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Re: The Rogak Report: The Most Useful Publication In The Insurance Claims Industry New Law Nixes Health Care Subrogation Rights

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  • judith paulding
    Be still my heart. Christmas came early! ________________________________ From: Fran Kanterman To: TheRogakReport@yahoogroups.com
    Message 1 of 9 , Dec 1, 2009
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      Be still my heart. Christmas came early!


      From: Fran Kanterman <frankanterman@...>
      To: TheRogakReport@yahoogroups.com
      Sent: Tue, December 1, 2009 6:54:17 PM
      Subject: RE: The Rogak Report: The Most Useful Publication In The Insurance Claims Industry New Law Nixes Health Care Subrogation Rights

       

      This is great- who do we thank for this!?  Oh yeah that fabulous Governor of ours! -- Fran Kanterman

      Hey! What do you want from the guy?? He's blind! He thought he was signing an autograph!-- Larry Rogak

       


      From: TheRogakReport@ yahoogroups. com [mailto: TheRogakReport@ yahoogroups. com ] On Behalf Of Lawrence
      Sent: Tuesday, December 01, 2009 4:48 PM
      To: TheRogakReport@ yahoogroups. com
      Subject: The Rogak Report: The Most Useful Publication In The Insurance Claims Industry New Law Nixes Health Care Subrogation Rights

       

       

      NEW LAW ELIMINATES HEALTH INSURER SUBROGATION ON BODILY INJURY CLAIMS

      Effective 12 November 2009, health insurers may no longer seek reimbursement or assert subrogation rights against personal injury or wrongful death suits brought by their policyholders. 

      The new General Obligations Law §5-335 now bars any benefit provider, such as an HMO or private health insurer, from seeking any reimbursement or subrogation against any settling party to a personal injury or wrongful death action with respect to benefits it may have paid or is obligated to pay. The only exceptions are for claims for which there is a statutory right of reimbursement (e.g., Medicaid, Medicare, workers' compensation) and subrogation claims to recover excess no-fault benefits.



      This new law directly overrules two Court of Appeals decisions, Teichman v. Community Hosp. Of Western Suffolk , 87 N.Y.2d 514 (1996), and Fasso v. Doerr, 12 N.Y.3d 80 (2009), to the extent they recognized non-statutory rights for reimbursement or subrogation against a settling party.



      This law takes effect immediately and applies both to future actions and all pending cases that have not settled or gone to trial as of 12 November 2009.



      APIP subrogation claims are specifically excluded from the parameters of the new law.  APIP subrogation differs significantly from health insurance subrogation in that APIP recoveries are made from a tortfeasor's liability insurance policy.

      The Governor's bill also eliminates the exception under CPLR §4545 that barred a public employer sued by its employee from reducing a future lost earnings award by the amount of future pension benefits that plaintiff will receive (Iazzetti v. City of NY, 94 N.Y.2d 183, 701 N.Y.S.2d 332 [1999]). Under this new law, a public employer sued by its employee will now be entitled to the same collateral source setoff for future benefits as all other defendants are already entitled to receive.  Unlike the new GOL §5-335, this amendment to CPLR §4545 applies only to actions commenced on or after its effective date.


      The third party administrators that handle health insurance subrogation claims in New York are certain to have a hemorrhage over this, but their recovery rights in New York were always problematic, for reasons I have explained in past issues of this newsletter.   These TPAs used to argue with me that Federal law trumped New York court decisions which always leaned against their position (holding, for example, that health insurers never have a "lien" against tort recoveries), because health insurance policies are ERISA-qualified plans.  

      True, this new GOL section does abrogate contractual rights, but that's nothing new.  Unfortunately, eliminating this source of income for health insurers will probably be factored in to the cost of New York health insurance policies, driving rates up even higher.

      Larry Rogak

       


    • wsalas
      Larry-ILMAO....STOP PICKING ON THE POOR GOVERNOR!-Willy Salas That blind / autograph bit killed me!!! ... From: Lawrence Subject:
      Message 2 of 9 , Dec 2, 2009
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        Larry-ILMAO....STOP PICKING ON THE POOR GOVERNOR!-Willy Salas
        That blind / autograph bit killed me!!!
        --- On Tue, 12/1/09, Lawrence <insurancelawyer@...> wrote:


        Willie!! You read my newsletter??? -- Larry

      • judith paulding
        Dear Mr. Rogak, The TPA s are responding that the claimants health plan is an entirely self-funded employee welfare plan that is governed by the Employee
        Message 3 of 9 , Dec 15, 2009
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          Dear Mr. Rogak,
           
          The TPA's are responding that "the claimants health plan is an entirely self-funded employee welfare plan that is governed by the Employee Retirement Income Security Act of 1974 {ERISA] 29 U.S.C. Sec. 1001 et. seq. State anti-subrogation laws are preempted" 
           
          Do you know of any case law coming on this yet? I think they are wrong in as much as  we are both aware that New York has a "collateral source"  rule. Your thoughts?
           
