The term “subrogation” refers to the legal right that allows insurance companies to recover funds paid on behalf of an injured person. This might seem like an abstract legal concept, but it’s a tangible problem for accident victims insured under ERISA (Employee Retirement Income Security Act).
Four years ago, two men attacked and beat Bryan Stow, a San Francisco giants fan, in the parking lot of Dodger Stadium in Los Angeles, inflicting life-changing injuries. The story garnered national attention, but Stow’s story didn’t end there. Now, he’s facing another battle – one with the insurance provider that allegedly covered his medical expenses after the attack.
Stow was awarded $18 million by a jury, but he hasn’t actually received any of the money. Additionally, a liability insurer for the Dodgers is in line to acquire $1.6 million from the case. How? The short answer is subrogation.
Federal law lets insurers take a piece of Stow’s settlement.
Subrogation is an area of federal law that, in recent cases, allows insurance companies to take money from accident victims – even before they are paid. In Stow’s case, the law allows his insurer fight for a return on the money it paid to cover his medical costs.
Stow’s ex-wife said, “This is what people pay premiums for…to worry about some insurance company taking what is his is absurd.”
Now subrogation has given way to a multi-billion dollar industry, where medical insurers pursue patients who received large settlements in court. Over a three-year period, a unit of Xerox received more than $1 billion for health care clients under these laws.
Now, Stow stands to owe money for the injuries that should have been covered by his multi-million dollar settlement.
An attorney who has dealt with similar cases in the past said, “It is extremely frustrating for people who are sick, or dying, or who have loved ones who have died and are desperately in need of money.”
Dr. Michael M. Wilson is an attorney and a physician who earned his undergraduate degree from the Massachusetts Institute of Technology and his legal and medical degrees from Georgetown University. He has focused in the area of medical malpractice for more than three decades and secured more than $100 million in settlements and verdicts on behalf of clients throughout the country. He is admitted to practice in the District of Columbia and New York as well as the U.S. Court of Appeals for the District of Columbia and the U.S. Supreme Court. He is listed in America’s Top 100 High Stakes Litigators.