Wal Mart drops claim to injury award.

[SirNitram]

Link

NEW YORK (Associated Press) - Wal-Mart Stores Inc. is dropping a controversial effort to collect over $400,000 in health care reimbursement from a former employee who is confined to a southeast Missouri nursing home since she suffered brain damage in a traffic accident.

The world's largest retailer said Tuesday in a letter to the family of Deborah Shank it will not seek to collect money the Shanks won in an injury lawsuit against a trucking company for the accident.

Wal-Mart's top executive for human resources, Pat Curran, wrote that Shank's extraordinary situation had made the company re-examine its stance.

Deborah's husband Jim Shank welcomed the news. Family lawyer Maurice Graham of St. Louis said Wal-Mart deserves credit for doing the right thing.

"It's a good day for the Shank family," Jim Shank said in a statement.

Wal-Mart has been roundly criticized in newspaper editorials, on cable news shows and by its union foes for its claim to the funds, which it made in a lawsuit upheld by a federal appeals court.

Insurance experts say it is increasingly common for health plans to seek reimbursement for the medical expenses they paid for someone's treatment if the person also collects damages in an injury suit.

The practice, called "subrogation," has increased since a 2006 Supreme Court ruling that eased it.

Wal-Mart's Curran said the retailer was required by the rules of its plan to seek reimbursement from the Shank's settlement. But she said the case has made Wal-Mart revise those rules to allow for flexibility in individual cases.

"Occasionally others help us step back and look at a situation in a different way. This is one of those times," Curran wrote in the letter.

Shank, 52, lost much of her memory and ability to communicate or walk in a crash between her minivan and a tractor trailer in May 2000. Her family sued the trucking company and won $700,000. Court records show that after attorney's fees and costs, the remaining $417,477 from the settlement went into a trust to care for Shank.

The fund now has about $270,000, the family said.

Shanks' health insurance was through Wal-Mart, where she worked nights stocking shelves. After the Shanks won their lawsuit, Wal-Mart sued the Shank family to recover medical costs totaling about $470,000.

Wal-Mart won its case and subsequent appeals by the Shanks that went as far as the Supreme Court, which closed legal avenues this month by declining to hear the case.

During the case, the Shanks also lost one of their three sons when Jeremy, 18, was killed in Iraq last year while serving in the Army.

The case put a spotlight on the growing use of reimbursement claims by health plans, experts say.

Roger Baron, professor of law at the University of South Dakota and a specialist in health-plan law, said health plans have become "very aggressive" about subrogation since the 2006 Supreme Court decision.

"It's free money. They want the free money," Baron said.

Lynn Dudley, vice president for policy at the American Benefits Council in Washington D.C., said the negative publicity around the case was beginning to draw the attention of lawmakers who might want legislation to stop or limit subrogation.

"Capitol Hill is paying attention," Dudley said.

Baron said Wal-Mart's size _ it is the nation's largest nongovernment employer, with over 1.3 million workers _ means that its willingness to compromise in an individual case may have a wider impact on reimbursement practices by other health plans.

"I'm so pleased to see an element of reason because so much of this subrogation has been about just blindly going after the money," Baron said. Top of page

For those who watch it, Countdown has been publically and loudly shaming Wal-mart nightly for this, and encouraging other news outlets to do the same. I think it worked.

[eyexist]

Can't help but see the irony in this as the fault rests more on the lawyer that handled the settlement than Wal-Mart.

The lawyer should have known that they would have to pay them back and demand a bigger settlement. Wal-Mart had every right to expect compensation.

[Broomstick]

How do you know the lawyer DIDN'T ask for a bigger settlement... but only got $400K? Just because you ask for it doesn't mean you get it.

[SirNitram]

Can't help but see the irony in this as the fault rests more on the lawyer that handled the settlement than Wal-Mart.

The lawyer should have known that they would have to pay them back and demand a bigger settlement. Wal-Mart had every right to expect compensation.

Whence does this 'right' you assert come from?

[Broomstick]

He's a young American. He doesn't know any better.

[Flagg]

Can't help but see the irony in this as the fault rests more on the lawyer that handled the settlement than Wal-Mart.

The lawyer should have known that they would have to pay them back and demand a bigger settlement. Wal-Mart had every right to expect compensation.

Whence does this 'right' you assert come from?

