Wal-Mart changes its' mind

[JARNJ3]

So happy for this family.

Wal-Mart Drops Injured Worker Claim
AP NewsBreak: Wal-Mart Drops $400,000 Reimbursement Claim Against Injured Former Worker
April 01, 2008: 05:46 PM EST

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

 

[EMom]

I would bet a huge percentage of insurance policies include a subrogation clause. Every health ins. policy we have ever had has. While I sympathize with this family, the insurance company's logic makes sense, as the injured party is "double dipping."

Jane is hurt in a car wreck when she is hit by a truck owned by Big Company. Big Company's driver is at fault. Jane has huge medical bills, but it will take a few years to settle with Big Company.....and that's if they EVER pay up. Who will pay Jane's huge medical bills? Her health insurance company, that's who! Health Ins. Co. (HIC)

So even though BigCo is at fault and is legally liable for the medical bills, HIC gets stuck paying them, because goodness knows Jane doesn't have several hundred thousand dollars to fork over. But Jane's HIC has a clause in its contract stipulating that if she should ever get BigCo to pay up for her medical expenses, she will reimburse HIC.

Essentially, HIC will front the money to pay for medical bills that BigCo should rightfully pay (but won't pay for years, if ever) and if Jane ever gets BigCo to pay what they should have paid for in the first place, she will reimburse HIC for the money they fronted her for her enormous medical expenses.

Let's say Jane's medical bills were $300,000. Of course, part of that she would have had to pay in deductibles and copays anyway, but let's assume it was pretty close to the full $300,000. A few years down the road, BigCo pays up that $300,000 (because medicals are the easiest to recoup, much easier than pain and suffering, since they are easier to prove) plus something for loss of future earnings, pain and suffering, etc. Jane has to pay her attorney his share, yada, yada.

If she keeps the $300,000 BigCo pays her for the medical expenses and doesn't repay HIC, then she has double dipped. HIC had paid her medicals and BigCo has paid those same exact medicals. Someone is getting diddled and it's her HIC. The at fault party (BigCo) should be the one to pay, and they finally have. But since HIC paid first, they should ultimately be the recipient of that money, not Jane. If Big Co never paid, that would be a different matter, but they did.

This is a contractual obligation. It's on every health claim I send in. When I was in a wreck and eventually settled, I did so knowing I would have to reimburse the HIC for every cent they paid for medical expenses, prescriptions, etc.

Yes, your heart goes out to these people, but my fear is once again.....the slippery slope. If this gets to be the expectation, will HICs start to balk at paying the medical expenses of those involved in accidents? Will they first insist you sue the responsible party? Will they only pay after you have exhausted those remedies? In other words, might you be given the cold shoulder by your HIC and told to pay your own medical bills, and they'll only reimburse them "down the road" if and when you cannot recover anything from the responsible party?

There is a reason for this contractual clause. The same medical bills can only be paid ONCE.....ethically, that is.

 

[chris1gill]

Walmart should get their money back and we all support them? I don't think so.... This money will surely run out before this woman's life, yet they sued her for more than she even got! My friend is in charge of her company's global benefits and they are self insured, you have no idea HOW MUCH THE COMPANY JUST WRITES AWAY just to keep the employees happy and not leaving the company....

When Walmart can't stand up and support their employees in a situation like this one, it doesn't really speak to their strong community service.

 

[dodukes]

I hate to agree with Emom because i do feel for the family but she is right and every insurance is the same. I work for attorneys and thats the first thing that gets paid is the med bills. Dnt get me wrong i do sympathzie with them but im not sure why they are making a big deal of this particular of the clause, its pretty standard it just sucks in her case.

 

[blitzen2k5]

I hate to agree with Emom because i do feel for the family but she is right and every insurance is the same. I work for attorneys and thats the first thing that gets paid is the med bills. Dnt get me wrong i do sympathzie with them but im not sure why they are making a big deal of this particular of the clause, its pretty standard it just sucks in her case.

