Phia GroupPhia Group Mediahttps://www.phiagroup.com/Media/PostsWelcome to the Subrogation Spherehttps://www.phiagroup.com/Media/Posts/PostId/1310/welcome-to-the-subrogation-sphereBlog,Health Insurance,Healthcare Costs,SubrogationFri, 09 Feb 2024 14:43:40 GMT<p style="margin: 0in 0in 8pt; text-align: justify;"><span style="color:#000000;"><span style="font-size:11pt"><span style="line-height:normal"><span style="font-family:"Calibri",sans-serif"><span style="font-size:12.0pt"><span style="font-family:"Times New Roman",serif">By: Cindy Merrell, Esq. </span></span></span></span></span></span></p> <p style="margin: 0in 0in 8pt; text-align: justify;"><span style="color:#000000;"><span style="font-size:11pt"><span style="line-height:normal"><span style="font-family:"Calibri",sans-serif"><b><span style="font-size:12.0pt"><span style="font-family:"Times New Roman",serif">The Subrogation Sphere Is a Place Where Opponents Become Allies  </span></span></b></span></span></span></span><span style="font-size:11pt"><span style="line-height:normal"><span style="font-family:"Calibri",sans-serif"><span style="font-size:12.0pt"><span style="font-family:"Times New Roman",serif"></span></span></span></span></span></p> <p style="margin: 0in 0in 8pt; text-align: justify;"><span style="color:#000000;"><span style="font-size:11pt"><span style="line-height:normal"><span style="font-family:"Calibri",sans-serif"><span style="font-size:12.0pt"><span style="font-family:"Times New Roman",serif">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. </span></span></span></span></span></span></p> <p style="margin: 0in 0in 8pt; text-align: justify;"><span style="color:#000000;"><span style="font-size:11pt"><span style="line-height:normal"><span style="font-family:"Calibri",sans-serif"><b><span style="font-size:12.0pt"><span style="font-family:"Times New Roman",serif">The Alliance Begins </span></span></b></span></span></span></span><span style="font-size:11pt"><span style="line-height:normal"><span style="font-family:"Calibri",sans-serif"><span style="font-size:12.0pt"><span style="font-family:"Times New Roman",serif"></span></span></span></span></span></p> <p style="margin: 0in 0in 8pt; text-align: justify;"><span style="color:#000000;"><span style="font-size:11pt"><span style="line-height:normal"><span style="font-family:"Calibri",sans-serif"><span style="font-size:12.0pt"><span style="font-family:"Times New Roman",serif">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. </span></span></span></span></span></span></p> <p style="margin: 0in 0in 8pt; text-align: justify;"><span style="color:#000000;"><span style="font-size:11pt"><span style="line-height:normal"><span style="font-family:"Calibri",sans-serif"><span style="font-size:12.0pt"><span style="font-family:"Times New Roman",serif">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. </span></span></span></span></span></span></p> <p style="margin: 0in 0in 8pt; text-align: justify;"><span style="color:#000000;"><span style="font-size:11pt"><span style="line-height:normal"><span style="font-family:"Calibri",sans-serif"><span style="font-size:12.0pt"><span style="font-family:"Times New Roman",serif">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. </span></span></span></span></span></span></p> <p style="margin: 0in 0in 8pt; text-align: justify;"><span style="color:#000000;"><span style="font-size:11pt"><span style="line-height:normal"><span style="font-family:"Calibri",sans-serif"><b><span style="font-size:12.0pt"><span style="font-family:"Times New Roman",serif">No One Wins, but Everyone Wins</span></span></b></span></span></span></span></p> <p style="margin: 0in 0in 8pt; text-align: justify;"><span style="color:#000000;"><span style="font-size:11pt"><span style="line-height:normal"><span style="font-family:"Calibri",sans-serif"><span style="font-size:12.0pt"><span style="font-family:"Times New Roman",serif">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. </span></span></span></span></span></span></p> <p style="margin: 0in 0in 8pt; text-align: justify;"><span style="color:#000000;"><span style="font-size:11pt"><span style="line-height:normal"><span style="font-family:"Calibri",sans-serif"><b><span style="font-size:12.0pt"><span style="font-family:"Times New Roman",serif">Why Does the Alliance Matter? </span></span></b></span></span></span></span></p> <p style="text-align: justify;"><span style="color:#000000;"><span style="font-size:12.0pt"><span style="line-height:107%"><span style="font-family:"Times New Roman",serif">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.