Legally they had a right to it, as it's a stipulation she agreed to when she signed the insurance papers while an employee of Wal-Mart. Morally, it's indefensible.

[eyexist]

Can't help but see the irony in this as the fault rests more on the lawyer that handled the settlement than Wal-Mart.

The lawyer should have known that they would have to pay them back and demand a bigger settlement. Wal-Mart had every right to expect compensation.

Whence does this 'right' you assert come from?

The CNN Newscast which states it as such (Approximately one minute in).

It's awesome that Wal-Mart has opted against recouping expenses, but they were within their rights to recoup monies if the claimaint recieves a settlement.

[Broomstick]

I guarantee that whatever judge or jury awarded that woman that $400K intended it to go to carrying for her - not for reimbursing Wal-Mart.

Such subrogation terms were once unknown, or nearly so, in US health insurance. Now, though, they are becoming more and more common because the insurance companies saw an easy way to cut their costs and to hell with the customers/patients. After all, in the US if you can't work you have no use to society and deserve nothing more than sitting in your own piss and shit in a state-(under)funded nursing home and your family bankrupted.

And people like eyexist don't see that even if it is legal it is still morally wrong. NOWHERE else in the industrialized world is this seen as proper, moral or legal. In ANY other developed country this woman would never have to go to court to guarantee necessary medical care, nor would any corporation be able to recoup costs from a court award given to her.

The situation in the US may be legal, but it is NOT normal nor acceptable to any other civilized nation on Earth.

[Tsyroc]

When I was in the Navy a friend of mine was in a car accident that wasn't his fault. He got a bunch of money from an insurance settlement. The Navy took some of that to pay for his medical bills because he hadn't been wearing his seat belt at the time of the accident.

At the time of the accident seat belt laws weren't everywhere yet but the military was strict about it already.

Anyway, this guy made a full recovery, had plenty of money to blow on stereo equipment, booze, and bullshit from the settlement after the Navy took their chuck and was able to continue his Navy career. I only bring this one up because I think this is an example of where it was probably okay for the insurer to recover some of its costs. However, it's definately not the same as this case with this woman and WalMart.

In that case I wonder if it would have mattered if in awarding her money if the court had specified that it was for long term care, pain and suffering, anything other than payment of past medical bills, if that would have made a difference.

So far the little I've seen it makes it sound like the WalMart insurance contract just says that if you get money they've got first dibs, and that is fucked up. I'd have no problem with WalMart collecting on the part of the award that was for past medical bills, and maybe the courts should take that sort of stuff into consideration, but what they were going to do was just fucked up. This woman's situation is one of the examples when people need and deserve a large settlement. It's not like she or her family were looking to get rich off of a minor injury. She's fucked for life and this money might make the rest of her life a little easier. Assuming what she was awarded hasn't bee sucked up by all the lawyer costs.

[Temjin]

Forgive me for this, but let me get this straight. This woman was paying for health insurance. Health insurance that would pay for anything (well, almost anything, but let's not get into that) that happened to her. Then something bad did happen to her. The insurance company paid for the care just like it's supposed, since the woman paid for the plan.

Then the family quite sensibly successfully sued the trucking company for damages. After all, this woman has had her entire life ruined.

And the company that provided the health insurance sued them for reimbursement? They were actually legally able to do that? Wal-Mart was actually going to win?

What the hell was the point of even buying health insurance then?

[Flagg]

Forgive me for this, but let me get this straight. This woman was paying for health insurance. Health insurance that would pay for anything (well, almost anything, but let's not get into that) that happened to her. Then something bad did happen to her. The insurance company paid for the care just like it's supposed, since the woman paid for the plan.

Then the family quite sensibly successfully sued the trucking company for damages. After all, this woman has had her entire life ruined.

And the company that provided the health insurance sued them for reimbursement? They were actually legally able to do that? Wal-Mart was actually going to win?

What the hell was the point of even buying health insurance then?

Wal-Mart already had won. And yes, it's perfectly legal as has been stated several times already. It's horrid and it's wrong, but what do you expect from a country with for-profit health care?

I really can't say that I have too big an issue with the general idea in practice, though. If you get injured and the insurance company spends several tens of thousands of dollars in medical bills, then why shouldn't they be allowed to collect what they are out if you sue and win? Why should misfortune be turned into a jackpot? The reason that practice should not apply in this case is because the money they received is being used for her current and future care.

