Dr. Tom Grant, Med-Legal Consultant, Chiropractor and personal injury entrepreneur, of Pragma Intel recently hosted a Q&A session with the founder and CEO of Cherokee Funding, Reid Zeising, to discuss medical funding versus medical liens.
Below is an excerpt from their conversation:
Dr. Tom Grant: How would you describe the differences between medical funding and medical liens?
They’re all liens. Whether it’s a doctor, a hospital or a medical funding company holding the lien – they’re all liens.
In the medical funding world, non-recourse funding is a state-by-state issue, so some states require recourse and some do not. Our position, though, is that we don’t want medical providers being the financiers of their own services and holding liens against their patients.
Dr. Tom Grant: In your opinion, what are the pitfalls of doctors holding liens?
I’m biased. We’re in the business of medical funding. But regardless of each professional and each individual’s role, the goal is to get the patient back on their feet. The customer in these instances are catastrophically injured people, who are most likely uninsured or underinsured, and who have a liability carrier claim.
To me, there are tremendous issues when the doctors are the lienholders. It is an inherent conflict of interest, not to mention the fact that it arms the defense counsel with material to change the focus away from the fault of their client. In catastrophic cases, where defense attorneys are trying to change the case into anything else other than what it is, my thought is why arm them? Can the defense council point out that the medical practitioners have a vested financial interest in the case? Can they turn the focus into a sideshow by pointing out that the doctors are financiers instead of practitioners, and affect the jury’s opinion? We’ve seen this occur many times to the detriment of plaintiffs. And in my opinion, there’s no reason to give them that piece of low hanging fruit.
Dr. Tom Grant: What goes into medical funding, and why is it your recommendation that doctors do not get involved?
Doctors are in the business of providing medical treatment; they should not be in the business of providing medical funding. It requires underwriting, risk management, case follow-ups, and accounting for a variety of outcomes that can occur. Ultimately, it ends up being a lot of analysis and collections, and doctors do just as well, if not better, by not getting involved.
Medical funding is a significant expense, in addition to the time value and the risk of not getting paid. Oftentimes, these risks and the time it takes to do it right and to do it well outweigh the benefits for a medical practice, which is why we are proponents of independent, third-party medical funding and medical funding companies that specialize in serving as the financiers.
To listen to the full interview, including getting Reid’s responses to these questions:
Do patients have to repay the funds if their cases do not settle?
Are there dollar amounts, or case values, required for medical funding to be involved?
Does the use of medical funding pressure attorneys to settle early, drive off claim settlements or change the outcome of a case in any way?