Policy holders in Weatherford, Mineral Wells, Aledo, Azle, Springtown, Willow Park, Hudson Oaks, Millsap, Brock, and other places in Parker County need to understand important reasons for seeing an Insurance Law Attorney.
The El Paso Court of Appeals issued an opinion on April 11, 2012, that is a good illustration for the involvement of an Insurance Law Attorney. The style of the case is, Amy Warmbrod v. USAA County Mutual Insurance Company.
Here is some background:
If someone in Dallas, Fort Worth, Arlington, Grand Prairie, Mansfield, Hurst, Euless, Bedford, Duncanville, or anywhere else in Texas gets involved in an accident and someone besides themselves are at fault, what happens when health insurance pays for the medical bills resulting from the accident? The answer is one you are going to hate. The answer is: It depends.
There are many variables that come into play, some of which have been discussed in previous blogs. Today we are going to discuss what happens when a person’s own personal health insurance company pays for the medical bills incurred as the result of someone else causing injury to you.
Typical health insurance companies are Blue Cross / Blue Shield, Humana, and other names you have heard about and often times this health insurance is provided as a benefit by your employer. The significance of employer provided health insurance is that many times the health insurance provided through employment is a federally regulated plan called Employers Retirement Income Security Act, otherwise known as an ERISA plan.
What is common to a lot of residents of Dallas, Fort Worth, Grand Prairie, Arlington, Mansfield, Benbrook, Burleson, Aledo, and other areas of Texas? One, there are a lot of veterans living in the state and two, there are a lot of people who are behind on their child support payments.
First of all, there is no correlation between the two, except they are easy and short discussions. Let’s talk about VA subrogation first.
When someone is injured as the result of a third person’s negligent activity and the Veterans Administration has paid benefits to the injured person, the VA is entitled to be repaid for the amount of money they spent on the veteran’s behalf. The reimbursement rights of the VA are written into law and are set out in the 1990 case, United States v. Maryland. This is a United States 4th Circuit case and in part says:
What do residents of Dallas, Fort Worth, Grand Prairie, Arlington, Mansfield, Weatherford, and other cities in Texas need to know about subrogation? The answer is, a lot, unless you get an experieinced Insurance Law Attorney helping you.
Another important and potentially risky area of subrogation is Medicaid. Medicaid is a Federal program which is administered by the State. For us Texans, the program is administered by the State of Texas. Anytime you are discussing Federal Government liens and subrogation claims, such as Medicaid, Medicare, Veterans Administration, and a laundry list of others, it is wise to assume that such liens attach to claims and are superior to other liens, even if you have no actual notice of their existence.
Having said the above, it is important to realize that Medicaid and Medicare liens are very different creatures. This is expecially true in light of a recent United States Supreme Court case appealed from the State of Arkansas. This 2006 case is styled, Arkansas Department of Health and Human Services v. Ahlborn. A copy of the July 3, 2006 memo setting forth the Federal Government’s position on Ahlborn’s impact on Medicaid reimbursement / subrogation is available to the public on the Internet at:
A large part of the population in Dallas, Fort Worth, Arlington, Grand Prairie, Weatherford, and most all other cities in Texas receive some form of government benefits. So what happens when someone receiving Medicare benefits gets a settlement in an injury case from an insurance company?
The answer to the above question is, “it depends.”
It should be obvious that if the benefits received by someone on Medicare are unrelated to the claim being made, then there is nothing to worry about. However, if the person receives a settlement based on injuries and medical bills that were paid for by Medicare, then Medicare is entitled to be paid back for any monies they paid for the benefit of the person receiving the benefits.
What if someone in Fort Worth, Arlington, Mansfield, Mesquite, Garland, Irving, Grand Prairie, Dallas, or anywhere else in Texas, is involved in an accident and goes to the hospital for treatment? Are there any special laws that apply?
The answer is yes. It depends on the circumstances, but often times, what is called a “hospital lien” comes into play. If this hospital lien is not properly dealt with it could cost a lot of money and heartache.
Texas public policy strongly supports hospital liens, and it is important to understand that these liens are not just applicable to hospitals; they may also operate for the benefit of EMS providers and doctors at teaching hospitals whose bills are not already included in the bill. The rights of hospitals and certain other medical providers to be paid from settlement proceeds or a judgment begins with the Hospital Lien Statute. This is found in the Texas Property Code, Chapter 55. It says, in relevent part, that a lien attaches to “any cause of action, judgment, or settlement” received as a result of an accident for which the person was admitted to a hospital within 72 hours of the injury, as well as any hospital to which the injured person is subsequently transferred for the same injuries. This is found in Texas Property Code, Section 55.002. These hopital liens must be filed prior to settlement in order to be valid, and hospital liens are limited to “reasonable and regular” charges within the first 100 days following the injury. Even the attorney representing the injured person may have to wrestle with the hospital for first priority, as seen in the Texas Supreme Court case styled, Bashara v. Baptist Memorial Hospital System, decided in 1985.
