It is common for health and disability (lost wages) insurance companies to pay benefits to their insureds who have been injured through the negligence of others. Most of the insurance policies contain language granting the insurance company a right of reimbursement for the money it has paid out from the proceeds recovered by the insured in the personal injury case for the same losses.
How much must be repaid depends on policy language and who is paying the settlement or judgment in the personal injury case.
Many of the insurance policies provide that the carrier has the right to be reimbursed in full up to the amount recovered in the liability case before the insured and the insured’s attorney receive penny one. When the compensation is paid by a tortfeasor, who is the person or entity responsible for causing the harm, reimbursement is determined by the formula set forth in section 768.76(4), Florida Statutes. The statutory formula applies even where the insurance policy calls for full reimbursement to the carrier first. In Ingenix v. Ham, 35 So.3d 949 (Fla. 2nd DCA 2010), Gerald Ham’s health insurer, UnitedHealthcare, paid almost all of Ham’s medical bills relating to a medical procedure that ultimately resulted in his death. After settling with the medical providers (i.e., tortfeasors) in a medical malpractice lawsuit, Ham’s estate contended that it was only required to reimburse UnitedHealthcare a reduced amount according to the formula set out in section 768.76(4), Florida Statutes (2008). UnitedHealthcare took the position that it was entitled to full reimbursement in accordance with the language of its policy. The court held that section 768.76(4) controlled, limiting UnitedHealthcare’s reimbursement to the formula under section 768.76(4).
The court relied on the following language in 768.76(4):
“A provider of collateral sources that has a right of subrogation or reimbursement that has complied with this section shall have a right of reimbursement from a claimant to whom it has provided collateral sources if such claimant has recovered all or part of such collateral sources from a tortfeasor.” (Italics added.)
An entirely different outcome resulted in Travelers v. Boyles, 679 So. 2d 1188 (Fla. 4th DCA 1996). Travelers, a health insurer, paid medical expenses on behalf of its insured and sought full reimbursement from a settlement the insured received from his uninsured motorist carrier. The insured argued that the health insurer’s claim was barred by section 768.76(4) because the uninsured motorist carrier is not a tortfeasor under section 768.76(4). The health insurer argued that it was “not seeking reimbursement under the statute, but rather under its policy.” 679 So. 2d at 1189. The Fourth District held that the statute was not applicable in that case (because the uninsured motorist carrier was not a tortfeasor as required by the statute) but that the statute “is not the exclusive method for a health insurer to seek reimbursement pursuant to a policy provision.” According to the holding in Travelers, where the statute is not implicated, a policy provision may allow for full reimbursement.
While it is clear that the distinction in the holdings centered on the “tortfeasor” language in the statute, the Ingenix court still felt it was important enough to point out that “Travelers does not stand for the proposition that a policy provision controls when section 768.76(4) is otherwise applicable.” That said, there can be instances where both the Ingenix and Travelers holdings apply in the same case. Where the BI limits in a vehicle crash case are inadequate to cover full damages, it is not uncommon for the underinsured motorist carrier (UIM) to pay some or all of its policy limits. In that circumstance, the health and disability insurance carrier’s reimbursement rights are determined under both standards.
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Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.
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