</span></span></span></span></p> 1310Digitizing Subrogationhttps://www.phiagroup.com/Media/Posts/PostId/1243/digitizing-subrogationBlog,SubrogationWed, 10 May 2023 15:00:26 GMT<p style="margin: 0in 0in 8pt; text-align: justify;"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif"><span style="font-size:12.0pt"><span style="line-height:107%"><span style="font-family:"Times New Roman",serif">By: David Ostrowsky </span></span></span></span></span></span></p> <p style="margin: 0in 0in 8pt; text-align: justify;"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif"><span style="font-size:12.0pt"><span style="line-height:107%"><span style="font-family:"Times New Roman",serif">When it comes to subrogation, The Phia Group has over 20 years’ experience serving clients nation-wide. Our attorneys are some of the industry’s most well-versed subrogation experts who can relate to a wide swath of health plans – from self-insured to Medicare-based ones. But we know there can be a great deal of attrition and stiff competition in the subrogation space, which is why for the better part of the past decade there has been a company-wide initiative to digitize our products, most notably <em><span style="background:white"><span style="color:black"><span style="font-style:normal">The Phia System</span></span></span></em><span style="background:white"><span style="color:black">™</span></span> and Case Management System. </span></span></span></span></span></span></p> <p style="margin: 0in 0in 8pt; text-align: justify;"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif"><span style="font-size:12.0pt"><span style="line-height:107%"><span style="font-family:"Times New Roman",serif">What has our digital transformation entailed? At its core, the web-based enterprise digital transformation has incorporated Artificial Intelligence (AI), web-based enterprise digital architecture, and data science into our platform of services, automating and thus expediting our internal processes. Now equipped with enhanced digital resources – including best in class integration tools for data collection and analysis as well as advanced algorithms for case identification – our case handlers have one stable digital platform to contact attorneys and third-party carriers and resources to learn about case law. Not to mention, they also have access to one go-to portal for all pertinent information and data files. </span></span></span></span></span></span></p> <p style="margin: 0in 0in 8pt; text-align: justify;"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif"><span style="font-size:12.0pt"><span style="line-height:107%"><span style="font-family:"Times New Roman",serif">Furthermore, such digitalized automation means that case handlers are able to collect needed information, run analysis, and work the file to conclusion while monitoring the case through all stages. Another critical feature of the cloud-based platform is our web portal client wizard which allows us to digitally share information back and forth with clients. In other words, when a case handler is in the Case Management System, they don’t have to communicate via email or other functions – they can simply converse with pertinent stakeholders within the portal, which also doubles as a tool for informing executives of case status. </span></span></span></span></span></span></p> <p style="margin: 0in 0in 8pt; text-align: justify;"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif"><span style="font-size:12.0pt"><span style="line-height:107%"><span style="font-family:"Times New Roman",serif">But ultimately, the chief beneficiary of this yearslong, multimillion-dollar investment into AI and data science is our valued clients, ones who rely on our subrogation services to protect plan assets for their hardworking participants. With our aforementioned array of technology products, we can identify one active case per 150 lives, and in so doing, not just maximize recoveries but also safeguard our clients’ best interests by lowering premiums, deductibles, and out-of-pocket expenses for American employees from coast to coast. After all, our primary mission is to prioritize the best interests of said employees (currently, there are north of 25 million lives) and in order to do so we need to be highly efficient. </span></span></span></span></span></span></p> <p style="margin: 0in 0in 8pt; text-align: justify;"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif"><span style="font-size:12.0pt"><span style="line-height:107%"><span style="font-family:"Times New Roman",serif">Hence, what we like to call the Phia advantage. </span></span></span></span></span></span></p> 1243Maximizing Subrogation and Reimbursement in Medical Malpractice Claimshttps://www.phiagroup.com/Media/Posts/PostId/1231/maximizing-subrogation-and-reimbursement-in-medical-malpractice-claimsBlog,SubrogationMon, 13 Mar 2023 12:10:53 GMT<p style="margin-top:0in; margin-right:0in; margin-bottom:8.0pt; margin-left:0in; text-align:justify"><span style="font-size:12pt"><span style="font-family:"Times New Roman",serif">By: Cindy Merrell, Esq. <span style="font-size:14.0pt"></span></span></span></p> <p style="margin-top:0in; margin-right:0in; margin-bottom:8.0pt; margin-left:0in; text-align:justify"><span style="font-size:12pt"><span