Baltimore Shooter
12-18-2007, 11:35 AM
From MSN.com:
Employers grab accident victims' cash
By The Wall Street Journal
Wal-Mart's health plan sued an ex-worker, brain-damaged in a crash, to collect money from a settlement she'd received. It's part of a trend in which companies aggressively try to recoup insurance costs.
A collision with a tractor-trailer seven years ago left 52-year-old Deborah Shank permanently brain-damaged and in a wheelchair. Her husband, Jim, and three sons found a small source of solace: a $700,000 accident settlement from the trucking company involved.
After legal fees and other expenses, the remaining $417,000 was put in a special trust. It was to be used for Deborah Shank's care.
Instead, all of it is now slated to go to Deborah's former employer, Wal-Mart Stores.
Two years ago, the retail giant's health plan sued the Shanks for the $470,000 it had spent on her medical care. A federal judge ruled last year in Wal-Mart's favor, backed by an appeals-court decision in August. Now, Deborah's family has to rely on Medicaid and her Social Security payments to keep up her round-the-clock care.
"I don't understand why they need to do this," says Jim Shank on a recent visit to the nursing home, between shifts as a maintenance worker and running a tanning salon. "This girl needs the money more than they do."
Deborah, who needs help with eating and other basic tasks, has spent more time alone since Jim had to let her private caregiver go. At some point, he says, she may have to be moved from a private to a semiprivate room in the nursing home where she lives.
The reason is a clause in Wal-Mart's health plan that Deborah Shank didn't notice when she started stocking shelves at a nearby store eight years ago. Like most company health plans, Wal-Mart's reserves the right to recoup the medical expenses it paid for someone's treatment if the person also collects damages in an injury suit.
Going after the money
Until recently, many employers didn't vigilantly enforce the provision, and some states and federal courts didn't think the claim held water. But as the cost of covering workers continues to escalate, employers and health plans are getting more aggressive about going after the money. A U.S. Supreme Court ruling last year also has given them a clearer legal map to suing employees and winning.
In insurance circles, the recovery practice is called "subrogation." Employers and insurers say it's necessary to ensure that medical expenses aren't paid twice. By recovering those costs from someone who's been compensated elsewhere, they argue, they're saving money for everyone on the plan.
Sharon Weber, a spokeswoman for Wal-Mart, declined to discuss the details of the Shanks' case, but she said the company was obliged to act in the interest of the health benefits of its employees as a whole. "While the case involves a tragic situation, our responsibility is to follow the provisions of the (company health) plan which governs the health benefits of our associates," she said.
"Employers are trying to make sure these plans run as efficiently as possible," says Jay Kirschbaum, a senior vice president at global insurance broker Willis Group Holdings. "They also have a fiduciary duty to the plan and the entire group of employees that are covered by it."
The recovery practice
Already, the recovery practice is one of the variables that plaintiffs lawyers are considering as they decide whether it's in their clients' interests to participate in the $5 billion offered by Merck to settle lawsuits over its painkiller Vioxx.
Health plans recovered sizable amounts for medical expenses from other big product-liability settlements, such as for the "fen-phen" diet-drug combination and Sulzer Orthopedics' hip implants. Many insurers and the employer plans they administer are expected to pursue a piece of the Vioxx settlement.
In cases such as the Shanks', in which injuries and medical costs are catastrophic, accident victims sometimes can be left with little or none of the money they fought for in court. Health plans increasingly are adopting language such as Wal-Mart's, which dictates that it is to be paid first out of any settlement, regardless of what remains for the injured person. Moreover, the victim is responsible for all legal costs in pursuing the suit.
"It's especially in the catastrophic cases that people are almost never fully compensated," says Roger Baron, a professor of law at the University of South Dakota and a specialist in health-plan law. "And then their health plan, that's been collecting premiums from them all this time, wants to take it away?"
