Who Is At Fault For A Routine Checkup?

When is a routine medical checkup an accident?

I am inclined to say “never,” but my health insurance provider apparently isn’t so sure. After a recent doctor’s visit – admittedly overdue, but not for anything serious – I received a letter on stationery from Oxford (part of the UnitedHealthcare company), informing me of the company’s need to “obtain detailed information concerning this claim, which may be related to an accident and therefore might be the responsibility of another organization, person or insurer.”

Sometimes a checkup is just a checkup. But evidently that will not stand in the way of a search for anyone else the company can attempt to stick with the bill for my care.

This phenomenon is not new. Over a decade ago, long before this blog existed, I wrote a Sentinel article concerning a little boy whose run-in with a glass door led to a trip to the emergency room. The boy’s family, who were also covered by Oxford, received a questionnaire similar to mine a few months after the incident. Since the boy’s parents had no interest in suing anyone, they ignored the first questionnaire. About a month later, another one arrived. I intend to ignore mine; I expect it will not be the only attempt, either.

In both 2003 and 2013, the letters instructed the addressee to send the information to The Rawlings Company LLC. Rawlings Company is a component of The Rawlings Group, an outgrowth of the Louisville law firm Rawlings & Associates, which has come to focus exclusively on “recovery services for [their] health insurance company clients.” In other words, Rawlings helps insurers recoup the cost of caring for injured participants and receives compensation when it succeeds in doing so. Rawlings publishes a treatise on the subject, “The Rawlings & Associates National Subrogation Manual,” which is in its twelfth printing.

The mere fact that my insurer is advising an outside party that I made a medical appointment strikes me as an invasion of my privacy – though I suppose, given the sheer idiocy of the inquiry in connection with a general checkup, it indicates that Oxford is telling Rawlings nothing except that I saw my doctor. I am under no obligation to discuss my medical care with a third party, and I have no intention of doing so.

A quick Internet search reveals that letters such as the one I received are not at all uncommon. Oxford and Aetna, which are popular insurers in the New York area, have used Rawlings’ services. Stephen Jessup, an attorney with the law firm Dell & Schaefer, observed that some of their clients have received letters in connection with disability benefits from Aetna as well.

Laws that determine whether your insurer can sue someone in your stead, a practice called subrogation, vary from state to state. New York’s law was silent on the subject until recently. In November, Gov. Andrew Cuomo signed a bill that amended General Obligations Law (GOL) §5-335, limiting subrogation claims in actions relating to personal injury or wrongful death. This amendment makes it more difficult for health insurers to make subrogation claims against customers who win settlements for personal injuries they have suffered, or against the parties who agree to pay those settlements. New York’s Legislature acted after courts had previously upheld insurers’ claims. One of those cases involved the Rawlings Company; in that case, the U.S. District Court for the Eastern District of New York held that an insured, employer-sponsored health plan could seek reimbursement. The amended law referred specifically to this case.

As I observed in my original article, insurance agreements sometimes include language specifically giving the insurance provider rights to recoup the value of medical services it provided if the injured party receives a settlement or wins a judgment related to that injury. In some cases, these rights are interpreted as a common-law right to subrogation, even if subrogation is not specifically mentioned. How successful this claim will be varies, but it seems likely that insurers that think they have a chance will find it useful to try. After all, an intimidating tone and official letterhead may lead many individuals to voluntarily comply because they do not realize compliance is not mandatory.

I understand why a health insurer that thinks another party should be responsible for the cost of treatment would want to be reimbursed, but in the absence of any specific medical evidence of trauma or assault, the insurer has no place broadly speculating about the cause of medical care. Not every injury is a third party’s fault.

There is a broader societal question that underpins this issue. Say Bert trips and breaks his leg. He goes to the ER, where a doctor sets the broken bone. Bert may decide not to sue anyone for a variety of reasons. Maybe he broke his leg at his parents’ home. He might have just tripped on a sidewalk. He could have been injured playing sports. Any of these scenarios might give rise to a lawsuit if Bert wanted, but that decision ought to be his, as the party who was wronged (if a wrong occurred). The decision should not be up to the health insurer that stands to benefit financially if someone else pays for Bert’s care.

I am not an attorney, and my advice should certainly not substitute for that of qualified counsel. Still, for someone in a position like Bert’s – or mine, or that of the dad whose child put his arm through a glass door – I am inclined to suggest ignoring such specious requests for private information.

When we pay for medical insurance, the insurer is not giving us credit for granting the right to bring the lawsuits we could otherwise bring for ourselves. Beyond the legal complexities of whether or not health insurers have that right, we should think about whether we want to create a society in which every injury is someone’s fault, and it is only a matter of determining whose.

About Larry M. Elkin 553 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

Visit: Palisades Hudson

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