Saturday, February 21, 2009

Paying It Forward? Insurance Comapnies Call It "Paying It Back"

"Why do I have to pay back (my health insurer) (my auto insurance company) (Medicare) (Medicaid) out of my injury case?" It is one of our clients' most frequently asked questions. Short answer? Because the law basically allows it. Let's take private insurers, like your health or auto insurance companies, first. Almost all states allow private insurers to insert a fine print clause, buried in your health or auto policy, demanding that you reimburse them out of any settlement or verdict if they pay any bills that are due to your injury. This is known as "subrogation.".

If it seems unfair that your own company can get back what it paid out of your settlement, despite the fact that you already pay premiums for this coverage, it's only because it is. In fact, a minority of states prohibit subrogation. But most states, including Ohio, allow it. Sometimes the amount of the reimbursement can be negotiated if there are compelling circumstances. But courtesy of a recent Ohio Supreme Court decision, a health insurance company is entitled to confiscate every penny of your settlement as reimbursement for bills it paid, even if it leaves you with nothing, as I've written about before.

What's more, under federal law, Medicare is entitled to be reimbursed as well if it paid any bills due to an injury and if you obtain a settlment or verdict. Dealing with Medicare to figure out what they paid, and how much they are requesting as reimbursement, is the equivalent of slamming your head against a concrete wall--repeatedly. Frequently, we settle our clients' claims, only to have to wait for months for Medicare to tell us how much they're claiming as reimbursement.

The truth is that we as plaintiffs' attorneys put back millions (and probably more accurately billions) every year into the Medicare coffers as a result of successfully pursuing injury claims. Although I and my clients would prefer not to have to do this, at least with respect to Medicare it serves the purpose of putting money back into a government program that serves society.

But when private insurance companies are getting millions back from their own insureds, who pay premuims for this coverage, or have earned it as a benefit through their employment, the only "benefit" is the abstract, company line insurance industry argument that recovering this money "keeps premiums and costs down."

To that I say "meadow muffins" (syn; see "horse hockey," "crap," "b.s."). If that's the case, why aren't our health insurance premuims going down? As small business owners who provide health care coverage for our employees, our health care premuims have NEVER gone down, and in fact, increase every year. And I'm sure I speak for everyone else on the planet on that score.

"Decreasing health insurance premuims." File that one with "jumbo shrimp," hot water heater," and countless other oxymorons...

Tuesday, February 17, 2009

Everything's Bigger In Texas....Except Justice

How would you like to lose both of your arms AND legs due to a preventable medical error? True story, and it happened to a 53 year old Texas man in 2003. He brought a lawsuit against the infectious disease doctor who apparently didn't diagnose the man's MRSA (methicillin resistant Staphylococcus aureus) hospital acquired infection until it was too late.

A Texas jury found the doctor negligent and returned a verdict for $17.5 million, according to this recent article. However, under Texas medical "reform" laws that arbitrarily cap or limit what injured patients can recover in lawsuits, the judge was required to chop the verdict to $7.5 million--a $10 million discount. This raises some legitimate questions: Should someone get a $10 million discount for being in the wrong? Should anyone get such a discount when a jury made a community decision and set the value being a prisoner in your own body at $17.5 million--or $12.4 or $9.3 million or whatever that figure is?

I'm sure the doctor's malpractice insurance company is very pleased with this law and this result. If this happened in Ohio, our own legislative "caps" would have reduced this man's recovery to his medical bills, lost wages, the future costs needed to take care of him, and a whopping $500,000 for having his quality of life absolutely gutted. And "reforms" such as lawsuit caps were all passed in the name of keeping health care costs down, which, by the way, are skyrocketing.

So let's recap. Lose all your limbs, wait 4 years to get your day in court, prove your case and win...and then get over $50% of it taken away. And put right back into an insurance company's pocket. Reminds me of a quote from a Charleston woman when she learned that South Carolina had voted to secede from the Union shortly before the Civil War: "Pardon me, but is a majority always drunk?"