Tempting savings
Such recoveries represent a tempting savings for insurers, employers and union-administered plans. The American Benefits Council and America's Health Insurance Plans, a health-insurer lobby, estimate health plans recoup about $1 billion a year in medical claims from accident settlements and other third parties. A cottage industry of auditing firms, benefit-recovery specialists and subrogation lawyers help them. They estimate that 1% to 3% of health-care spending is potentially recoverable from such claims.
"In the past, employers used to think of this as an afterthought," says Tom Lawrence, the chief executive of Benefit Recovery, a Memphis, Tenn., company whose clients include Southwest Airlines and hospital chain HCA.
HCA says it saw annual savings from recouped claims rise to $1.8 million in 2006 from about $800,000 in 2000 after hiring the firm.
Benefit Recovery contracts directly with employers. It says it's able to recover $12 to $15 per health-plan member a year -- up to $1.5 million for a big plan with 100,000 members -- by recovering medical expenses from injury-suit settlements.
Refusing to pay
Until recently, employers and insurers generally didn't go after small claims. But more-sophisticated claims tracking has made it easier. Recovery companies systematically search claims for certain medical codes -- say, a sprained ankle or head trauma -- that flag a potential accident. Claims examiners then mail a questionnaire and often follow up with calls. If the injured person confirms it was an accident, the firm tracks whether the patient files an injury suit.
If there is a lawsuit settlement, employers may seek to recoup money they paid for medical expenses. In many cases, it's relatively cut and dried: Often medical expenses are just a portion of the overall damages award, or the accident victim's attorney may reach a compromise with the health plan ahead of any settlement.
Some plans are taking a further step, refusing to pay claims in the first place unless the person filing the claim signs an additional form promising to reimburse the plan from settlement proceeds.
Don Burgett, a Texan who works as an engineer on an oil-drilling ship, has been waiting for his health plan to pay $89,000 in medical claims since his daughter's accident two years ago. Magan Burgett, then 18, was thrown from the back of an all-terrain vehicle in October 2005, tearing her liver, breaking her jaw and fracturing her back.
Soon after Magan's parents submitted the bills for her two-week stay in an intensive-care unit, her father's health plan, the MEBA Medical and Benefits Plan of Maryland, mailed him a reimbursement agreement that restated the plan's rights to a potential settlement.
"To consider claims related to your accident," it said, Don Burgett had to sign it first. When he didn't, MEBA stopped paying claims after reimbursing several hundred dollars in Magan's medical expenses.
Neal Korval, MEBA's outside counsel, says that asking a plan member to sign a reimbursement agreement in such cases is standard procedure and a policy outlined in its health-plan rules. It helps prevent accident victims and their attorneys from trying to "freeze out" the plan from a potential settlement, he says, and reminds or advises the plan member of his or her obligations.
In September, the U.S. District Court for the Eastern District of Texas sided with the Burgetts, ruling that MEBA's health-plan summary, which it considered the prevailing document, didn't stipulate such conditions to pay a claim. The Burgetts' attorney says they secured a $75,000 accident settlement -- a net of $50,000 after legal expenses -- though that wasn't enough to cover Magan's medical expenses. Korval says MEBA recently reached a settlement with the family over the unpaid medical claims, but he declined to disclose terms.
Pivotal court rulings
How much power health plans have to enforce subrogation is based on a hodgepodge of federal and state laws still being tackled in the courts. A pivotal Supreme Court ruling last year gave health plans a leg up. In that case, a Maryland couple, Joel and Marlene Sereboff, were injured in an accident while returning a rental car to an airport in 2000; they required $75,000 in medical care. The couple later received a settlement of $750,000 from various parties related to the accident.
Mid Atlantic Medical Services, now owned by UnitedHealth Group, administered the health plan of Marlene Sereboff's employer and sued the couple when they refused to pay the company out of their settlement.
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B-roll.net won't allow publishing of more than 10,000 characters, so you can find the final part of this stroy here - http://articles.moneycentral.msn.com/Insurance/KnowYourRights/EmployersGrabAccidentVictimsCash.aspx?page=2
-------------------------------------------
Link to beginning of article - http://articles.moneycentral.msn.com/Insurance/KnowYourRights/EmployersGrabAccidentVictimsCash.aspx
Warren
Employers grab accident victims' cash
By The Wall Street Journal
Wal-Mart's health plan sued an ex-worker, brain-damaged in a crash, to collect money from a settlement she'd received. It's part of a trend in which companies aggressively try to recoup insurance costs.