style="font-family:"Times New Roman",serif">The idea of healthcare subrogation and reimbursement seems straightforward. A third party causes an injury to a plan member and the Plan seeks recovery for the benefits advanced by the health plan from either the at-fault party or from the proceeds of the settlement. However, it can be much more complicated. Some of the most complex cases occur when a plan member makes a medical malpractice claim. Medical malpractice subrogation and reimbursement typically involve high dollar claims and the member is usually suffering from a permanent condition or has died. These cases can be difficult not only for the member who has suffered injuries, but for the health plans as well. </span></span></p> <p style="margin-top:0in; margin-right:0in; margin-bottom:8.0pt; margin-left:0in; text-align:justify"><span style="font-size:12pt"><span style="font-family:"Times New Roman",serif"><b><span style="color:#0070c0">What are the member’s injuries?</span></b><span style="font-size:14.0pt"></span></span></span></p> <p style="margin-top:0in; margin-right:0in; margin-bottom:8.0pt; margin-left:0in; text-align:justify"><span style="font-size:12pt"><span style="font-family:"Times New Roman",serif">When most people think about medical malpractice, they think of something obvious such as the doctor operating on the wrong organ, etc. However, in practice it can be much more challenging to decide if medical malpractice has even occurred, much less the exact injuries attributed to the alleged error. For example, Mary is scheduled for a nephrectomy (kidney removal) due to kidney disease and the doctor causes a bowel injury that goes undetected until Mary shows signs of sepsis days after surgery but it is immediately repaired through a second surgery. Did malpractice take place and what are the member’s actual injuries? The problem in this example is that bowel injuries are a known risk of this surgery and in many states through tort reform require the member to prove not only that the doctor caused the harm, but that the doctor failed to conform to the medical standard of care. Therefore, the doctor would have a valid defense to the member’s claim. </span></span></p> <p style="margin-top:0in; margin-right:0in; margin-bottom:8.0pt; margin-left:0in; text-align:justify"><span style="font-size:12pt"><span style="font-family:"Times New Roman",serif"><strong><span style="color:#4472c4">What medical expenses can be pursued by either the member or the health plan</span></strong><b><span style="color:#0070c0">?</span></b><span style="font-size:14.0pt"></span></span></span></p> <p style="margin-top:0in; margin-right:0in; margin-bottom:8.0pt; margin-left:0in; text-align:justify"><span style="font-size:12pt"><span style="font-family:"Times New Roman",serif">This is the single most difficult issue typically present in medical malpractice healthcare subrogation and reimbursement. In my example above, the plan would have been responsible for paying for the offending surgery and the typical postoperative care regardless of the member’s claim. Mary’s second surgery seems to be an obvious starting point of claims the plan can pursue. However, what about the rehab and aftercare? Most defense (the at-fault doctor) counsel will present experts stating that the member’s aftercare would have not been any different if a second surgery had not been needed. As soon as there is a settlement or a discussion of a medical practice claim, many members’ attorneys will soon adopt the defense’s position as their own to reduce or extinguish the health plan’s reimbursement interest. <span style="font-size:14.0pt"></span></span></span></p> <p style="margin-top:0in; margin-right:0in; margin-bottom:8.0pt; margin-left:0in; text-align:justify"><span style="font-size:12pt"><span style="font-family:"Times New Roman",serif"><b><span style="color:#0070c0">What can a health plan do to pursue recovery? </span></b><span style="font-size:14.0pt"></span></span></span></p> <p style="text-align:justify; margin:0in 0in 8pt; margin-right:0in; margin-left:0in"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif"><span style="font-size:12.0pt"><span style="line-height:107%"><span style="font-family:"Times New Roman",serif">The starting point for us is to determine what the member previously presented as their injuries and damages to the at-fault party. Typically, we are asking to review the Complaint and medical expert testimony. Once we have an understanding of the damages actually alleged and/or proven, we can then pursue a recovery on behalf of the health plan for those related claims. In Mary’s example above, I would push for recovery for the second surgery and all the rehabilitation required after the second surgery if the member had also claimed those damages in their Complaint or demand. </span></span></span></span></span></span></p> <p style="text-align:justify; margin:0in 0in 