Its because it sucks in her case. Yah the law says Wallyworld can get reimbursed but sometimes the legal thing to do isnt the right thing to do. Also this case is bringing light to something that needs to be looked at more closely.

Blitz

 

[chris1gill]

The company is now revamping it's whole health plan so that these cases can be dealt with on a case by case basis and the company will have more discretion.

THAT is the victory for ALL of its employees.

 

[Charade]

Walmart should get their money back and we all support them? I don't think so.... This money will surely run out before this woman's life, yet they sued her for more than she even got! My friend is in charge of her company's global benefits and they are self insured, you have no idea HOW MUCH THE COMPANY JUST WRITES AWAY just to keep the employees happy and not leaving the company....

When Walmart can't stand up and support their employees in a situation like this one, it doesn't really speak to their strong community service.

Walmart gives MILLIONS back to the local communities. They gave tons of stuff (even allowing their store(s?) in NOLA to be ransacked by looters) to NOLA and other disaster relief.

I'm not going to hold this one against them.

 

[chris1gill]

Walmart gives MILLIONS back to the local communities. They gave tons of stuff (even allowing their store(s?) in NOLA to be ransacked by looters) to NOLA and other disaster relief.

I'm not going to hold this one against them.

Yeh, they gave 245 million dollars last year and yet they put this woman's family through Hade's, I'm not giving them much credit for that.... They gave to everyone around them, except one of their own! That just makes it worse. In fact what do they say? Never leave one of your own behind?

 

[EMom]

Not to put too fine a point on it (and God knows as an attorney, I probably ought not point this out) but I don't believe the plaintiff's attorney forked over his fee because "it was the right thing to do." Attorney's fees and costs ran around $300,000 in this case. Granted, the attorney shouldn't be out any money for "costs," but I wonder if he's forfeiting any of his fee out of the goodness of his heart? Mmmmmm....Don't think so.

And I'm usually the first one to defend plaintiff's attorneys since they risk their own time and money on cases. But if this is such an exceptional case, why isn't the attorney making an exception himself? The family has said they don't begrudge him any of his $300,000 fee/costs. The total award was only about $700,000. With injuries like hers and the estimated cost of future care, $700,000 isn't an award this attorney ought to be bragging about.

 

[Charade]

Also this case is bringing light to something that needs to be looked at more closely.

Blitz

Like what?

 

[chris1gill]

Like what?

Like that perhaps many plans are like this, so that people are informed when they are signing their rights away at a settlement that is far below what it should have been. I know what my coverage is, I have two policies, what one doesn't cover the other does, and actually we have a third policy that covers catastrophic injury.... A lot of people (I suspect) have no idea what the limitations of their plans are.

And as for the attorney, he spent at least 4 years working on this between the initial trucking award and then the first Walmart suite and then the appeal, it's a long time. I don't think he should have taken 300 grand, 150, yes, but 300 is a lot. Lawyers are expensive however & Walmart really put them through the wringer on this....

This is a woman who is brain damaged, whose husband may or may not be well schooled, and perhaps they were both taken advantage of by this lawyer.

Regardless, I think we can all agree this is a sad story with one of the saddest endings, I can't imagine learning every day that my son had died in Iraq, that's the saddest part of this, Walmart's antics are second.

 

[EMom]

What I can't figure out is why the family keeps informing her that her son has died. If she's not going to remember it the next day and if it brings her pain each time she "learns" he has died, why don't they just fudge the facts and tell her he's still in Iraq and will be home soon? Wouldn't that be so much more compassionate? And by the next day, would it really make a difference what she had been told?

It was like watching a sideshow attraction: "Watch how she gets heartbroken when we break the news her son is dead, even though she's heard it dozens of times before. Come on, give it a look!" I don't think we needed an actual exhibition to get the point.....Not if it meant causing her grief again. It just struck me wrong.....Like poking a hurt animal with a stick. YMMV.

