[ Wednesday, April 02, 2008 ]


Wal-Mart Abandons Subrogation Claim: This story is off-topic, but interesting for healthcare players. A Wal-Mart employee was hurt in a traffic accident. Her insurance through Wal-Mart (that's right, contrary to what you've been told, apparently Wal-Mart DOES provide insurance to its employees) paid her medical bills, which amounted, apparently, to $400,000. The employee sued the trucking company, and won $700,000. Wal-Mart wanted its $400,000 back.

Wal-Mart was pilloried for seeking back the money it spent, so they decided not to go after it. They changed their plan documents, which made the seeking of "subrogation" (when an insurance company tries to get its money back from a third party award) optional.

But what's wrong with Wal-Mart seeking its money back? The story doesn't say what the $700,000 award was for. Did the jury award the employee $400,000 to cover medical expenses? If so, since Wal-Mart already paid that money, isn't it double-dipping for the employee to keep it?

Besides, where did that $400,000 come from? It came from each and every Wal-Mart employee, stockholder, and customer. Employees could earn more, shareholders could get bigger dividends, and customers could get lower prices, but for the fact that Wal-Mart's self-insured health plan paid $400,000 that should have been paid (and was, in fact, paid) by the trucking company that caused the injuries.

Jeff [10:01 AM]

A couple of points, this was apparently a settlement, not a verdict. There is no indication whether there was any additional coverage available above the amount of the settlement. It sounds patently obvious that she did not recover the full value of her damages.
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