8pt; margin-right:0in; margin-left:0in"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif"><span style="font-size:12.0pt"><span style="line-height:107%"><span style="font-family:"Times New Roman",serif">Please note, there are many different factors to take into consideration that could impact the Plan’s recovery including individual state laws and they have not all been mentioned here. This is not intended to be a comprehensive review of all medical malpractice subrogation and reimbursement cases. Please contact The Phia Group if you have specific questions regarding medical malpractice subrogation and reimbursement. </span></span></span></span></span></span></p> 1231No Matter the Remedy – No Language, No Luck!https://www.phiagroup.com/Media/Posts/PostId/1217/no-matter-the-remedy-no-language-no-luckBlog,Health Insurance,Healthcare Costs,SubrogationMon, 23 Jan 2023 17:17:44 GMT<p style="text-align: justify;"><span style="color:#000000;"><span style="font-size:11.0pt"><span style="font-family:"Calibri",sans-serif">By: Christopher Aguiar, Esq.<br /> <br /> Recently, the 9<sup>th</sup> Circuit, a jurisdiction that has historically not been kind to benefit plans engaging in third party recovery activity, issued a decision that gives life to benefit plans whose participants shirk their obligations to reimburse their benefit plans from settlements they obtain in third-party liability cases.<br /> <br /> In <u>Mull v. Motion Picture Industry Health Plan</u> (“the Plan”), the plan participant suffered significant injuries in an automobile accident in 2010 after the driver of a vehicle in which she was a passenger drove off a 20-foot embankment. Initially the Plan denied the claims due to the third-party liability, but ultimately agreed to pay the claims after Mull agreed to sign what is commonly referred to as a “signed subro” – an acknowledgment of the Plan’s right to recovery from any settlement Mull may receive.<br /> <br /> The Plan ended up paying over $147,000.00 in benefits, and Mull received a settlement of $100,000.00, but proceeded to refuse to reimburse the Plan in full in accordance with the terms of the Plan.<br /> <br /> Left with very little choice, the Plan then began denying the benefits of everyone in the family to recoup the funds.<br /> <br /> Ultimately, the Court ruled that the Plan could offset the benefits of everyone on the Plan as an alternative, self-help, extra judicial remedy to what is allowed under ERISA § 502(a)(3).<br /> <br /> So, not only did the Court allow a remedy even though the settlement funds had been disbursed by Mull, but it also allowed that remedy to be enforced against other members of the family who never received or had control over the settlement funds arising from Mull’s injuries.<br /> <br /> As surprising as this may all seem, given the previous precedent regarding the exclusivity of Plan remedies, this outcome was made possible largely due to the plan terms that applied to this case. Virtually every single case ultimately rests on the same basic premise: a remedy is only available to a benefit plan to the extent that such remedy is established within the terms of the plan. With <u>Mull</u>, the 9<sup>th</sup> Circuit has confirmed a plan’s ability to enforce other reimbursement mechanisms outside of ERISA’s equitable remedy under 502(a)(3).<br /> <br /> Make no mistake, however …. if your language is lacking, so too will your remedies!<br /> <br /> Call us today if you’re wondering whether your language is sufficient to enforce an offset remedy in the same way the Motion Picture Industry Health Plan enforced it against Mull. </span></span></span></p> 1217Healthcare Subrogation and Reimbursement and Why it Mattershttps://www.phiagroup.com/Media/Posts/PostId/1202/healthcare-subrogation-and-reimbursement-and-why-it-mattersBlog,Reimbursement,SubrogationThu, 08 Dec 2022 19:45:32 GMT<p style="text-align:justify; margin:0in 0in 8pt"><span style="font-size:11pt"><span style="line-height:107%"><span calibri="" style="font-family:">By: Cindy Merrell, Esq. </span></span></span></p> <p style="text-align:justify; margin:0in 0in 8pt"><span style="font-size:11pt"><span style="line-height:107%"><span calibri="" style="font-family:">This holiday season while I am visiting friends and family, I know that there will be the inevitable question out of pure politeness asking me how my work is going. When I first started in subrogation, I felt it was my mission to tell everyone who asked all about healthcare subrogation and my passion for it. Then I realized that I had lost my audience after the word subrogation. </span></span></span></p> <p style="text-align:justify; margin:0in 0in 8pt"><span style="font-size:11pt"><span style="line-height:107%"><span calibri="" style="font-family:">Although I do not anticipate “subrogation” to appear in my child’s sight words this school year, I do think it is important that not only attorneys and those working in the healthcare industry understand the far-reaching impact of healthcare subrogation for the health plans, but also their employees and dependents. </span></span></span></p> <p style="text-align:justify; margin:0in 0in 8pt"><span style="font-size:11pt"><span style="line-height:107%"><span calibri="" style="font-family:"><b><span style="color:#0070c0">What is Healthcare Subrogation?