NY Court of Appeals Urges Legislative Action On Insurance Issues (Updated)
I hate medical lien claims when it comes to my clients. And that is because, in New York, the law is unsettled as to when and how an insurance company that provided medical care to an injured party can recoup its payments. Lawyers hate uncertainty.
Today, in Fasso v Doerr, the Court of Appeals tried to tackle the issue. I say “tried” because the legislation is unclear, leaving a vacuum for the court to work in.
The details of this problem will bore most readers to tears, but if you are a practitioner (or policy maker/wonk) you should click on that link and read.
Part III of the decision is the request to the Legislature to clear this mucky area up.
Updated: As noted in the comments by Roy Mura, he has done a long treatment of this case over at his blog, Coverage Counsel. If you find the issue of permissive intervention by insurers to be of interest, as well as the issue of equitable subrogation rights by an insurer that they may have (and if you practice personal injury law you have to be up to date on this, even if you hate the subject), then head over there for a reading of Mura’s post.
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Laws must be clear to avoid any loopholes that may be used or abused by those who would try to capitalize on its flaws.
# posted by Anonymous Postergal : February 27, 2009 10:41 PM
This is a relatively thick and confusing decision, to say the least. Its peculiar procedural posture — with the health insurer having been allowed unopposed to intervene in the personal injury action well after the SOL for a direct claim against the doctor had run — may limit its precedential value, however.
As I said in my post on this case (http://nycoveragecounsel.blogspot.com/2009/03/settlement-between-injured-party-and.html), unless and until the New York State Legislature addresses permissible intervention by health insurers in personal injury actions, injured parties may be better off opposing their health insurers’ motions to intervene. This decision will likely prompt more health insurers to move to intervene in their insureds’ personal injury actions, especially in the Fourth Department, even though the Court seemed critical of but did not rule on permissible intervention by health insurers.
If IHA had not been a plaintiff-intervenor, IHA likely would have been unable to prevent the parties’ settlement from concluding the action. If a health insurer is not allowed to intervene, it can either commence its own subrogation action against the tortfeasor or attempt to recoup its medical expense payments from its insured’s settlement or judgment, provided, of course, that the insured has received monies from the tortfeasor attributable to expenses the health insurer paid.
If the tortfeasor has notice of a health insurer’s subrogation interest and the applicable statute of limitations for pursuing such an interest has not yet run, defense counsel must take that potential claim into account when settling for less than policy limits with the injured party. This decision states that “once a health insurer has paid a claim and the tortfeasor knows or should have known that a right to subrogation exists, the wrongdoer and the insured cannot agree to terminate the insurer’s claim without its consent and such an agreement cannot be asserted as a defense to the insurer’s cause of action[.]” A cause of action that still could be brought, that is.
# posted by Blogger Roy A. Mura : March 02, 2009 3:09 AM