By: Cindy Merrell, Esq.
The Subrogation Sphere Is a Place Where Opponents Become Allies
Las Vegas does not have the only sphere that can provide an extraordinary experience for its participants. Let me introduce you to the subrogation sphere where participants may first appear to have conflicting interests but can become allies. When a health plan member is injured because of a third-party action it sets into motion a dance involving many players, potentially including the plan participant, at-fault party, medical providers, stop loss carrier, and the health plan. Each player is trying to determine which player is the proper payor of the plan participant’s medical expenses.
The Alliance Begins
My primary duty as a subrogation attorney is to identify the proper payor of the health plan participant’s medical expenses. To successfully perform my job, I have regular contact with attorneys for both stop loss carriers, facilities, and plan participants’ attorneys.
Just the other week, one of our third-party administrator clients reached out to us because they were having difficulty getting a group’s stop loss carrier to process a $500,000.00 trauma bill. When we took a deep dive into the facts, we found out the member had been involved in a motor vehicle wreck caused by a third party. In this case, the auto policy limits were minimal. The hospital lien and health plan reimbursement amount far exceeded the available auto policy limits. Given the size of the trauma bill, the hospital retained an attorney to pursue their interest. The injured plan participant retained an attorney. The general counsel for the stop loss carrier was involved and The Phia Group was pursuing the subrogation/reimbursement interest on behalf of the health plan. Everyone was at a stalemate.
I knew that no one could “win” on this case. The plan participant was stressing over the $500,000.00 unpaid trauma bill. The self-funded health plan employer group was stressing over the same bill, not only because their valued employee was stressed and injured, but because this large of a claim without the stop loss reimbursement could be financially catastrophic to the health plan. The plan participant’s attorney could not resolve the plan participant’s claim against the auto carrier given the size of the provider lien and the health plan’s reimbursement interest.
No One Wins, but Everyone Wins
When I talked to the plan participant’s attorney, I could hear the desperation in his voice as he simply did not know what to do. His client who had suffered a catastrophic injury was more worried about the large trauma bill than his own recovery. I asked the plan participant’s attorney if his client would consider entering into a pre-settlement agreement in which the health plan and the plan participant could both get at least some portion of the minimal limits. After the plan participant agreed to my proposal, I had to get the stop loss carrier on board. I quickly realized the stop loss carrier simply did not have all the facts and I was able to provide the missing information and get the trauma bill processed. Once the trauma bill was processed and paid, the hospital lien was withdrawn.
Why Does the Alliance Matter?
The subrogation sphere can provide a meaningful impact for many people. In my example, the plan participant did not face the financial hardship of a $500,000.00 trauma bill. The hospital that provided the medical care received compensation for the services it provided. Finally, the health plan could remain self-funded. The health plan’s self-funded status allows its employees and their dependents to have comprehensive health care with lower premiums.