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Case Raises Questions About Plaintiffs’ Medical Financing, Lawyers’ Exposure

Law.com, October 31, 2019

By Angela Morris

A San Antonio man has reduced a claim on his lawsuit recovery by 70% in a case that raises questions about whether medical financing companies—to which some plaintiffs attorneys refer their clients—are flaunting rules governing the medical expenses plaintiffs can lawfully recover.

Although MedFinManager attempted to recover more than $210,000 for a surgery and other health care from John Salas’ car wreck settlement, Bexar County’s 407th District Court on Thursday only awarded the company about $69,400. That’s the amount of money that Salas’ attorney said that doctors actually received from MedFin for Salas’ medical care.

“This is a hot issue across the nation and the problem is these financing companies are believed by defense counsel to be shills for false medical, and I think this case says in this instance—just MedFin—that they are,” said Carl Kolb, who represents Salas.

Kolb, a San Antonio solo practitioner, said the Texas Civil Practice and Remedies Code only allows plaintiffs to recover medical expenses that they actually paid a doctor, not what the doctors billed. He claimed that companies like MedFin skirt the law by fraudulently inflating the amounts that doctors were paid.

Plaintiffs counsel should also take note of the ruling, because it shows that use of medical financing companies sometimes breach their duties to their own clients, according to Kolb.

Underlying Litigation
Salas was riding as a passenger in his employer’s vehicle in August 2013 when a Lowe’s Home Improvement Center truck rear-ended the vehicle. Salas’ employer subscribed to workers’ compensation in Texas, which covered his injuries.

Among other things, Salas claimed the Carlson Law Firm and an attorney, Steve Dummitt, neglected to file his workers’ comp claim, which would have covered his medical expenses. Instead, they “made the unilateral decision to pursue funding through a ‘shark loan,’ such as MedFin, without consulting with Salas about his alternatives and the consequences of each,” Salas argued.

Salas needed surgery that would have cost $15,000 to $20,000 if he went to an approved workers’ comp physician, according to his pleadings.

But the Carlson firm and Dummitt sent him to an out-of-network doctor who quoted $162,000 for the procedure, court filings argue. The attorneys obtained a $255,000 MedFin loan for Salas, who alleged they did this because they thought the “inflated MedFin medical costs would generate a higher settlement.”

In the end, Salas fired them and hired new counsel. When the car wreck case settled, MedFin claimed that Salas owed it more than $210,000.

Later, Salas sued the Carlson firm and Dummitt, and also sought a declaratory judgment that MedFin’s financing is unconscionable and void. MedFin denied the allegations, and brought claims against Salas to recover the money.

However, the court in August tossed out the company’s breach-of-contract claim against Salas. The nearly $69,400 that the company recovered in Thursday’s judgment represents the exact amount it paid to four doctors who treated Salas.

Adam Poncio, of counsel at the Davis Law Firm in San Antonio, who represented MedFin, didn’t return a call or email seeking comment before deadline. Neither did Davis & Santos partner Mark Murphy of San Antonio, who represented the Carlson firm and Dummitt.

Litigation among Salas, the Carlson firm and Salas’ new attorneys over an attorney-fee dispute also ended Oct. 29. An order confirming award and final judgment shows the Carlson firm won $81,824, while Salas’ new attorneys won $330,000.

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