What is a lien? The person in Flower Mound, Haslet, Saginaw, Irving, Carrollton, De Soto, Grand Prairie, Arlington, Mansfield, Fort Worth, or anywhere else in Texas may ask that question.
Generally speaking, in the insurance context a lien is a right to money that a third person may eventually get. Others describe it as a property right which remains attached to an object tht has been sold, but not totally paid for, until complete payment has been made. Another way of putting it is, a hold or claim which one person has upon the property of another as a security for some debt or charge.
In the insurance world a lien normally arises where some person or business causes injury to someone. After the injury, the injured person seeks and receives medical care that his personal health insurance pays for. When this occurs the health insurance company will usually have a subrogation lien against the person or business that caused the injury.
What if a policyholder in Grand Prairie, Arlington, Fort Worth, Dallas, Weatherford, or anywhere else in Texas, collects uninsured motorist benefits from their insurance company and then later makes a claim against the at fault driver, do they have to pay back their insurance company? The general answer is yes, but there may be a few exceptions, depending on the circumstances.
This issue came up in the case, State Farm Mutual Automobile Insurance Company v. Shannon Perkins, et al. This case was decided by the Texas Court of Appeals in Eastland, Texas. It was an appeal from the 35th District Court, Brown County, and was decided July 13, 2006.
The background facts are that Shannon Perkins was involved in an automobile accident with Mike Cooper Jr. on May 22, 2003. Perkins was injured in the accident. Cooper was driving a truck owned by Harold Oaks. Cooper did not have insurance. State Farm Mutual Auomobile Insurance Company (State Farm) paid Perkins $25,000 in uninsured motorist benefits. Oaks had an automobile liability policy with State Farm. Perkins sued Oaks for her injuries. State Farm intervened in the lawsuit saying they were entitled to subrogation on the $25,000 they had already paid. At trial the jury awarded Perkins $53,000 for her injuries. State Farm insisted that they were intitled to $25,000 of that amount.
What if you just settled your insurance claim with the person who caused your financial loss. And lets say you live in Grand Prairie, Arlington, Dallas, Fort Worth, Weatherford, or anywhere else in Texas. What happens if your own insurance company sends you a letter asking for a return of money they paid on your behalf?
The case law in Texas is pretty simple sounding. When an insured settles with or releases a wrongdoer from liability for the loss before payment of the loss has been made by the insurance company, the insurer’s right to subrogation ends. This was stated in 1991, in the Houston Texas Court of Appeals case, Interstate Fire Insurance Co. v. First Tape, Inc.
In this case, Gary Pentecost (Pentecost) owned a commercial building which was insured by Interstate Fire Insurance Company (Interstate). Pentecost leased the building to First Tape, Inc. (First Tape). The lease between Pentecost and First Tape contained a clause on insurance and liability that read in relevant part that the two mutually agreed to release each other from liability for any acts of negligence that caused harm to the building and further agreed that there would be no rights of subrogation by their respective insurance companies. Further, the lease was transferable.
What if a resident of Grand Prairie, Weatherford, Dallas, Arlington, Fort Worth, or some other Texas city, suffers a loss because of some other persons negligence. Their own insurance company pays for the loss. Then the other persons insurance company pays for the same loss. What happens next?
This is where “contractual subrogation” rears its head. Contractual subrogation arises by virtue of an agreement between the parties and is awarded under that agreement, usually but not always, subject to the dictates of equity.
The Texas Supreme Court case dealing with this is, Fortis Benefits v. Cantu. This was a case decided in 2007. Here the Texas Supreme Court held that an insurance company, here Fortis Benefits, could recover benefits from the insured’s (Cantu) settlement even if the insured is not made whole. In this case, Cantu was severly injured in an automobile accident, and later sued several defendants. The health insurer, Fortis, intervened in the case, asserting a right of subrogation on its prior payments to Cantu. Cantu settled with the various defendants, and Fortis sought to recover solely from Cantu. Cantu, who had not recovered enough from the settlement and from Fortis to cover her actual damages, argued the “made whole” doctrine. In other words, she argued that she should not have to repay Fortis until all her damages had been paid and she was “made whole.” The court disagreed with Cantu, saying the “made whole” doctrine did not apply because in the Fortis insurance contract there was language saying that Fortis was entitled to recover for all the benefits it had paid if and when the insured made a recovery against a third party.
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