KO is wrong on the Wal-Mart case

[Hamlette]

whether you know it or not, all of your health insurance policies (and workers compensation policies) have a clause that say if you sue someone else for your injuries and win, you have to pay back the insurance company for money your insurance put out on the claim.

From how KO is reporting this, it sounds like that is what happened in this case. I'm not 100% sure but its how it sounds.

It's called 3rd party recovery.

In some ways, it is fair. Let's say your insurance company pays $500,000 for medical expenses you incur as the result of a car accident. You sue the driver of the other car for the injuries you suffered in the accident. The other driver (or his insurance company) pays you $600,000 for your injuries. Haven't you been paid twice? That's why you have to pay the first $500,000 over to your own insurance company.

He's sounding silly to me harping on this. It happens every day.

[Blue_In_AK]

1. Her lawyer should have gotten her damages

over and above her medical costs, however; at least that's been my experience working in the legal biz. Damages for pain and suffering, future earnings, etc. etc. etc., and punitives if the accident that she was in was caused by egregious recklessness.

[Thickasabrick]

11. Her lawyers got over 1/2 million - greedy assholes.

[Juche]

2. Even so

I can understand the legal issues surrounding this and the black hole. However for alot of people it is a woman who is disabled for life, who doesn't even know her son died in Iraq and who doesn't know her husband divorced her, who also has an (ex) husband who works several jobs.

If this were a minor accident like a broken leg, then I would have more sympathy for the corporation wanting a refund. But with all the damage this family suffered (dead son in Iraq, woman with permanent brain disability, divorce, husband working several jobs), I would just cut them a check for $400k.

[dflprincess]

3. It shouldn't happen

It's one thing if your insurance company tries to recover expenses if you've made a full recovery from your injuries, but the money this woman received was to help cover her future medical expenses.

And, it's not an insurance company that's suing, it's her employer (I assume Walmart is self insured?) and it's an employer that can afford to let $400,000 go.

This is all another arguement for single payer.

[RB TexLa]

4. If walmart is self insured they hire an insurance company to administer the plan

and they would be the one suing.

On edit: You think a government run single payer plan wouldn't sue if another party was found to be at fault and obligated to pay medical costs?

[Hamlette]

6. but they would be suing in WalMart's name

[dflprincess]

14. If there was a single payer system this woman's medical bills would be taken care of.

she wouldn't have to sue to have them taken care of.

[RB TexLa]

17. If she hadn't sued, the insurance company would have sued, except they would

only sue for medical costs, no punitive damages or lose of income. A single payer system would do the same thing, they would sue the negligent party for medical costs.


Medicare and medicaid do it every day.

[Hamlette]

7. Wal-Mart is probably still on the hook for future medical expenses

the first day he reported it it sounded like a workers comp case. If so, the comp carrier pays meds forever.

[trayfoot]

5. According to Toobin.......

while the clause is there, there is no mandate that the company sue. Walmart CHOSE to sue in a case where they clearly should have not.

[Hamlette]

10. thanks, I didn't hear that

it seemed odd that it went to court. Most of these are settled out of court because the policy is so clear. Maybe there is something here I don't know about but telling an insurance company to leave $400K on the table is not going to happen.

[CC]

8. When KO did the story yesterday he explained

that clause and that it is in many policies (not all). He also said Walmart may be right legally but it is wrong morally. I am with him on this, many companies would not press the matter when someone is so badly injured. Course this is the same company that paid millions get help improving their image. I hope he keeps bringing it up.

[Thickasabrick]

9. I agree - people should take up a fund for her but I don't think

Wal-Mart should be the worst person in the world for this.

[Thickasabrick]

12. Another reason I agree with you - what if Wal-Mart has done this

to someone in the past - if they make an exception for this case - they open themselves up to lawsuits from past people they've recovered funds from.

[Indykatie]

13. Subrogation and Right to Recover Clauses

are indeed common in group health plans. They typically allow the health plan or Employer to recover what was paid less "reasonable" associated legal fees which can range up to 40%. This does not appear to be a very good settlement if the medical costs totaled almost $500,000 when you assume the attorney walked away with at least $333,000 of the 1 million dollar settlement. Health Plans or Employers routinely accept less than what they have coming so I fault the attorney who had to know there would be a health plan waiting for reimbursement for not negotiating a settlement with Walmart for his client. Often times the attorneys ends up with more money than the injured party in these cases where money has to be repaid for medical claims paid by the person's group insurance.

[Hamlette]

18. that is exactly right

you must notify the insurance company when you go after the 3rd party and usually a settlement is worked out far in advance of the verdict or settlement.

I thought KO said the settlement was $700K or $750K and the woman got $400 of that so the attorney was well compensated or the costs were high.

[lonestarnot]

15. Fuck the insurance companies! Leave the woman be!

[melody]

16. He's absolutely right

I'm sorry, I don't give a damn what the legalities are, I could have legally gone after my disabled
stepmother for part of my dad's estate, but I didn't because I would prefer she live in reasonable comfort
to having an extra chunk of money that I don't really need. There's "right" and then there's "right".
I have a conscience. Walmart clearly does not.

[Hamlette]

19. there is no bright line

where do you draw that line?

I admit I don't know all of the facts here but if WalMart is on the hook for all her meds and she's in a nursing home, what's she gonna do with $400K anyway?

I prefer insurance costs stay as low as possible. Barring double recover is one way.

[shraby]

21. That nursing home costs at minimum $6000 per month.

Doesn't take long to eat up a chunk of money that way.

[melody]

22. Oh, maybe the 400K might make her bleak life a little brighter?

What the hell is Walmart going to do with it?

There are more important things than money - bottom line or not.

[RB TexLa]

20. Wal-mart has no authority to override decisions of the administrator of their health

plan. No company does.

[melody]

23. They could have done the right thing and not pressed the matter

You're going to tell me in a company so powerful as to make local governments change their political stance, that
Walmart couldn't make a couple of calls and release the money back to that poor woman?

I'm sorry -- I think this is monstrous. I'm a businessperson, but I would NEVER do something like this ... and I'm
decidedly poorer than Walmart.

[RB TexLa]

24. No company can override a health care plan administrator

If you hired a company to administrate your self insured health plan and didn't like something they did, the only recourse you would have would be to not renew their contract to administer the plan.

Wal-mart doesn't control the money in a self insured plan, they can not release anything out of it, and there are no calls they can make to cause that to be done.

[melody]

26. And it's somehow against corporate policy to write a check?

Or send a bank wire or something? Or maybe give them a donation and say "you gave a son, we don't need the money"?

[magellan]

25. Her lawyers should have realized this would happen

...and gotten enough to cover everything PLUS the repayment to her insurance. That's fairly standard practice and it sounds like maybe they dropped the ball.

On the other hand, and unsurprisingly I might add, Walmart are being real jerks. How many of their employees find themselves disabled for life, have won a settlement against the non-related company, AND have just lost a son in Iraq? The circumstances are quite unique. They can do the right thing without fear of a slippery slope.