[Bounty]

If you get injured and the insurance company spends several tens of thousands of dollars in medical bills, then why shouldn't they be allowed to collect what they are out if you sue and win?

The insurance company isn't "out" a dime. They entered an agreement with the woman to pay for her care in case of an accident using money from her and the other insured employees' contributions; the settlement is a separate fund that they should, in a fair legal system, have no claim to.

If they receive the settlement too, they collect twice. How is that fair?

[Flagg]

If you get injured and the insurance company spends several tens of thousands of dollars in medical bills, then why shouldn't they be allowed to collect what they are out if you sue and win?

The insurance company isn't "out" a dime. They entered an agreement with the woman to pay for her care in case of an accident using money from her and the other insured employees' contributions; the settlement is a separate fund that they should, in a fair legal system, have no claim to.

If they receive the settlement too, they collect twice. How is that fair?

What the fuck are you talking about? How is the insurance company "collecting" anything from someone being injured? The fact is, they aren't! They lose money when they pay medical bills and I can guarantee you they lost quite a bit more than she ever paid in premiums. Of course that's moot since I already stated that they shouldn't be after this woman (or anyone else in her position) because she still requires care and it's morally reprehensible to do so.

But if it's a situation where someone breaks a leg due to someone else's negligence, their insurance company pays out several times what that person had paid in premiums, that person then sues the negligent party in court and either is awarded or settles for an amount equal to or greater than what the insurance company has lost (minus his premiums), then why the hell shouldn't they be allowed to collect what they are out? Why should the person who was injured get a bonanza? The only money he is out from it is lost work, premiums, and co-pay. Why should the rest of the people who pay their premiums have to eat the costs of someone else's (the person who was sued) negligence?

[Bounty]

What the fuck are you talking about? How is the insurance company "collecting" anything from someone being injured? The fact is, they aren't! They lose money when they pay medical bills and I can guarantee you they lost quite a bit more than she ever paid in premiums

But they recoup that cost through the premiums paid by the other insured employees. That's why you pay your insurer, it's so that they can use that money to help anyone that needs it, not just you.

While Wal*Mart was smart enough in this case to add a legal loophole, ideally the agreement between the insurer and the insured forms a closed system: everyone puts money in, everyone gets the guarantee that their costs are covered if and when they need it. That's the obligation the insurer gets paid for, the one Wal*Mart was trying to dodge by claiming, on top of the premiums already paid, the money from potential settlements.

Why should the person who was injured get a bonanza?

Depends on what you consider a "bonanza". The situation in the US is skewered because of America's love of massive payouts; I'd think you wouldn't have the same complaint if damages were limited to verifiable losses.

Why should the rest of the people who pay their premiums have to eat the costs of someone else's (the person who was sued) negligence?

The insurer has to pay for someone else's negligence, because that is their job. Insurance exists to take the burden of unexpected costs, whether through negligence of a third party, force of nature or just dumb luck. Of course, this hinges on the payout from the court case being reasonable, which seems to be rarely the case in the US.

[Keevan_Colton]

So, since Hitler did paperwork and so on for the Holocaust, the Nazi party had the right to round up Jews, gays, gypsys etc...and execute them...right?

Legalism is not a moral code on any real level.

[Flagg]

What the fuck are you talking about? How is the insurance company "collecting" anything from someone being injured? The fact is, they aren't! They lose money when they pay medical bills and I can guarantee you they lost quite a bit more than she ever paid in premiums

But they recoup that cost through the premiums paid by the other insured employees. That's why you pay your insurer, it's so that they can use that money to help anyone that needs it, not just you.

While Wal*Mart was smart enough in this case to add a legal loophole, ideally the agreement between the insurer and the insured forms a closed system: everyone puts money in, everyone gets the guarantee that their costs are covered if and when they need it. That's the obligation the insurer gets paid for, the one Wal*Mart was trying to dodge by claiming, on top of the premiums already paid, the money from potential settlements.

We've already established why this case is abnormal and the process of recouping damages is abhorrent, so I see no reason to use it as an example when I'd be perfectly happy to see legislation imposed to protect people like the Shanks.

Why should the person who was injured get a bonanza?

Depends on what you consider a "bonanza". The situation in the US is skewered because of America's love of massive payouts; I'd think you wouldn't have the same complaint if damages were limited to verifiable losses.