          Judith Paulding Esq.



          Larry Rogak responds: "The TPAs have been saying that all along. But New York courts simply refuse to accept the ERISA pre-emption argument. The health insurers and their TPAs have been arguing for years that ERISA trumps New York subrogation law, but not only do the Courts not acknowledge that, but now the Legislature has eliminated that argument by statute. In my opinion, the ERISA argument falls because Congress did not specifically put pre-emption language in that statute with regard to State subrogation laws. Not all Federal laws automatically pre-empt all State laws. Congress must first state or imply that it does. ERISA may well pre-empt State laws on retirement plans, but not when it comes to subrogation rights. You can quote me when I say that health insurer subrogation on personal injury recoveries is a dead issue in New York, except for the statutory exceptions."



          From: Lawrence <insurancelawyer@...>
          To: TheRogakReport@yahoogroups.com
          Sent: Tue, December 1, 2009 4:47:30 PM
          Subject: The Rogak Report: The Most Useful Publication In The Insurance Claims Industry New Law Nixes Health Care Subrogation Rights

           

          NEW LAW ELIMINATES HEALTH INSURER SUBROGATION ON BODILY INJURY CLAIMS

          Effective 12 November 2009, health insurers may no longer seek reimbursement or assert subrogation rights against personal injury or wrongful death suits brought by their policyholders. 

          The new General Obligations Law §5-335 now bars any benefit provider, such as an HMO or private health insurer, from seeking any reimbursement or subrogation against any settling party to a personal injury or wrongful death action with respect to benefits it may have paid or is obligated to pay. The only exceptions are for claims for which there is a statutory right of reimbursement (e.g., Medicaid, Medicare, workers' compensation) and subrogation claims to recover excess no-fault benefits.



          This new law directly overrules two Court of Appeals decisions, Teichman v. Community Hosp. Of Western Suffolk, 87 N.Y.2d 514 (1996), and Fasso v. Doerr, 12 N.Y.3d 80 (2009), to the extent they recognized non-statutory rights for reimbursement or subrogation against a settling party.



          This law takes effect immediately and applies both to future actions and all pending cases that have not settled or gone to trial as of 12 November 2009.



          APIP subrogation claims are specifically excluded from the parameters of the new law.  APIP subrogation differs significantly from health insurance subrogation in that APIP recoveries are made from a tortfeasor's liability insurance policy.

          The Governor's bill also eliminates the exception under CPLR §4545 that barred a public employer sued by its employee from reducing a future lost earnings award by the amount of future pension benefits that plaintiff will receive (Iazzetti v. City of NY, 94 N.Y.2d 183, 701 N.Y.S.2d 332 [1999]). Under this new law, a public employer sued by its employee will now be entitled to the same collateral source setoff for future benefits as all other defendants are already entitled to receive.  Unlike the new GOL §5-335, this amendment to CPLR §4545 applies only to actions commenced on or after its effective date.


          The third party administrators that handle health insurance subrogation claims in New York are certain to have a hemorrhage over this, but their recovery rights in New York were always problematic, for reasons I have explained in past issues of this newsletter.   These TPAs used to argue with me that Federal law trumped New York court decisions which always leaned against their position (holding, for example, that health insurers never have a "lien" against tort recoveries), because health insurance policies are ERISA-qualified plans.  

          True, this new GOL section does abrogate contractual rights, but that's nothing new.  Unfortunately, eliminating this source of income for health insurers will probably be factored in to the cost of New York health insurance policies, driving rates up even higher.

          Larry Rogak

           


        • judith paulding
          Thank you. I like it!  ________________________________ From: judith paulding To: TheRogakReport@yahoogroups.com Sent: Tue, December 15,
          Message 4 of 9 , Dec 15, 2009
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            Thank you. I like it! 


