corpus of the money is taxable. Many clients who are not used to handling large sums of money particularly those who may have some mental disability as a result of traumatic brain injury, quickly fritter away their money for various reasons. Friends and family come out of the woodwork seeking loans. A compassionate client may well loan away large sums of money with no hope of repayment. Clients may buy extravagant presents for friends and family such as cars or houses. With a structured settlement there is a monthly check coming in and the most damage that can be done by poor money management is that months proceeds be spent. Hopefully the learning curve will be such that the client will learn not to waste the money over time, but the steady monthly income stream will still be available to protect the client’s financial well being and security over time in the event of a structured settlement. In the event a mentally disabled client who is not competent to handle his/her financial affairs does not want a structured settlement, a guardianship of a person or property would be advisable. In considering a structured settlement, the financial stability of the company should be assessed and considered. Grades from Moody’s. Standard and Dave’s and Best rating companies should be obtained. Depending on how the client is rated as to life expectancy due to overall health status, better pay outs can be obtained for clients who have a lesser life expectancy. Another consideration is whether or not to have the annuity continue on for a period of years certain following the death of the client, so that the spouse or children of the client are cared for over time. It is important to know that the attorney fee should only be applied to the present cash value to the settlement, not the total amount of the settlement over time. For example, an annuity purchased for $300,000.00 now may be worth 1.5 million over time, but the fee should be 100,000.00 not 500,000.00

SPECIAL NEEDS TRUSTS

Many competent trial lawyers in the field of traumatic brain injury, are not specialists in trust and estates, including special needs trusts. Sometimes special needs trusts are used to preserve eligibility for medicare, medicaid, or social security. The complex issues involved should be referred to a specialist in special needs trusts. See 1993 OBRA 42 USC 1396 p (d) 4 (A)

On August 10, 1993, President Clinton signed the 1993 Omnibus Budget Reconciliation act OBRA into law. A portion of the act has had significant impact on the use of settlement trusts. For the first time federal legislation authorizes and recognizes their validity while allowing eligibility for disability related benefit programs. The act also grants states a lien against the trust assets remaining at the death of the beneficiary to the extent of medicaid benefits rendered to that beneficiary. The relevant portion is codified at 42 USC Sec. 1396 p(d) The language of the cited provision has created confusion and conflicting interpretations state by state. New policies, regulations and statutes are being enacted as each state struggles to implement the new law. In special needs trusts. If there is any appearance of constructive or actual control by the beneficiary or his parents, guardian, or conservator, the trust efficacy could be negated. The issues relative to the use of the trust in regard to medicaid eligibility are in a constant state of flux. In a special need trusts, the co-trustee must obtain a federal employers tax identification number (“EIN”) or bank accounts must be opened for the trust. The co-trustees must maintain accurate and complete records of all trust activities and make annual reports and file trust tax returns. Most attorneys experienced in traumatic brain injury do an excellent job in the preparation, presentation and resolution of the case both in settlement discussion and litigation, however, many of these attorneys are woefully ignorant of the critical impact that funds received through settlement or judgement can have on the disabled client. Issues involved in competency to sign attorney/client agreements and releases and to properly hold and manage the proceeds of litigation must be considered. The attorney should also be aware that implications for eligibility for collateral source benefits from local, state, or federal programs available to the client as a result of the clients disability. As a severely disabled individual, the plaintiff could be eligible for local, state, and federal benefits based on his disability, such as titles, XVI and XIX of the Social Security Act (SSI and medicaid- 42 U.S.C. 1382 et seq) In order to be eligible for those benefits, Plaintiff may not have resources in more than $2,000.00 available to him. Assets held in guardianship or conservatorship accounts, historically the most common way to manage settlement funds for a disabled client are considered available to the plaintiff for purposes of eligibility determinations and could disqualify the plaintiff from receiving the benefits. Assets held in a properly drafted Special Needs Trusts are not considered available to the plaintiff because title to the assets does not transfer to the beneficiary in the same way that title to assets in a guardianship transfer to the ward. The Social Security Administration recognizes and acknowledges this difference. Eligibility for SSI and Medicaid benefits is important for far more than just the monthly income stream provided under SSI. The federal medicaid budget allocations go to each state to provide on going community and long term residential care for a great number of persons with a wide variety of disabilities. Also, expenditures to traditional medical areas often included are such things as: therapies, long term care, rehabilitation, group home or other living arrangements, sheltered workshops, work activity rehabilitation. By maintaining the plaintiff’s eligibility for SSI and Medicaid, an entire system of state services for social programs, residential alternatives, rehabilitation and case management is preserved. Most states adopt SSI and medicaid eligibility criteria for entrance into those programs. Sometimes the use of the trust as a financial investment and management vehicle is more economical than guardianship. On going reports to the court are minimized and thus court and attorney’s fees are reduced. Financial supervision and security for the client, so that assets are not squandered is not sacrificed. SSI eligibility criteria allow an applicant to have no more than $2,000.00 in liquid resources. Assets in a guardianship belong to the ward and are thus by definition available to him/her for purposes of benefit eligibility determinations. It is a rare plaintiff’s lawyer, experienced in traumatic brain injury, who is adequately familiar with the esoteric rules and regulations regarding Special Needs Trusts, but the attorney must at least be aware of the problems so as to know when and to whom to refer these matters for resolution to the client’s benefit.

CONCLUSION

The problem with the justice system as it relates to the brain injured client or any client for that matter, is that the only thing that it can deliver is money or punishment. In a perfect world the justice system could restore the injured person to full health, and his or her god given perfect brain function would be restored. Money, however, will not accomplish this. Brain cells such as axons, neurons, and dendrites once killed by an injury will not regenerate. Granted, sometimes new neuro-pathways will be created to try to compensate for the damage, but there is nothing the justice system can do to regrow damaged brain cells. Thus, TBI cases often make demands to the justice system, to which it simply can not respond. Certainly, there would be few if any brain injury victims who would take any amount of money willingly as a bargain for losing any part of their mental faculties. When the insurance companies or the corporations pay up, they do not flinch. For them the settlement is a mere accounting entry made on some ledger sheet or computer program by a clerk. Often times there is no apology, no admission of guilt, and even the settlement is confidential and secret. The defendant company then gets back to business to usual while the brain injured plaintiff gets back to the difficult, lifelong business of living a different, altered, brain injured life. Oftentimes the brain injury plaintiff would much rather settle than go through a long ugly trial where all of the sometimes painful and sordid details, are brought into issue in an effort by the insurance company to prove that the psychological elements associated with the brain injury are really nothing more that preexisting problems from life before the injury.

The best way for the client to navigate these difficult waters is to carefully select the most experienced, knowledgeable and compassionate trial lawyer possible for the job. Hopefully, some of the ideas contained in this paper will assist the traumatic brain injury survivor in the selection process, so that the best possible financial outcome will be reached and so that the stress fo going through the litigation process will be minimized.

Credit for explanation about special needs trust, guardianships, and the OBRA Act go to William L. E. Dussault, J.D. attorney practicing in Seattle Washington, who specializes in law for individuals who experience disabilities.