By: Cindy Merrell, Esq.
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.
What are the member’s injuries?
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.
What medical expenses can be pursued by either the member or the health plan?
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.
What can a health plan do to pursue recovery?
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.
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.