 

[Charade]

What I can't figure out is why the family keeps informing her that her son has died. If she's not going to remember it the next day and if it brings her pain each time she "learns" he has died, why don't they just fudge the facts and tell her he's still in Iraq and will be home soon? Wouldn't that be so much more compassionate? And by the next day, would it really make a difference what she had been told?

It was like watching a sideshow attraction: "Watch how she gets heartbroken when we break the news her son is dead, even though she's heard it dozens of times before. Come on, give it a look!" I don't think we needed an actual exhibition to get the point.....Not if it meant causing her grief again. It just struck me wrong.....Like poking a hurt animal with a stick. YMMV.

I agree.

 

[chris1gill]

What I can't figure out is why the family keeps informing her that her son has died. If she's not going to remember it the next day and if it brings her pain each time she "learns" he has died, why don't they just fudge the facts and tell her he's still in Iraq and will be home soon? Wouldn't that be so much more compassionate? And by the next day, would it really make a difference what she had been told?

It was like watching a sideshow attraction: "Watch how she gets heartbroken when we break the news her son is dead, even though she's heard it dozens of times before. Come on, give it a look!" I don't think we needed an actual exhibition to get the point.....Not if it meant causing her grief again. It just struck me wrong.....Like poking a hurt animal with a stick. YMMV.

My FIL had alzheimer's (he died this past December at home), and we cared for him in our old houses for 8 years. At the end, it was the same way, he would ask about his brothers and sisters who had died before him, yet when we didn't tell him the truth, he always seemed uncomfortable with our answers. Finally we just kept giving him the truth, time and time again. Again and again and again. I'm sure this woman's situation is much the same, they never stop asking, and at some point you have to tell them and remind them... I know I always thought fudging the facts was the best way to go, but when FIL was in the last six months, there just wasn't any way to fudge the facts without him knowing something was just not right, but he couldn't figure out what, which only made him madder...

 

[allison443]

Not to put too fine a point on it (and God knows as an attorney, I probably ought not point this out) but I don't believe the plaintiff's attorney forked over his fee because "it was the right thing to do." Attorney's fees and costs ran around $300,000 in this case. Granted, the attorney shouldn't be out any money for "costs," but I wonder if he's forfeiting any of his fee out of the goodness of his heart? Mmmmmm....Don't think so.

And I'm usually the first one to defend plaintiff's attorneys since they risk their own time and money on cases. But if this is such an exceptional case, why isn't the attorney making an exception himself? The family has said they don't begrudge him any of his $300,000 fee/costs. The total award was only about $700,000. With injuries like hers and the estimated cost of future care, $700,000 isn't an award this attorney ought to be bragging about.

This is something I was wondering, also. I also wonder why the case was settled for less than the $1 million policy limits of the trucking company. Perhaps there was a liability issue in the motor vehicle accident? I also question why the settlement was not apportioned in such a way as to be payment for pain and suffering or future medical expenses, rather than for past medical expenses and thus subject to the subrogation suit.
Regardless, I am glad the situation was resolved in this woman's favor. I saw in some reports that she is now on Medicaid as well, so hopefully she will get the care she needs.

 

[MrsKreamer]

Walmart gives MILLIONS back to the local communities. They gave tons of stuff (even allowing their store(s?) in NOLA to be ransacked by looters) to NOLA and other disaster relief.

I'm not going to hold this one against them.

This is very true...they were the first to show up with food and water.

 

[ReggieB]

I think one of the other shocking things about this case is that the woman is awarded a $1, 000,000 settlement, but after legal fees only has about $450,000....wow and I thought tax was bad!! I'm only going on what Anderson Cooper had to say on this, so sorry if the figures are a bit wonky!