Monday, February 16, 2009

Ohio Tort Reform Legislation Protects Drunk Drivers

How could Ohio legislators pass laws favoring drunk drivers in court over their victims? They have, and here's how. Let's say you're hit head on by a drunk driver. You shatter your leg, need surgery, rack up thousands in medical bills and lost wages, and go through almost a year of painful physical rehab.

If you file a lawsuit against the drunk driver, you are entitled to possibly two different types of compensation. One is "compensatory damages," which a jury assesses for your past and future medical bills, lost wages, physical pain, and any permanent injuries you will have.

The second form of compensation you might be entitled to is "punitive damages." These damages are separate from an injured person's compensatory damages, and are designed to punish wrongdoers for reckless or outrageous conduct like driving drunk.

Example: You go to trial against the drunk driver/his insurance company, and the jury hears evidence that the driver was two times over the legal limit, and attempted to leave the scene. In that same trial, the jury also hears about how you needed emergency surgery, missed 5 months of work, missed your childrens' ballgames, and had to hire out all the house or yard work you do yourself. If the jury returns a verdict of $100,000 for your compensatory damages and $100,000 in punitive damages, this was all well and proper....until 2005.

Enter "Senate Bill 80"--Ohio's "tort reform" legislation. According to our Legislature, we had a "crisis" and we needed to cut down on "frivolous lawsuits," or so we were told by the insurance industry, manufacturing groups, the Chamber of Commerce, big tobacco, and all the other conglomerates who spent millions in Ohio lobbying for the bill. This bill was a wish list for corporate America, and they got it. One of those gems was a provision that prohibits a jury from hearing ANY evidence that the driver was drunk until after it decides the amount of compensatory damages (known as "bifurcation," which means to separate out in "legal speak").

Who pushed for this law? Insurance companies. They don't want juries to hear evidence of their insured's outrageous conduct (i.e. the truth) for fear that the jury will return a higher verdict for the injured person. As a result of this law, juries are not told the truth, and we have to engage in a sterilized, fictional version of a trial. For all the jury knows, the drunk driver was coming home from church (instead of the bar where he had 6 shots and 8 beers). And if a judge "bifurcates" a trial, there are now two phases to it--a "compensatory" and a "punitive" phase, meaning a longer and more expensive trial.

Thankfully some judges will refuse to bifurcate a trial despite this new law, and will allow the jury to hear ALL the evidence, including the driver's intoxication, before they return their verdict.

But it amazes me that the Legislature would agree to pass such a law. Why are we protecting drunk drivers who hurt people with the equivalent of a 2500 pound bullet on our highways? What kind of message does excluding evidence of their intoxication at trial send? Where's the "personal responsibility" in that law?

At the end of the day, we have offensive laws like this because insurance companies asked for them to protect their bottom line--plain and simple. I'd love for a Legislator to explain this law with a straight face to a drunk driving victim, or advocate groups like MADD or SADD. Remember the adage you probably heard from your parents or grandparents: "You break it, you buy it?" For Ohio drunk drivers, it now translates to "You break it, we'll bifurcate it."

Tuesday, February 10, 2009

Who Pays For Auto Accident Bills?

“Why should my insurance pay for my bills since this accident was not my fault?” Without a doubt, THIS IS THE NUMBER ONE QUESTION WE HEAR from our clients. And we hear it for good reason: it’s the most worrisome aspect of an injured person’s claim. Clients want to make sure their bills are taken care of in a timely fashion, without being turned over to collections or having their credit impaired.

However, just like the concern over having to use their own collision coverage for fixing their car, many clients question why they should use their own health or auto medical payments insurance (known as “med pay”) if the collision was someone else’s fault. These questions have led me to the following conclusion: the insurance industry has done a terrific job of scaring you into believing that if you actually use your insurance, your rates just might go up.

This is basically bogus, as Ohio law states: “No insurer shall increase the cost of a private passenger automobile insurance policy based on the insured’s involvement in a motor vehicle accident with an uninsured or underinsured motorist,” as long as the accident was not your fault (Ohio Revised Code Section 3937.23).

