Each day, I help personal injury victims resolve their personal injury cases after they have been involved in an accident. The cases are either settled or go to trial. The thing that most clients (and the general population) don’t know is that the day they are awarded any compensation, they may become legally responsible for paying back all the health providers they treated with as well as their health insurance company.
The Common Misconception
“If I’m ever involved in an accident outside of work, the company I work for and their insurance plan are responsible for my medical bills, right?”
Correct, but, you must be aware that health insurance companies seek repayment of medical expenses paid to their insureds if the insured was injured in any kind of accident that resulted in a settlement from a personal injury lawsuit.
The case of Deborah Shank
As reported in The Wall Street Journal in 2007, Deborah’s self-insured employer (Walmart) sued Deborah and her husband, Jim Shank, for $470,000 in medical bills they had paid. Deborah had been the victim of an auto accident when a semi-tractor trailer truck sideswiped the driver’s side of Deborah’s minivan, resulting in severe brain damage to Deborah and sentencing her to a life in a wheelchair, unable to do simple tasks such as feed or dress herself. Walmart was prompt in paying all of Deborah’s medical bills, but what she and her husband didn’t know was that they were responsible to pay the retail giant back for any medical bills paid on Deborah’s behalf.
What Most People Aren’t Aware Of
What Deborah missed in the fine print of her employment agreement was the company’s right to recoup the medical expenses it paid for someone’s treatment if the person also collected damages in an injury suit. The Shanks had filed a lawsuit in 2002 against the trucking company responsible for causing the accident and received a $700,000 settlement, which, after legal fees and other expenses, came out to be $417,000. When Walmart found this out, they sued the couple for almost $470,000 in medical bills they had paid, plus Walmart’s expense of legal fees.
The Shank’s attorney was turned away when he approached Walmart’s attorneys regarding a compromise. The company wanted to proceed with the lawsuit, and they were seeking nothing less than total repayment.
In 2006, a district judge ruled in Walmart’s favor, stating that when Mrs. Shank signed on to Walmart’s health plan she was obligated to abide by its terms.
Every day in our practice we see insurance companies aggressively seeking to get their money back. This is known as subrogation.
In the case of the Shanks, Walmart was eventually “shamed” into dropping the lawsuit due to bad publicity after the story was reported by the press that they were suing a so extensively disabled from a car accident. Walmart made a business decision to drop the lawsuit, which never, ever happens. Insurance companies always want their money back