A collision with a tractor-trailer seven years ago left 52-year-old Deborah Shank permanently brain-damaged and in a wheelchair. Her husband, Jim, and three sons found a small source of solace: a $700,000 accident settlement from the trucking company involved.
After legal fees and other expenses, the remaining $417,000 was put in a special trust. It was to be used for Deborah Shank's care.
Instead, all of it is now slated to go to Deborah's former employer, Wal-Mart Stores.
Two years ago, the retail giant's health plan sued the Shanks for the $470,000 it had spent on her medical care. A federal judge ruled last year in Wal-Mart's favor, backed by an appeals-court decision in August. Now, Deborah's family has to rely on Medicaid and her Social Security payments to keep up her round-the-clock care.
"I don't understand why they need to do this," says Jim Shank on a recent visit to the nursing home, between shifts as a maintenance worker and running a tanning salon. "This girl needs the money more than they do."
Deborah, who needs help with eating and other basic tasks, has spent more time alone since Jim had to let her private caregiver go. At some point, he says, she may have to be moved from a private to a semiprivate room in the nursing home where she lives.
The reason is a clause in Wal-Mart's health plan that Deborah Shank didn't notice when she started stocking shelves at a nearby store eight years ago. Like most company health plans, Wal-Mart's reserves the right to recoup the medical expenses it paid for someone's treatment if the person also collects damages in an injury suit.
Going after the money
Until recently, many employers didn't vigilantly enforce the provision, and some states and federal courts didn't think the claim held water. But as the cost of covering workers continues to escalate, employers and health plans are getting more aggressive about going after the money. A U.S. Supreme Court ruling last year also has given them a clearer legal map to suing employees and winning.
In insurance circles, the recovery practice is called "subrogation." Employers and insurers say it's necessary to ensure that medical expenses aren't paid twice. By recovering those costs from someone who's been compensated elsewhere, they argue, they're saving money for everyone on the plan.
Sharon Weber, a spokeswoman for Wal-Mart, declined to discuss the details of the Shanks' case, but she said the company was obliged to act in the interest of the health benefits of its employees as a whole. "While the case involves a tragic situation, our responsibility is to follow the provisions of the (company health) plan which governs the health benefits of our associates," she said.
"Employers are trying to make sure these plans run as efficiently as possible," says Jay Kirschbaum, a senior vice president at global insurance broker Willis Group Holdings. "They also have a fiduciary duty to the plan and the entire group of employees that are covered by it."
The recovery practice
Already, the recovery practice is one of the variables that plaintiffs lawyers are considering as they decide whether it's in their clients' interests to participate in the $5 billion offered by Merck to settle lawsuits over its painkiller Vioxx.
Health plans recovered sizable amounts for medical expenses from other big product-liability settlements, such as for the "fen-phen" diet-drug combination and Sulzer Orthopedics' hip implants. Many insurers and the employer plans they administer are expected to pursue a piece of the Vioxx settlement.
In cases such as the Shanks', in which injuries and medical costs are catastrophic, accident victims sometimes can be left with little or none of the money they fought for in court. Health plans increasingly are adopting language such as Wal-Mart's, which dictates that it is to be paid first out of any settlement, regardless of what remains for the injured person. Moreover, the victim is responsible for all legal costs in pursuing the suit.
"It's especially in the catastrophic cases that people are almost never fully compensated," says Roger Baron, a professor of law at the University of South Dakota and a specialist in health-plan law. "And then their health plan, that's been collecting premiums from them all this time, wants to take it away?"
Tempting savings
Such recoveries represent a tempting savings for insurers, employers and union-administered plans. The American Benefits Council and America's Health Insurance Plans, a health-insurer lobby, estimate health plans recoup about $1 billion a year in medical claims from accident settlements and other third parties. A cottage industry of auditing firms, benefit-recovery specialists and subrogation lawyers help them. They estimate that 1% to 3% of health-care spending is potentially recoverable from such claims.
