A recurring issue for health plan subrogators is what language is sufficient to override the make whole rule. On the one hand, Circuits like the Fifth Circuit have held that no particular language is required to overcome the make whole rule. In the Fifth Circuit (and others like it), plan language simply providing for 100% recovery is sufficient.
On the other hand, some Circuits like the Eleventh Circuit require that a health plan specifically disclaim the make whole rule by saying something to the effect that the plan can recover 100% of the medical expenses paid even if the member has not been made whole.
In Board of Trustees v. Hill, 2008 U.S. Dist. LEXIS 96239 (N.D. Cal. Nov. 25, 2008), the Court held that plan language establishing priority of payment — without specifically disclaiming the make whole rule — was sufficient to disclaim the concept.
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On December 20, 2007, Lawrence & Russell filed a Petition for Certiorari on behalf of Bauhaus in the Bauhaus v. Copeland case. The issue in the case is whether the Mississippi Supreme Court erred in holding that a Mississippi common law rule prohibiting subrogation against a minor by an ERISA-covered health plan — even where the plan specifically provided for it — was not preempted by ERISA. I think the state law is clearly preempted by ERISA, but the Mississippi Supreme Court disagreed. We’ll see if the Supreme Court is willing to hear the case.
Since Sereboff, there have not been many decisions that cover new ground; Bauhaus is one of the exceptions. (more…)
In White v. Humana Health Plan, 2007 U.S. Dist. LEXIS 32263 (N.D. Ill. May 2, 2007), the Court held that health plans may remove petitions to adjudicate liens under Illinois law to federal court where the member challenges the plan’s right to pursue subrogation.
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On April 24, 2007, I discussed a new case wherein the court denied a personal injury attorney’s motion to dismiss breach of fiduciary claims based upon the attorney dissipating settlement funds to which a health plan claimed a right. (more…)
In Trustees of the Teamsters Local Union No. 443 Health Services and Insurance Plan v. Papero, No. 3:06-CV-01069, 2007 U.S. Dist. LEXIS 29247 (D. Conn. Apr. 19, 2007), the Plan paid $120,481.19 on behalf of Papero because of an accident. Papero hired two attorneys, Walsh and Ross, to represent him in suing the parties responsible for his injuries. (more…)
We’ve all been there. You have a case where the member clearly has not been made whole, your plan language does not disclaim the make whole rule, and you’re in one of those strict circuits where specific language is required in order to avoid the make whole rule. What do you do? Waive your lien rights? (more…)
I have noticed that a lot of in-house units and subrogation vendors make this approach a common practice. I have always questioned this practice, but haven’t take the time to do the research on it. (more…)
Since Ahlborn was decided by the Supreme Court, I have witnessed a number of plaintiff’s lawyers argue with a straight face that Ahlborn applies outside of state Medicaid, including ERISA and Medicare. (more…)
The first time I read a case, post-Sereboff, that didn’t bar a plan’s recovery where funds were dissipated, I thought it was a fluke. Here’s another one; could this be a trend? (more…)
Tom Lawrence