What is an Interpleader Action?
When one person holds property that they do not own and multiple claimants to the property exist, an interpleader action is employed to determine the rightful owner of said property. In many cases, an interpleader action arises due to an individual receiving settlement funds meant for the payment of multiple bills.
An example of an interpleader involving health care providers.
John Smith gets into an automobile accident, and it is determined that it is the other driver’s fault. Mr. Smith seeks medical attention from various providers for injuries stemming from the accident. Through litigation, Mr. Smith receives a settlement payment, from the other driver’s insurance, that is meant to cover pain and suffering, attorney fees, and medical bills. After Mr. Smith pays the attorney and receives funds for pain and suffering, the remainder of the settlement totals $75,000. However, the medical bills total $100,000. Mr. Smith’s attorney enters an interpleader action to determine how the remainder of the funds will be divvied up, as there is not enough to cover all of the outstanding bills.
Risks for health care providers.
If bill was not sent to patient prior to settlement, then a smaller settlement results, and thus less for providers.
If bill was not sent to patient prior to interpleader, then provider may not receive any monies.
If provider does not attend all hearings, they may not receive any monies
Key things for health care providers to do.
Ensure bill has been sent to patients of motor vehicle accidents and work-related accidents.
Ensure information regarding the bill is accurate within the interpleader.
Have representative – in-house counsel or retained attorney – attend all hearings
For further information, see our blog post on Interpleader Actions.