 

[barkley]

walmart's insurer is doing the same thing almost every insurer has done for years. it's right there in the coverage info. that's given to employees or people who purchase privatly-if the injury/illness is due to another person/company then the insurance company can pursue reimbursement or if the individuals sues then the insurance company seeks their reimbursement from them. very common.

i'm sorry for the other issues this woman has had happen in her life but i don't think it should entitle her to special treatment. and i don't know if she still has her walmart insurance, but if she does it disservices her to not repay. private pay for medical needs are much more expensive than those negotiated with insurance companies so repayment could have left her well below her lifetime cap with a resource that could enable her to pay much less out of pocket for subsequent care.

as for repayment possibly putting her on governement medical. well, i strongly suspect she's already using it. if she worked long enuf she's probably on social security and medicare, and if not if her lawyer was sharp enuf (and most dealing with this are) her trust fund was structured such that it is'nt a countable resource for other medical aide programs and those funds can only be accessed for those services not covered by government programs (i had plenty of clients who had close to a million in these types of trusts and they touched pennies of it because of the way they were structured). oh-and government programs have the same subrogation clause-if you're on them because of an injury caused by another or incur and injury/illness caused by another the government is going to go after reimbursement and failing to cooperate with them (or putting the money into a trust before it's settled) results in your paying up the monies AND being ineligible to services (it's called 'fraud' when it's prosecuted-and it is).

subrogation works to the beneift of the insured as well-if you don't want to have to deal with sueing another person or company for the medical expenses you've incurred it allows you to have your insurer act on your behalf and whatever they negotiate out clears your obligation plus they reimburse you for any out of pocket co-pays or deductables you've incurred. then you can pursue your own wage loss, pain and suffering, anticipated future med. expenses...and the lawyer only gets a cut of that.

 

[Fitswimmer]

walmart's insurer is doing the same thing almost every insurer has done for years. it's right there in the coverage info. that's given to employees or people who purchase privatly-if the injury/illness is due to another person/company then the insurance company can pursue reimbursement or if the individuals sues then the insurance company seeks their reimbursement from them. very common.

i'm sorry for the other issues this woman has had happen in her life but i don't think it should entitle her to special treatment. and i don't know if she still has her walmart insurance, but if she does it disservices her to not repay. private pay for medical needs are much more expensive than those negotiated with insurance companies so repayment could have left her well below her lifetime cap with a resource that could enable her to pay much less out of pocket for subsequent care.

as for repayment possibly putting her on governement medical. well, i strongly suspect she's already using it. if she worked long enuf she's probably on social security and medicare, and if not if her lawyer was sharp enuf (and most dealing with this are) her trust fund was structured such that it is'nt a countable resource for other medical aide programs and those funds can only be accessed for those services not covered by government programs (i had plenty of clients who had close to a million in these types of trusts and they touched pennies of it because of the way they were structured). oh-and government programs have the same subrogation clause-if you're on them because of an injury caused by another or incur and injury/illness caused by another the government is going to go after reimbursement and failing to cooperate with them (or putting the money into a trust before it's settled) results in your paying up the monies AND being ineligible to services (it's called 'fraud' when it's prosecuted-and it is).

subrogation works to the beneift of the insured as well-if you don't want to have to deal with sueing another person or company for the medical expenses you've incurred it allows you to have your insurer act on your behalf and whatever they negotiate out clears your obligation plus they reimburse you for any out of pocket co-pays or deductables you've incurred. then you can pursue your own wage loss, pain and suffering, anticipated future med. expenses...and the lawyer only gets a cut of that.

I'm sure this kind of thing has happened many times to other people because that is how the insurance companies work. This case had the perfect combination of tragedy to make the news-a Gold Star mother and the company everyone loves to hate.

I'm not saying that the situation isn't tragic, of course it is-but to blame Walmart for it isn't really correct given the facts.

I'm another one who can't figure out why they keep torturing this poor woman by telling her that her son is dead EVERY day.

 

[DawnCt1]

Yeh, they gave 245 million dollars last year and yet they put this woman's family through Hade's, I'm not giving them much credit for that.... They gave to everyone around them, except one of their own! That just makes it worse. In fact what do they say? Never leave one of your own behind?

They didn't put this woman through anything. Her attorneys were incompetent. She got got an award that was inadequate to cover her expenses and meet her needs. That isn't Walmart's fault. Now she has effectively won the "insurance lottery".