</span></b></span></span></span></p> <p style="text-align:justify; margin:0in 0in 8pt"><span style="font-size:11pt"><span style="line-height:107%"><span calibri="" style="font-family:">Most self-funded employee welfare benefit plans contain a statement in their plan document which allows the Plan to recover benefits in the event a third party caused a member’s injuries. The strength of a Plan’s language is vital to the extent the Plan recovers from the proceeds of a settlement or judgment. </span></span></span></p> <p style="text-align:justify; margin:0in 0in 8pt"><span style="font-size:11pt"><span style="line-height:107%"><span calibri="" style="font-family:">There is distinction between subrogation and reimbursement. The one key difference is from whom the Plan seeks recovery. </span></span></span></p> <p style="text-align:justify; margin:0in 0in 8pt"><span style="font-size:11pt"><span style="line-height:107%"><span calibri="" style="font-family:"><strong><span style="color:#4472c4">From</span></strong><b> <span style="color:#0070c0">Who</span><span style="color:#4472c4">m</span><span style="color:#0070c0"> Does the Plan Seek Recovery?</span></b></span></span></span></p> <p style="text-align:justify; margin:0in 0in 8pt"><span style="font-size:11pt"><span style="line-height:107%"><span calibri="" style="font-family:">Depending on the Plan language, typically, a health plan is seeking reimbursement from the at-fault party’s liability insurance company. For example, Beth is a member of her employer’s self-funded ERISA health plan. She is injured from a motor vehicle wreck caused by Bob. Beth’s health plan pays for Beth’s medical expenses. Beth then retains an attorney to pursue a bodily injury claim against Bob through his auto insurance company. Depending on the severity of Beth’s injuries; applicable state law; and Bob’s policy limits; Beth may also make a claim against her own auto carrier through her underinsurance policy. </span></span></span></p> <p style="text-align:justify; margin:0in 0in 8pt"><span style="font-size:11pt"><span style="line-height:107%"><span calibri="" style="font-family:">If the Plan wishes to pursue subrogation, the Plan will make a claim directly against any potential source of recovery. In my example with Beth and Bob, the Plan would assert a claim for the amount of benefits the Plan advanced on behalf of Beth. Although subrogation appears to be more straightforward, it is not, and, typically, it is more costly with greater risk to the Plan which can run afoul of the Plan’s fiduciary duties.</span></span></span></p> <p style="text-align:justify; margin:0in 0in 8pt"><span style="font-size:11pt"><span style="line-height:107%"><span calibri="" style="font-family:"><b><span style="color:#0070c0">Why Does the Plan Seek Recovery for the Medical Expenses Through Subrogation or Reimbursement? </span></b></span></span></span></p> <p style="text-align:justify; margin:0in 0in 8pt"><span style="font-size:11pt"><span style="line-height:107%"><span calibri="" style="font-family:">Per federal law the Plan Administrator has a fiduciary duty to the Plan. This duty is to operate the plan solely in the interest of the participants and beneficiaries for the exclusive purpose of providing benefits and paying plan expenses. </span></span></span></p> <p style="text-align:justify; margin:0in 0in 8pt"><span style="font-size:11pt"><span style="line-height:107%"><span calibri="" style="font-family:">In my example above, Beth’s health plan has paid for claims that someone else (Bob or his insurance carrier) may be responsible. When those medical expenses are recovered through either subrogation or reimbursement those recovered funds can be used for the benefit of all employees. </span></span></span></p> <p style="text-align:justify; margin:0in 0in 8pt"><span style="font-size:11pt"><span style="line-height:107%"><span calibri="" style="font-family:">In other words, when the Plan’s liabilities are reduced through the subrogation/reimbursement, the fund can maintain the benefits for all employees at a lower cost. The benefits include reducing employees’ premiums, maintaining the viability of the Plan, and many other positive outcomes for both the employer and employees. </span></span></span></p> <p style="text-align:justify; margin:0in 0in 8pt"><span style="font-size:11pt"><span style="line-height:107%"><span calibri="" style="font-family:">Although subrogation and reimbursement may not be a hot topic at holiday parties this year, it does matter to many employers and employees. </span></span></span></p> 1202