"In the past, employers used to think of this as an afterthought," says Tom Lawrence, the chief executive of Benefit Recovery, a Memphis, Tenn., company whose clients include Southwest Airlines and hospital chain HCA.
HCA says it saw annual savings from recouped claims rise to $1.8 million in 2006 from about $800,000 in 2000 after hiring the firm.
Benefit Recovery contracts directly with employers. It says it's able to recover $12 to $15 per health-plan member a year -- up to $1.5 million for a big plan with 100,000 members -- by recovering medical expenses from injury-suit settlements.
Refusing to pay
Until recently, employers and insurers generally didn't go after small claims. But more-sophisticated claims tracking has made it easier. Recovery companies systematically search claims for certain medical codes -- say, a sprained ankle or head trauma -- that flag a potential accident. Claims examiners then mail a questionnaire and often follow up with calls. If the injured person confirms it was an accident, the firm tracks whether the patient files an injury suit.
If there is a lawsuit settlement, employers may seek to recoup money they paid for medical expenses. In many cases, it's relatively cut and dried: Often medical expenses are just a portion of the overall damages award, or the accident victim's attorney may reach a compromise with the health plan ahead of any settlement.
Some plans are taking a further step, refusing to pay claims in the first place unless the person filing the claim signs an additional form promising to reimburse the plan from settlement proceeds.
Don Burgett, a Texan who works as an engineer on an oil-drilling ship, has been waiting for his health plan to pay $89,000 in medical claims since his daughter's accident two years ago. Magan Burgett, then 18, was thrown from the back of an all-terrain vehicle in October 2005, tearing her liver, breaking her jaw and fracturing her back.
Soon after Magan's parents submitted the bills for her two-week stay in an intensive-care unit, her father's health plan, the MEBA Medical and Benefits Plan of Maryland, mailed him a reimbursement agreement that restated the plan's rights to a potential settlement.
"To consider claims related to your accident," it said, Don Burgett had to sign it first. When he didn't, MEBA stopped paying claims after reimbursing several hundred dollars in Magan's medical expenses.
Neal Korval, MEBA's outside counsel, says that asking a plan member to sign a reimbursement agreement in such cases is standard procedure and a policy outlined in its health-plan rules. It helps prevent accident victims and their attorneys from trying to "freeze out" the plan from a potential settlement, he says, and reminds or advises the plan member of his or her obligations.
In September, the U.S. District Court for the Eastern District of Texas sided with the Burgetts, ruling that MEBA's health-plan summary, which it considered the prevailing document, didn't stipulate such conditions to pay a claim. The Burgetts' attorney says they secured a $75,000 accident settlement -- a net of $50,000 after legal expenses -- though that wasn't enough to cover Magan's medical expenses. Korval says MEBA recently reached a settlement with the family over the unpaid medical claims, but he declined to disclose terms.
Pivotal court rulings
How much power health plans have to enforce subrogation is based on a hodgepodge of federal and state laws still being tackled in the courts. A pivotal Supreme Court ruling last year gave health plans a leg up. In that case, a Maryland couple, Joel and Marlene Sereboff, were injured in an accident while returning a rental car to an airport in 2000; they required $75,000 in medical care. The couple later received a settlement of $750,000 from various parties related to the accident.
Mid Atlantic Medical Services, now owned by UnitedHealth Group, administered the health plan of Marlene Sereboff's employer and sued the couple when they refused to pay the company out of their settlement.
----------------
B-roll.net won't allow publishing of more than 10,000 characters, so you can find the final part of this stroy here - http://articles.moneycentral.msn.com/Insurance/KnowYourRights/EmployersGrabAccidentVictimsCash.aspx?page=2
-------------------------------------------
Link to beginning of article - http://articles.moneycentral.msn.com/Insurance/KnowYourRights/EmployersGrabAccidentVictimsCash.aspx
Warren