Patient Sues; Collects; Lawyer is Paid; Wal-Mart Sues Patient; Patient Ends Up Skunked, 12/11/2007
Deborah Shank's car was hit by a truck. She was left in a wheelchair and had extensive brain and nerve injuries. Ms. Shank was an employee of Wal-Mart at the time of the accident, and her health insurance covered over $400,000 in medical costs. She hired an attorney, and sued the owner of the truck. The settlement yielded $700,000 for Ms. Shank. Legal fees and expenses to prosecute her claim were paid; and what remained, $417,000 was placed into a trust to be used for Ms. Shank's care.
Wal-Mart sued Ms. Shank to recover the money they spent on past medical bills. An appellate decision upheld Wal-Mart's right to $469,215 in medical costs, legal fees, and interest for the cost of suing. As this number is higher than the amount that remained in the trust, Wal-Mart essentially got it all.
Health insurance companies are increasingly relying on recouping their costs of money recovered by their insureds in lawsuits for any number of reasons. This can include lawsuits for medical malpractice. The legal theory in known as subrogation, and it is based on the principle that a plaintiff should not be compensated twice for an injury. This legal theory received a shot in the arm when the Supreme Court ruled that an insurance company covered by ERISA can sue a beneficiary for reimbursement of expenses advanced. And this can include collecting from proceeds of settlement with the tortfeasor who was negligent. Sereboff v. Mid Atlantic Medical Services, 126 S. Ct. 1869 (2006). And, state courts have followed this lead. This past summer the Texas Supreme Court ruled that patients do not need to be "made-whole" first before an insurance company can pry into settlement proceeds to reimburse for funds advanced. Fortis Benefits v. Cantu, 234 S.W.3d 642 (Tex. 2007).
In Ms. Shank's case, her attorney apparently failed to have the settlement include funds labeled for future medical care. That faux pas left her without any money. Now Medicare and Medicaid are paying the nursing home bills. In this model, the lawyer was still compensated in six figures; and the patient was merely a pawn for the transfer of funds from one insurance company to another, with the attorney collecting a toll along the way. It is estimated that less than 50% of settlement or judgment money reaches a patient. Expenses and attorneys fees cannibalize the proceeds. As long as attorneys as highly compensated to sue, they will continue to do so, even when the yield for the patient is pitiful.
Medical Justice™ is a program designed by a board certified neurosurgeon to protect physicians from frivolous suits - before they occur.
Medical Justice™ also addresses the problems of Internet libel, inappropriate demands for refunds, and other emerging threats to physicians. For more information please visit us at www.medicaljustice.com.
To request more information on what physicians can do and are doing Click Here.
Medical Justice: 2007 - Celebrating 5 Successful Years Relentlessly Protecting Physicians from Frivolous Medical Malpractice Lawsuits...
