Crisis of Rising Costs
Due to rising healthcare costs and utilization, health plan premiums in the United States continue to increase. These high costs impact benefits, premium contributions, jobs and wages for both employees and employers.
When individuals suffer serious illness or injury due to dangerous pharmaceuticals, defective medical devices or toxic exposures, healthcare payors and plans are required to pay for the high-cost medical care for that plan participant. High-cost claim activity adversely impacts utilization and premium costs.
The Vital Role of Healthcare Subrogation
Healthcare subrogation is a legal process designed to ensure that the responsible party pays for damages caused to an injured party.
Healthcare costs related to third-party liability should be reimbursed to the payor and not passed on to the organizations and beneficiaries it serves. The manufacturer of a dangerous or defective product should be responsible for treatment costs required as a result of the harm caused by the product. Moreover, payors have legal and contractual obligations to ensure that such costs are recovered from the responsible third party through subrogation.
Unfortunately, healthcare payors and plans typically lack the necessary tools to identify and pursue recovery opportunities in high cost complex claims involving harm caused by dangerous drugs, medical devices or toxic chemicals. Depending on the size and structure of a particular plan, the cumulative effect of these costs can be significant. Ultimately, an adverse impact to a plan’s utilization will affect the design of the plan, the benefits available to participants and the cost of the plan for years to come.
Healthcare Subrogation – Self-Insured Plans
Healthcare benefits plans provided by employers and unions frequently contain a right of subrogation, allowing the plan to recover medical benefits given to an employee or participant if the employee has received a personal injury recovery from a third-party. Plans also frequently provide that if the employee’s or participant’s injuries were caused by a third party, no medical benefits will be paid at all unless and until the employee or participant agrees in writing to reimburse the plan for any recovery. These subrogation provisions, and the rights afforded to health benefit plans provided by employers and unions, are based on the Employee Retirement Income Security Act, 29 U.S.C. § 1001, et seq. (“ERISA”). ERISA is a comprehensive federal statute governing all employee benefits plans, including plans sponsored by employers and unions that provide medical benefits to employees. 29 U.S.C. § 1002(1) and (3). With certain exceptions, ERISA preempts state laws relating to employee benefits plans.
Healthcare Subrogation – Fully-Insured Plans
Plans that are funded by insurance companies may be subject to state laws that regulate the industry. If a plan is funded through insurance purchased by the employer or union, it will be treated as any other group health insurer for determining whether a subrogation claim is enforceable. These plans are routinely subjected to laws which may limit an insurer’s right to subrogation, or may limit or eliminate the insurer’s recovery opportunity. State laws which regulate insurance and limit a fully-insured plan’s recovery rights include the made-whole doctrine, the common fund doctrine, and anti-subrogation statutes. Although non-ERISA plans do not enjoy the benefit of ERISA preemption and may be subject to state laws, there remain significant recovery opportunities for an insurer or fully-insured payer who provides health care benefits to plans and participants in several jurisdictions.
Already Have a Subrogation Program?
Although many payors already have subrogation programs, most are focused on recovering medical costs related to automobile incidents, duplicative payments and slip-and-fall matters. Very few health plans have programs that include a focus on high cost specialized claims. Expenses related to defective medical devices, dangerous pharmaceuticals and toxic exposures are among the most costly and undetected claims.
The Schwarz Mongeluzzi Solution
When it comes to healthcare subrogation, Schwarz Mongeluzzi Law operates at the unique intersection of law and technology. We are true innovators in healthcare subrogation—providing our clients with state-of-the-art systems and approaches. We supplement innovation with knowledgeable and experienced attorneys, enabling payors and plans to obtain significant recoveries from previously unidentified claims in the areas of dangerous pharmaceuticals, faulty medical devices and toxic exposures.
- Healthcare payors and plans benefit from our proprietary and sophisticated claims analysis technology. Using a payor’s own claims data, this technology quickly, efficiently and effectively identifies previously unknown third-party claims with subrogation or recovery potential.
- The attorneys of Schwarz Mongeluzzi Law have extensive experience in healthcare subrogation and complex product liability litigation. We offer the resources and scope of a national firm.
- At Schwarz Mongeluzzi Law, we have a proven process for pursuing recoveries. Our approach is designed to minimize the time and effort required of a payor—while maximizing the recovery and revenue opportunities for our health plan and payor clients.
No Recovery—No Fee
All subrogation cases are supported on a contingent fee. Health plans and payors do not pay a fee or costs associated with investigating or litigating a claim unless and until there is a recovery.