            From: judith paulding <jpesq1@...>
            To: TheRogakReport@yahoogroups.com
            Sent: Tue, December 15, 2009 4:07:31 PM
            Subject: Re: The Rogak Report: The Most Useful Publication In The Insurance Claims Industry New Law Nixes Health Care Subrogation Rights

             

            Dear Mr. Rogak,
             
            The TPA's are responding that "the claimants health plan is an entirely self-funded employee welfare plan that is governed by the Employee Retirement Income Security Act of 1974 {ERISA] 29 U.S.C. Sec. 1001 et. seq. State anti-subrogation laws are preempted" 
             
            Do you know of any case law coming on this yet? I think they are wrong in as much as  we are both aware that New York has a "collateral source"  rule. Your thoughts?
             
            Judith Paulding Esq.



            Larry Rogak responds: "The TPAs have been saying that all along. But New York courts simply refuse to accept the ERISA pre-emption argument. The health insurers and their TPAs have been arguing for years that ERISA trumps New York subrogation law, but not only do the Courts not acknowledge that, but now the Legislature has eliminated that argument by statute. In my opinion, the ERISA argument falls because Congress did not specifically put pre-emption language in that statute with regard to State subrogation laws. Not all Federal laws automatically pre-empt all State laws. Congress must first state or imply that it does. ERISA may well pre-empt State laws on retirement plans, but not when it comes to subrogation rights. You can quote me when I say that health insurer subrogation on personal injury recoveries is a dead issue in New York, except for the statutory exceptions."



            From: Lawrence <insurancelawyer@ yahoo.com>
            To: TheRogakReport@ yahoogroups. com
            Sent: Tue, December 1, 2009 4:47:30 PM
            Subject: The Rogak Report: The Most Useful Publication In The Insurance Claims Industry New Law Nixes Health Care Subrogation Rights

             

            NEW LAW ELIMINATES HEALTH INSURER SUBROGATION ON BODILY INJURY CLAIMS

            Effective 12 November 2009, health insurers may no longer seek reimbursement or assert subrogation rights against personal injury or wrongful death suits brought by their policyholders. 

            The new General Obligations Law §5-335 now bars any benefit provider, such as an HMO or private health insurer, from seeking any reimbursement or subrogation against any settling party to a personal injury or wrongful death action with respect to benefits it may have paid or is obligated to pay. The only exceptions are for claims for which there is a statutory right of reimbursement (e.g., Medicaid, Medicare, workers' compensation) and subrogation claims to recover excess no-fault benefits.



            This new law directly overrules two Court of Appeals decisions, Teichman v. Community Hosp. Of Western Suffolk, 87 N.Y.2d 514 (1996), and Fasso v. Doerr, 12 N.Y.3d 80 (2009), to the extent they recognized non-statutory rights for reimbursement or subrogation against a settling party.



            This law takes effect immediately and applies both to future actions and all pending cases that have not settled or gone to trial as of 12 November 2009.



            APIP subrogation claims are specifically excluded from the parameters of the new law.  APIP subrogation differs significantly from health insurance subrogation in that APIP recoveries are made from a tortfeasor's liability insurance policy.

            The Governor's bill also eliminates the exception under CPLR §4545 that barred a public employer sued by its employee from reducing a future lost earnings award by the amount of future pension benefits that plaintiff will receive (Iazzetti v. City of NY, 94 N.Y.2d 183, 701 N.Y.S.2d 332 [1999]). Under this new law, a public employer sued by its employee will now be entitled to the same collateral source setoff for future benefits as all other defendants are already entitled to receive.  Unlike the new GOL §5-335, this amendment to CPLR §4545 applies only to actions commenced on or after its effective date.


            The third party administrators that handle health insurance subrogation claims in New York are certain to have a hemorrhage over this, but their recovery rights in New York were always problematic, for reasons I have explained in past issues of this newsletter.   These TPAs used to argue with me that Federal law trumped New York court decisions which always leaned against their position (holding, for example, that health insurers never have a "lien" against tort recoveries), because health insurance policies are ERISA-qualified plans.  

            True, this new GOL section does abrogate contractual rights, but that's nothing new.  Unfortunately, eliminating this source of income for health insurers will probably be factored in to the cost of New York health insurance policies, driving rates up even higher.