I would consider getting compensated for damages one did not suffer to be a 'bonanza'. You realize that when you sue for things such as medical expenses not specifically limited to co-pays that you're essentially claiming a financial injury that you did not suffer, right? If through your plan you are responsible for paying 10% of your medical bills and you sue for the entire bill, without the intention of forking over 90% of the damages awarded for medical expenses that is fraud.

Why should the rest of the people who pay their premiums have to eat the costs of someone else's (the person who was sued) negligence?

The insurer has to pay for someone else's negligence, because that is their job. Insurance exists to take the burden of unexpected costs, whether through negligence of a third party, force of nature or just dumb luck. Of course, this hinges on the payout from the court case being reasonable, which seems to be rarely the case in the US.

[/quote]

Except that the burden of unexpected costs ceases to be a burden if you receive compensation from the negligent party for your medical bills.

[Glocksman]

You realize that when you sue for things such as medical expenses not specifically limited to co-pays that you're essentially claiming a financial injury that you did not suffer, right? If through your plan you are responsible for paying 10% of your medical bills and you sue for the entire bill, without the intention of forking over 90% of the damages awarded for medical expenses that is fraud.

In this particular case though, wasn't Wal*Mart claiming money as theirs that was intended to pay for this woman's care after the company's liability ended?

I agree that any money awarded to pay for past medical care paid for by her insurer should go to Wal*Mart, but money set aside in trust for her care after Wal*Mart ceases to employ her or pay for her care should be untouchable.

[Flagg]

You realize that when you sue for things such as medical expenses not specifically limited to co-pays that you're essentially claiming a financial injury that you did not suffer, right? If through your plan you are responsible for paying 10% of your medical bills and you sue for the entire bill, without the intention of forking over 90% of the damages awarded for medical expenses that is fraud.

In this particular case though, wasn't Wal*Mart claiming money as theirs that was intended to pay for this woman's care after the company's liability ended?

I agree that any money awarded to pay for past medical care paid for by her insurer should go to Wal*Mart, but money set aside in trust for her care after Wal*Mart ceases to employ her or pay for her care should be untouchable.

I think that even if that weren't the case (I don't know that it isn't) and the money was awarded for past expenses, there should be a legal loophole for people who need the money for future medical care. But of course since we live in America where the law favors Goliath, I doubt that will ever happen.

[Darth Wong]

What the fuck are you talking about? How is the insurance company "collecting" anything from someone being injured? The fact is, they aren't! They lose money when they pay medical bills and I can guarantee you they lost quite a bit more than she ever paid in premiums

But they recoup that cost through the premiums paid by the other insured employees. That's why you pay your insurer, it's so that they can use that money to help anyone that needs it, not just you.

Ideally yes. That's what actuarial mathematicians are for: they try to determine a premium rate to set, so that they will profit while paying for claims and collecting premiums at a certain rate. However, when they calculate these premiums they also take into account such factors as their historical success at denying claims and any other cost-mitigating factors in effect, such as recovery clauses like this.

While Wal*Mart was smart enough in this case to add a legal loophole, ideally the agreement between the insurer and the insured forms a closed system: everyone puts money in, everyone gets the guarantee that their costs are covered if and when they need it. That's the obligation the insurer gets paid for, the one Wal*Mart was trying to dodge by claiming, on top of the premiums already paid, the money from potential settlements.

You're assuming that the actuaries neglected to account for the clawback clause when they calculated their premiums and profits. The fact is that they probably did calculate them, and set their premiums and projected profits accordingly. Remember that these companies, in order to keep their investors happy, must pay a quarterly dividend, and that cost will be factored into the actuaries' calculations as well.

It's ugly and unethical in light of the fact that this is not just any service we're talking about, but that's how private health insurance works. Before they pay off claimants, they have to pay off their shareholders.

[brianeyci]

Flagg you better rethink your idea of "fraud."

Insurance companies and Corporate America want to mitigate "emotional distress" and punitive damages because they don't want to be punished for their problems. They want to nickel and dime everything. Well, if you are fucking confined to a nursing home for the rest of your life, I see no problem in the very least awarding enough money to live the rest of your life without working, and better yet to punish the trucking company for being retarded.

