In 2014, the Ethics Advisory Opinion Committee of the Utah State Bar issued Ethics Advisory Opinion Number 14-01 concerning a lawyer’s use of third party lien resolution companies and passing the cost of such service to the client. A portion of the opinion is as follows:
Under what conditions is it appropriate for a personal injury lawyer to “outsource the calculation, verification and resolution of alleged health insurance liens and subrogation/reimbursement claims” and pass the outsourced resolution fee to the client as a “cost.” There are two questions posed to the committee. First, can the lawyer appropriately outsource the lien resolution? Second, is the treatment of the lien resolution fee appropriately treated a “cost” to the client?
It is ethical for a personal injury lawyer to engage the services of a lien resolution company that can provide expert advice or to associate with a law firm providing this service.
If properly disclosed in the retention agreement, fee resolution services may be included as “costs” to the client provided the resolution services are professional services equivalent to accountants or appraisers.
If the services provided constitute the practice of law, the personal injury lawyer and the lien resolution company must comply with the fee-splitting requirements of Rule 1.5(c) and (d). Then, the lawyer cannot treat the lien resolution fee as a cost to the client. If the services constitute the practice of law, it may be proper for a lien resolution company to collect a contingency fee.
The complete text of Opinion Number 14-01 can be found on the Utah State Bar’s website: click here.
Personal injury attorneys who are currently negotiating and resolving Medicare, Medicaid, and other healthcare liens in-house may find that outsourcing the lien resolution to an outside firm saves them time and money, and saves their staff a lot of frustration.
Please give us a call at 801-683-7362 to discuss outsourcing the resolution of the liens on your cases. We have relationships with companies that focus solely on lien resolution. We’d be happy to make an introduction to the lien resolution companies that have provided the best results to other personal injury attorneys.