            Larry Rogak

             



          • royamura
            Not to be a party pooper, but isn t the new GOL § 5-335 limited
            Message 5 of 9 , Dec 16, 2009
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              Not to be a party pooper, but isn't the new GOL § 5-335  limited to subrogation claims against settling defendants?  Where is it said that benefit providers may not commence their own, separate subrogation actions against persons or entities that negligently caused the injuries for which the benefit provider paid benefits?  Am I missing something?  This may have been a legislative undersight, but regardless of ERISA arguments, and aside from TPA's attempts to obtain direct reimbursement of paid health care plan benefits from no-fault insurers (which claims are invalid and wholly defensible), health insurers will contend that this new law does nothing to preclude them from bringing their own tort subrogation actions.  It only prevents them from sticking their hand out for a cut of the BI settlement monies.  Of course, liability insurers facing two suits arising from the same accident won't want to settle one without the other if the value of the injuries plus paid health care benefits implicate coverage limits.

              Larry Rogak responds: That will depend in part on whether the injured policyholder gives a release to the tortfeasor. If he does, there go the subrogation rights, to which the release is a complete defense. If the health insurer then turns against the policyholder, claiming that by giving the release, he breached the contract (the health insurance policy) by impairing its subrogation rights, that claim is barred by the new statute. If he does not give a release, then the health insurer can commence its own suit against the tortfeasor. In that instance the health insurer will be competing with the policyholder for the tortfeasor's insurance limits, just as an APIP insurer does now in a subro action. I'm sure we'll see some creative approaches, but something tells me that the courts will be even less sympathetic to health insurer subro actions than they have been heretofore.

                 17    § 5-335. LIMITATION OF  NON-STATUTORY  REIMBURSEMENT  AND  SUBROGATION
              18 CLAIMS IN PERSONAL INJURY AND WRONGFUL DEATH ACTIONS. (A) WHEN A PLAIN-
              19 TIFF SETTLES WITH ONE OR MORE DEFENDANTS IN AN ACTION FOR PERSONAL INJU-
              20 RIES, MEDICAL, DENTAL, OR PODIATRIC MALPRACTICE, OR WRONGFUL DEATH, IT
              21 SHALL BE CONCLUSIVELY PRESUMED THAT THE SETTLEMENT DOES NOT INCLUDE ANY
              22 COMPENSATION FOR THE COST OF HEALTH CARE SERVICES, LOSS OF EARNINGS OR
              23 OTHER ECONOMIC LOSS TO THE EXTENT THOSE LOSSES OR EXPENSES HAVE BEEN OR
              24 ARE OBLIGATED TO BE PAID OR REIMBURSED BY A BENEFIT PROVIDER, EXCEPT FOR
              25 THOSE PAYMENTS AS TO WHICH THERE IS A STATUTORY RIGHT OF REIMBURSEMENT.
              26 BY ENTERING INTO ANY SUCH SETTLEMENT, A PLAINTIFF SHALL NOT BE DEEMED TO
              27 HAVE TAKEN AN ACTION IN DEROGATION OF ANY NONSTATUTORY RIGHT OF ANY
              28 BENEFIT PROVIDER THAT PAID OR IS OBLIGATED TO PAY THOSE LOSSES OR
              29 EXPENSES; NOR SHALL A PLAINTIFF'S ENTRY INTO SUCH SETTLEMENT CONSTITUTE
              30 A VIOLATION OF ANY CONTRACT BETWEEN THE PLAINTIFF AND SUCH BENEFIT
              31 PROVIDER.
              32 EXCEPT WHERE THERE IS A STATUTORY RIGHT OF REIMBURSEMENT, NO PARTY
              33 ENTERING INTO SUCH A SETTLEMENT SHALL BE SUBJECT TO A SUBROGATION CLAIM
              34 OR CLAIM FOR REIMBURSEMENT BY A BENEFIT PROVIDER AND A BENEFIT PROVIDER
              35 SHALL HAVE NO LIEN OR RIGHT OF SUBROGATION OR REIMBURSEMENT AGAINST ANY
              36 SUCH SETTLING PARTY, WITH RESPECT TO THOSE LOSSES OR EXPENSES THAT HAVE
              37 BEEN OR ARE OBLIGATED TO BE PAID OR REIMBURSED BY SAID BENEFIT PROVIDER.