Secondly, and more importantly, once you understand how insurance companies operate AND how insurance laws work, you won’t want the at fault party’s insurance company “handling your medical bills” – unless you enjoy the equivalent of slamming your head against a brick wall.

Although each insurance company is different, many of their “policies” for handling your medical bills fall into predictable patterns. Some companies will do their best to convince you that you “won’t need an attorney,” or will “work with you” or “treat you fairly,” and will offer at the outset to pay your initial bills. And they may pay the ambulance bill, or the emergency room visit, and maybe even your initial follow up visit to your family doctor. After that, the general rule in my experience is: “Good luck.”

If your medical treatment involves anything more than an ER visit or single doctor bill (like repeated doctor visits, physical therapy, massotherapy, or diagnostic scans such as CT Scans, MRIs, etc), you’ll soon be introduced to the insurance company “auditing process.” This is fancy insurance lingo for a computer generated medical review process that tells the adjuster (who later tells you) WHAT IS REASONABLE MEDICAL TREATMENT FOR YOUR INJURIES.

(The preceding was an excerpt from my free book, "Your Ohio Accident...And How To Level Your Playing Field." To order the book and read more about what you can do to protect yourself when insurance companies deny payment of your medical bills, click here).

Tuesday, February 3, 2009

Our "Sue Happy" Society--Myth Vs. Fact

I hear it all the time: We as Americans sue "at the drop of a hat," are "sue happy," or are trying to hit the "litigation lottery." There are a number of reasons for this. The first is goofball lawsuits which make their way into the media, like the guy who sued the dry cleaners for $54 million for losing his pants (by the way, he sued on his own without a lawyer). Like a dirty bomb, they are poorly constructed but are still capable of doing tremendous damage to how the public views our civil justice system.

Running a close second is the 40 plus years of a sustained propaganda campaign orchestrated by the insurance industry, big business, and The Chamber of Commerce. They have spent billions and billions convincing the public that we are awash in bogus lawsuits that are wreaking havoc on businesses and the economy, in order to lobby for legislation restricting access to our court system. And, lastly, we as attorneys have shot ourselves in both feet with tasteless and moronic TV ads, and offensive "solicitation" letters that land in injured motorists' mailbox even before the hospital bill arrives. Is it any wonder that the public has such a bad perception of lawsuits and attorneys who bring injury lawsuits?

Yet, the perception that we as Americans are suing everyone in sight doesn't square with the reality of what I've seen on a daily basis in over 20 years. Probably 95% of my clients have never made any claim against anybody before they see me. Many of my initial interviews go something like this: Were you ever in any collision before this one? "Yes, my car was totalled and I was banged up and went to the ER and had a doctor visit or 2 but I was fine and all I wanted was my bills paid and that was it." In fact, I see more people who had some sort of legal claim and didn't pursue it (like a consumer ripoff scheme or a potential malpractice claim) than those who did.

Truth is, the number of lawsuits and median jury verdicts in this country is steadily declining every year. A recent study by the U.S. Justice Department revealed that in the country's 75 most populous counties, the number of civil trials decreased by 52% from 1992-2005. Injury or "tort" cases declined by 40%. And the median jury trial verdict was $43,000, a 40% decrease from 1992's median average of $72,000.

If these are the facts, why does the public still believe that we're drowning in lawsuits and juries have gone wild, handing out gazillions at every turn? The answer is simple. The issue of lawsuits and their value in society for redressing wrongs has become an emotional issue, built on perception and "feelings" and not on facts. And in the battle of emotion and perception versus facts, emotion wins.

I think it was Mark Twain who once said: "A lie can travel twice around the world before the truth can put its pants on in the morning." That axiom will trump the old adage "Just the facts, ma'am," every time. And the sad byproduct of it all is that the toxic mix of all the propaganda and our profession's own self-inflicted wounds has only served to cast a wide net of suspicion over legitimately injured people who bring lawsuits.