Pennsylvania Injury Law Report : Pennsylvania Personal Injury Lawyer & Attorney : Stuart Carpey Law Firm : Auto Accidents & Product Liability : Pennsylvania Injury Law Report

As reported recently in the International Herald Tribune (12/29/11) and in the New York Times (8/22/11) in excess of 5,000 lawsuits have been filed against medical product manufacturers who produced and sold faulty hip replacements, leaving many patients crippled and facing further surgery. In fact,  the DePuy Orthopedics division of Johnson & Johnson voluntarily issued a recall of it's artificial hips in August 2010.

The most widespread medical implant failure in the United States in decades, involving thousands of all-metal artificial hips that need to be replaced prematurely, has entered the money phase. Medical and legal experts estimate the hip failures may cost taxpayers, insurers, employers and others billions of dollars in coming years, contributing to the soaring cost of health care. The financial fallout is expected to be unusually large and complex because the episode involves a class of products, not a single device or just one company. The case of Thomas Dougherty represents one particularly costly example. He spent five months this year without a left hip, largely stuck on a recliner watching his medical bills soar. In August, Mr. Dougherty underwent an operation to replace a failed artificial hip, but his pelvis fractured soon afterward. The replacement hip was abandoned and then a serious infection set in. Some of the bills: $400,776 in charges related to hospitalizations, and $28,081 in doctors' bills....The so-called metal-on-metal hips like Mr. Dougherty's, ones in which a device's ball and joint are made of metal, are failing at high rates within a few years instead of lasting 15 years or more, as artificial joints normally do.The wear of metal parts against each other is generating debris that is damaging tissue and, in some cases, crippling patients.

But who is going to be the financial beneficiary of these lawsuits? Medicare and private health insurers who paid for the initial surgeries and who will pay for additional surgeries and other medical care to the victims of the faulty implants.

Again, from the International  Herald Tribune article:

Insurers are alerting patients that they plan to recover their expenses from any settlement money that patients receive. Medicare, the government health program for the elderly, is also expected to try to recover its costs....To recoup their expenses, insurers typically notify patients through lawyers that they expect to be reimbursed from any settlement money that patients receive, rather than pursue their own lawsuits with the device makers. Also, Medicare is expected to enforce new laws next year that will make it easier for the agency to recover taxpayer dollars spent treating patients injured by problem drugs and medical devices.

How can this be? How is it that public and private health insurers are first in line to be paid from personal injury and product liability suits from these cases? Shouldn't the injured victim, the patient, be the one to recoup his or her financial and physical losses? The patient, who has gone through the agony of hip replacement surgery, now facing more surgery, is the one who has suffered. Why should an insurance company get a free ride on the back of the injured patient's lawsuit? 

It's called subrogation. And although none of my clients are ever willing to accept the concept when first explained to them (and with good reason because it is they who paid for the private health insurance coverage!), subrogation is nevertheless a legal and equitable right of an insurer to be compensated (read: paid back!) for any monies paid on behalf of their insured due to the negligence of someone else. The insurer, be it Blue Cross or Medicare or Medicaid (Department of Public Welfare in Pennsylvania), is, in fact, the first to be paid back before anyone, gets a dime for their pain and suffering. This is true for the attorney that handle personal injury claims. We are not permitted to be paid for the work to generate a settlement or verdict for our clients until the subrogation lien is properly dealt with and paid. (Forget the fact that  the personal injury attorney handling cases where a subragtion lien is involved is essentially an unpaid collection agent for the insurance carrier, but that is an essay for another day).

I have written about subrogation may times before. I want ( and need!) my clients, prospective clients, and the public generally to be familiar with the concept, because I don't want them to be surprised at the end of their case. In the eyes of the law, the insurance carrier who pays health benefits to an accident victim is a victim as well, and but for the wrongdoing of the tortfeasor would not have had to pay any benefits.

As to subrogation in the hip cases ''all these payers want to be paid back,'' says Matt Garretson, the founding partner of the Garretson Resolution Group, a firm in Cincinnati that manages subrogation issues for attorneys in all sorts of cases, including mass tort cases. And the payors will be paid back, because there are stiff penalties, both civil and criminal, to those who fail to pay attention to a subrogation lien in the personal injury case.

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Have you ever tried to price out the cost of a colonoscopy? It can’t be done. Having just turned 50, my PCP (that’s code in the health insurance business for “primary care physician” a/k/a your family doctor) said I should get one done. For anyone who has had a colonoscopy, you, fellow soul mates, know that the actual “procedure” is one that you have no memory of, thank goodness, because of the mixture of anesthesia used which includes some sort of amnesia drug. However, I will spare you, dear readers, any further description of the “prep.” Look it up on Google. It’s no fun. Suffice it to say, be very close to a bathroom at all times.

But I digress. Back to the costs of medical procedures, Google, and health insurance reform. One of the great mysteries of our time, as far as I am concerned, is we as consumers can obtain the price for just about any product or service before we make the decision to purchase. There may be some negotiation in price, for instance in buying a car, but you go in at the very least knowing what the asking price is from the dealership.

When I asked the gastroenterologist's office who was going to do my colonoscopy what the cost of the procedure was, they couldn’t tell me. They provided vague answers dependent on the type of insurance I had. That’s curious to me, because, I, as the consumer of products and services, could not obtain an actual price before I purchased. All I was told was that I had a deductible to pay. What if there ended up being a dispute between my health insurance carrier and my doctor’s office, or the anesthesiologist’s office, or the surgicenter where I was having the procedure done? If I were eventually on the hook for the bill, I sure would have liked to know the costs beforehand. Assume I had no health insurance. Pricing would be much more important.

Come to think of it, whenever I’ve had an X- ray, MRI, or that ACL reconstruction on my right knee, no one ever gave me price information for the test or procedure. Of course, we all know that when we go into a medical provider’s office we sign an assignment of benefits. That allows your doctor to bill and obtain payment from your insurance carrier. But it also says that if payment is not made, your doctor bills you.

Now, of course we don’t choose our medical provider based on the fees they are charging. Usually a host of other factors are involved, including expertise, experience and so on.

John Cogan, in his Wall Street Journal piece, “The Millionaire Retirees Next Door” (5/12/11), argues that

Under the federal government's fee-for-service Medicare program, every time a senior citizen meets with his physician or health-care provider for a check-up, lab tests or surgery, somebody other than the patient foots most of the bill. That such a program should produce runaway costs is hardly surprising. Over the years, the government has expanded the type of services covered, such as prescription drugs, and it has assumed a greater portion of the program's finances. Medicare premiums paid by senior citizens once covered half of the cost of physician and related services. They now cover one-fourth. Copayments once covered nearly 40% of these services' costs. They now cover only 20%.

In the case of non Medicare recipients, we all know that private health insurance is not increasing the amount of the tab that they are picking up. Rather, we as the consumers are. Nevertheless, think of how much more competitive healthcare in this country would become if we knew the cost of care going in?
 

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