              Roy Mura

              --- In TheRogakReport@yahoogroups.com, judith paulding <jpesq1@...> wrote:
              >
              > Thank you. I like it! 
              >
              >
              >
              >
              > ________________________________
              > From: judith paulding jpesq1@...
              > To: TheRogakReport@yahoogroups.com
              > Sent: Tue, December 15, 2009 4:07:31 PM
              > Subject: Re: The Rogak Report: The Most Useful Publication In The Insurance Claims Industry New Law Nixes Health Care Subrogation Rights
              >
              >  
              > Dear Mr. Rogak,
              >
              > The TPA's are responding that "the claimants health plan is an entirely self-funded employee welfare plan that is governed by the Employee Retirement Income Security Act of 1974 {ERISA] 29 U.S.C. Sec. 1001 et. seq. State anti-subrogation laws are preempted" 
              >
              > Do you know of any case law coming on this yet? I think they are wrong in as much as  we are both aware that New York has a "collateral source"  rule. Your thoughts?
              >
              > Judith Paulding Esq.
              >
              >
              >
              > Larry Rogak responds: "The TPAs have been saying that all along. But New York courts simply refuse to accept the ERISA pre-emption argument. The health insurers and their TPAs have been arguing for years that ERISA trumps New York subrogation law, but not only do the Courts not acknowledge that, but now the Legislature has eliminated that argument by statute. In my opinion, the ERISA argument falls because Congress did not specifically put pre-emption language in that statute with regard to State subrogation laws. Not all Federal laws automatically pre-empt all State laws. Congress must first state or imply that it does. ERISA may well pre-empt State laws on retirement plans, but not when it comes to subrogation rights. You can quote me when I say that health insurer subrogation on personal injury recoveries is a dead issue in New York, except for the statutory exceptions."
              >
              >
              >
              >
              >
              > ________________________________
              > From: Lawrence <insurancelawyer@ yahoo.com>
              > To: TheRogakReport@ yahoogroups. com
              > Sent: Tue, December 1, 2009 4:47:30 PM
              > Subject: The Rogak Report: The Most Useful Publication In The Insurance Claims Industry New Law Nixes Health Care Subrogation Rights
              >
              >  
              > NEW LAW ELIMINATES HEALTH INSURER SUBROGATION ON BODILY INJURY CLAIMS
              > Effective 12 November 2009, health insurers may no longer seek reimbursement or assert subrogation rights against personal injury or wrongful death suits brought by their policyholders. 
              > The new General Obligations Law §5-335 now bars any benefit provider, such as an HMO or private health insurer, from seeking any reimbursement or subrogation against any settling party to a personal injury or wrongful death action with respect to benefits it may have paid or is obligated to pay. The only exceptions are for claims for which there is a statutory right of reimbursement (e.g., Medicaid, Medicare, workers' compensation) and subrogation claims to recover excess no-fault benefits.
              >
              >
              >
              > This new law directly overrules two Court of Appeals decisions, Teichman v. Community Hosp. Of Western Suffolk, 87 N.Y.2d 514 (1996), and Fasso v. Doerr, 12 N.Y.3d 80 (2009), to the extent they recognized non-statutory rights for reimbursement or subrogation against a settling party.
              >
              >
              >
              > This law takes effect immediately and applies both to future actions and all pending cases that have not settled or gone to trial as of 12 November 2009.
              >
              >
              >
              > APIP subrogation claims are specifically excluded from the parameters of the new law.  APIP subrogation differs significantly from health insurance subrogation in that APIP recoveries are made from a tortfeasor's liability insurance policy.
              > The Governor's bill also eliminates the exception under CPLR §4545 that barred a public employer sued by its employee from reducing a future lost earnings award by the amount of future pension benefits that plaintiff will receive (Iazzetti v. City of NY, 94 N.Y.2d 183, 701 N.Y.S.2d 332 [1999]). Under this new law, a public employer sued by its employee will now be entitled to the same collateral source setoff for future benefits as all other defendants are already entitled to receive.  Unlike the new GOL §5-335, this amendment to CPLR §4545 applies only to actions commenced on or after its effective date.
              >
              >
              > The third party administrators that handle health insurance subrogation claims in New York are certain to have a hemorrhage over this, but their recovery rights in New York were always problematic, for reasons I have explained in past issues of this newsletter.   These TPAs used to argue with me that Federal law trumped New York court decisions which always leaned against their position (holding, for example, that health insurers never have a "lien" against tort recoveries), because health insurance policies are ERISA-qualified plans.  
              > True, this new GOL section does abrogate contractual rights, but that's nothing new.  Unfortunately, eliminating this source of income for health insurers will probably be factored in to the cost of New York health insurance policies, driving rates up even higher.
              > Larry Rogak
              >  
              >
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