There is one little catch to be aware of. As others have said, our insurance company can require you to sign a subrogation agreement under the threat of not covering your bills if you do not. They do this in case there is a lawsuit over your injuries. Now here's the catch. If there is a lawsuit and you win damages, you have to reimburse them for 100% of whatever they paid for your care. This comes out of your NET proceeds, meaning whatever is left over after you pay your lawyer and other expenses. They do NOT share any of the costs of your lawsuit. You have to repay them 100%, even though your lawyer will have taken a third or even half of your settlement before you even get a cent.

 

The insurance company should have been compensated by the responsible party for the cost of the health care before damages are even considered in a lawsuit. Otherwise, it would be the insurance company suing the responsible party in the first place, and the insurance company bearing the burden of (and in turn suing for reimbursement of) the legal costs.

Do you have personal experience with this, or is it something you "heard"?






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Thanks for pointing that out, Tony. Sorry I wasn't more precise. By "damages," I was speaking of a settlement in general and not referring to its specific components like medical expenses, loss of income, pain and suffering, etc.

I'm not an attorney, but I understand that the only way the insurance company can sue to recover payments made to you is through the subrogation clause. That allows them to sue on your behalf, and then they reimburse themselves from whatever settlement you might get. But they usually don't do that. They wait for you to sue, and then they collect 100% of their expenses out of whatever proceeds you wind up with. They do not participate in the investigative and legal expenses up front. Nor do they allow any percentage of the legal fees or other costs to be deducted from their expected reimbursement.

How do I know this? I was seriously injured in an accident resulting primarily from the negligence and/or malfeasance of the employees of a city-owned business. A preliminary private investigation showed that there had been similar prior incidents which were hushed up. However, there was a law that limited the city's legal liability so much that even if I had been awarded the maximum settlement allowed, it still would not have been enough to cover my investigative and legal fees, reimburse the medical insurance company for 100% of their costs, and have anything at all left over. Our medical insurance people specifically told me that they would not participate in any of the legal costs, whether I eventually won or not, and that they would have to be repaid dollar-for-dollar from any proceeds even if that left me with nothing. On top of that, I had to sign that subrogation agreement right then or they could refuse to cover my medical expenses in the meantime.

So I wound up using all my sick leave and vacation (about 5 months worth) to keep my head above water financially, and just let the health insurance cover my medical expenses like any other illness. Because of the city's maximum liability limit and the insurance company's strict subrogation clause, I didn't even bother pursuing a lawsuit. No point in it. There wouldn't have been enough left over to even replace my sick and vacation banks.

When I pointed out that in cases like mine they wouldn't get any of their costs back at all, they said they accepted that as a chance they were willing to take. I was told that accident lawsuits often result in big settlements and they could get 100% of their money back without any of the risks and expenses of filing a suit themselves. Since that got them more money overall, they couldn't make any exceptions and risk setting a precedent that might limit this policy in the future. They acknowledged and accepted the fact that in some cases they wouldn't get any reimbursement at all, but that was overshadowed by winning big in many others. Just a business decision. Can't let an individual's losses get in the way.

 

Thanks for that explanation -- sorry you had to go through the experience.



That's an interesting business strategy.

It's very interesting considering our Company self-insures (Anthem just administers). That makes it our Company's business strategy.






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I received a letter like this after my son broke his arm, about 3 years ago. It was from a Florida law firm.

They sent me a 10-page questionnaire, essentially asking for my son's entire medical history, as well as personal details about our family.

I threw several of them away. Then they called me. I got their address and wrote them a letter. I told them to forward to me:

1. The agreement establishing attorney-client privilege with their firm and my employer and/or my insurance carrier, to include any confidentiality agreements;

2. The document where I agreed to the sharing of personal information with outside entities as a condition of my employment and/or insurance coverage;

3. The justification for requiring my son's entire medical history.

I never heard back from them.

 

Here is the guy that started this.

Lawyer Invented Way for Health Care Insurers to Recover From Accident Victims

Some people have really been screwed by this. Especially if they settled a claim before they even knew what subrogation was.

 

Beware. We agreed to subrogation in our contract. Do a word search for "subrogat" to find where it is used (section 27).

I also have dealt with this following seeing a doctor for a medical condition which was caused by an injury.

I called FDX ALPA and they said the company uses Vengroff and Williams and to take the inquiries very seriously. Otherwise the company and insurance can decide not to pay your medical bills if you don't respond as agreed upon.

 

I just got one of these letters last week. Does anyone know if the entire form has to be filled out (very intrusive) or if I can just say the injury didn't involve a third party and be done?

 

I got one last year. My son hurt his arm playing in our yard. I called them said no other claims and that was it. Case closed.

 

I appreciate the insight on the subject from those that have received a letter like this before.

I did hear back from an ALPA R&I representative on the subject, and as others have mentioned before the letter from Vengroff, Williams & Assoc. is a normal inquiry initiated by Anthem. In my case, calling to report that no other party was involved should suffice and I also shouldn't have to sign/submit the form & agreement.