Calling that a "bonanza" is besides the fact. Who cares if it's a bonanza? America has massive payouts, but that's because Corporate America is ruthless, not because American citizens are somehow demanding more than they're worth.

[Coyote]

This is one of those cases where "what is legal is not necessarily just". I'm glad Wal*Mart got smacked down. The money was put in a trust to care for her future needs, and (as Glocksman said) it was to help her now that Wal*Mart no longer employs her...

What can one say, really? Wal*Mart is an evil company, and its exsistence and practices are an excellent antidote to libertarian wanking about how we'd all be better off if The Companies ran things.

[Flagg]

Flagg you better rethink your idea of "fraud."

No, I think I'm pretty much OK on my definition of fraud.

Main Entry:
fraud Listen to the pronunciation of fraud
Pronunciation:
\ˈfrȯd\
Function:
noun
Etymology:
Middle English fraude, from Anglo-French, from Latin fraud-, fraus
Date:
14th century

1 a: deceit, trickery; specifically : intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right b: an act of deceiving or misrepresenting : trick
2 a: a person who is not what he or she pretends to be : impostor; also : one who defrauds : cheat b: one that is not what it seems or is represented to be

Let's see... Going into court and claiming medical expenses you didn't actually incur, being awarded those expenses as damages, and never paying that money to the people (or organization) that did in fact incur those expenses... Sounds alot like fraud to me.

Insurance companies and Corporate America want to mitigate "emotional distress" and punitive damages because they don't want to be punished for their problems. They want to nickel and dime everything. Well, if you are fucking confined to a nursing home for the rest of your life, I see no problem in the very least awarding enough money to live the rest of your life without working, and better yet to punish the trucking company for being retarded.

And if you'd bother to read the fucking thread you'd see that I'm on the side of "don't go after people in that situation whether you have the legal right to or not, and while we're at it, let's make a legal exception for them".

Calling that a "bonanza" is besides the fact. Who cares if it's a bonanza? America has massive payouts, but that's because Corporate America is ruthless, not because American citizens are somehow demanding more than they're worth.

I never called that a 'bonanza' you lying little shit. I specifically used the example of someone with a broken leg who receives money for their medical bills (which had largely been paid for by his insurance company) and who then sues and wins a case against the negligent person who caused them the injury. If they had the majority of their bills paid for by their insurance carrier, sued for the entire bill in court, won, and kept the entire award for medical expenses (despite only paying a fraction of the amount in co-pays), then how the fuck is that not a bonanza?

[brianeyci]

Who cares what fucking side you're on? You made specific claims about fraud, if someone is awarded money any more than "premiums, work and co-pay" it is fraud. I pointed out a specific example, punitative damages, which certainly is in addition to your neutered list.

You're pretty fucking dickless if you think that any award above and beyond the actual monetary cost of injuries is a "bonanza." It's easy to blame America's lawsuit happy culture rather than look at the underlying cause, the Corporate rape of America and lack of accountability.

The problem with your position is it's logically inconsistent. If you are using the word fraud in a legal sense, the court awarded the damages so it is no longer fraud but legal. If you are using it in a less specific sense, they deserve the money. Too fucking bad you can't see you're second guessing the court, and the fact that the people whined after Wal-Mart went after them doesn't change the fact medical expenses were awarded in the first place. Whining is not fraud dumbshit. You make it seem as if they set up a place in the Camen islands ready to ship the 400k over rather than merely complaining.

I answered the crux of your argument: "Why should the person be injured get a bonanza?" It is a perfectly sensible answer, punishment. If you don't accept it then you're just a fucking dumbshit.

[Darth Wong]

Why should the person who was injured get a bonanza? The only money he is out from it is lost work, premiums, and co-pay.

You're forgetting about future costs of the injury. Disability awards usually compensate for lifelong costs and lost opportunities going forward. That's why they're often far in excess of medical costs incurred so far.

Why should the rest of the people who pay their premiums have to eat the costs of someone else's (the person who was sued) negligence?

It's funny; for someone who opposes for-profit health-care, you really don't seem to get the rationale of universal health care. This is EXACTLY the same argument used by opponents of universal health care to argue that it's unjust. After all, it often forces everyone to pay for the mistakes of the few.

[Edi]

Flagg, before you make even more of an ass of yourself, kindly go and read up on the basics of insurance law, negligence and the concept of damages and how it all works and ties together. DW has it right.