I've got a motor vehicle accident case where we obtained the tortfeasor's policy limits and the underinsured motorist ins. co.'s policy limits. Both policies were minimal. Client had health insurance, and a subrogated company is wanting reimbursement. I know they can seek reimbursement as to the tortfeasor's policy, but, can the health insurance subrogate against the UM?

Answer: Yes. SeeProvident Life & Accid. Ins. Co. v. Ridenour, 1992 OK CIV APP 93, 838 P.2d 530 andReeds v. the Honorable Thomas S. Walker,2006 OK 43, 157 P.3d 100. I believeProvidentis actually subsumed by and modified byWalker.
The bottom line is that, assuming the subrogation language of the health policy is worded to permit it, the health insurance can be subrogated against a UM recovery. Even if the subrogation provision is worded broadly enough, though you may have a chance to avoid it by applying the "make whole" rule (as to which see:Equity Fire and Cas. Co. v. Youngblood, 1996 OK 123, 927 P.2d 572), if it is not an ERISA plan which negatives the make whole rule. If it is an ERISA plan, then ERISA preemption controls over the state law.

Be aware that the U.S. Office of Personnel Management, which runs the Federal Employee health insurance program under the Federal Employee Health Benefit Act is trying to pull a fast one. That agency has posted on its website a letter . http://www.opm.gov/carrier/carrier_letters/2012/2012-18.pdf to the effect that federal law preempts state law with regard to subrogation of health benefits paid to or for a federal employee. The letter cites Empire Healthchoice Assur., Inc. v. McVeigh, 547 U.S. 677, 126 S.Ct. 2121, 165 L.Ed.2d 131 (2006) as saying "it is plausible to construe subrogation and reimbursement contract terms as a condition or limitation on benefits received by a Federal employee, allowing these FEHB Program contract requirements to preempt state law . . . ."

The letter then cites several District and Court of Appeal opinions to support it. However, The 2006 Supreme Court case to which the letter refers holds exactly the opposite. After suggesting it might be plausible to put the interpretation that state subrogation law is preempted, the Court holds that subrogation of FEHBA is not preempted: " 126 S.Ct. 2121, 2136.

This often come up when the issue is whether the Oklahoma "make whole" rule applies. The particular case which called this to my attention was one in which there was a small liability policy ($25,000) and some $17,000 in unpaid medical bills when the FEHBA plan sought to recover all of the liability money for its subrogation claim, leaving the federal employee owing the remaining bills. It's almost as if the agency is saying "We don't care what the Supreme Court rules, we're going to use our own interpretation. Don't let them do that to your client.

Client is EMT in back of ambulance when hit by tortfeasor. After settling with the tortfeasor he finds out EMSA has UM that covers employees. UM now denies coverage saying that its subrogation was destroyed by the settlement and release. Client did not know of the employer’s coverage at time of settlement and release with tortfeasor. EMSA notified its carrier of the accident and of injury to an employee but the insurance did not notify the employee of the policy benefit. They have filed an MSJ and response due shortly.

Answer: Check out Phillips v. New Hampshire Ins. Co., 263 F.3d 1215 (10th Cir. 2001). Facts are very much like yours: employee didn't know about employer's UM coverage. Tenth Circuit held the employee didn't give up the employer's UM by releasing tortfeasor because he didn't know there was UM.

Do health care liens attach to medpay benefits? What aboutsubrogation claims by an ERISA plan?

Answer: Hospital liens don't attach to medpay but others do. See:42 O.S. §46 Physician's Lien: contains subsection B that, in addition to lien provided in subA, physician shall have lien "against an insurer." 42 O.S. §43. Hospital Liens, has no such provision and, therefore, arguably does not attach a lien to UM or med-pay.
Ambulance lien 42 O.S. § 49 is worded like § 46. 63 O.S. §5051.1 A2 Payment by OHCFA for one with a claim "against an insurer," creates a debt to DHS.Kratz v. Kratz, 1995 OK 63, 905 P.2d 753: Hospital lien does not attach to UM coverage.Broadway Clinic v. Liberty Mut. Ins. Co., 2006 OK 29, 139 P.3d 873: Physician's lien attaches to UM.

As for the ERISA subrogation,Generally they have a claim against the medpay recovery. However, it depends on the language of the ERISA plan. The two contrasting cases on that areProvident Life & Accid. Ins. Co. v. Ridenour, 1992 OK CIV APP 93, 838 P.2d 530 (Health insurance company not entitled to subrogation against UM). Distinguished byReeds v. Honorable Thomas S. Walker/NAICO v. Reeds,2006 OK 43, 157 P.3d 100.

Personally, I am unable to distinguish the policy language in Ridenour from that in Walker but inRidenour, the Court of Civil Appeals held there was no subrogation where the ERISA plan provided subrogation for claims against "third parties." That did not reach subrogation against UM coverage but reached only claims against the tortfeasor. The Supreme Court inWalkerfound a very similar provision providing subrogation against a "third party" applied to the insured's own UM coverage since the UM carrier was a "third party" to the transaction between the ERISA insurance company and the injured insured. It appears to me the Supreme Court just didn't want to reverse Ridenour. I would expect the same rules would apply to medpay coverage.

There is an important new case out of the 3rd Circuit addressing whether ERISA health insurance plan must pay its share of recovery costs associated with its subrogation claim: US Airways, Inc. v. McCutchen, __F.3d __, 2011 WL 5557411: Where ERISA claim for bills paid was $66,866 and recovery (due to limited coverage) was $110,000 and injured plan member owed 40% attorney fee, District Court erred in requiring injured plan member to pay back all of the recovery. "Appropriate equitable relief" which plan could seek meant something more than equitable relief and required the court to exercise its discretion to avoid unjust enrichment to the plan. Court says this is required by Sereboff v. Mid Atlantic Medical Servs., Inc., 547 U.S. 356, 361, 126 S.Ct. 1869, 164 L.Ed.2d 612 (2006), which had the effect of modifying the holdings in prior, contrary 3rd circuit rulings. Notes its decision is contrary to other circuits in Zurich Am. Ins. Co. v. O'Hara, 604 F.3d 1232 (11th Cir.2010); Admin. Comm. of Wal-Mart Stores, Inc. Assoc. Health & Welfare Plan v. Shank, 500 F.3d 834 (8th Cir.2007); Bombardier Aerospace Employee Welfare Benefits Plan v. Ferrer, Poirot & Wansbrough, 354 F.3d 348 (5th Cir.2003); Admin. Comm. of the Wal-Mart Stores, Inc. Assocs.' Health & Welfare Plan v. Varco, 338 F.3d 680 (7th Cir.2003).

This seems to set up a conflict among the circuits for the U.S. Supreme Court to take up the question whether the ERISA plan can refuse to pay its proportionate share of recovery costs and leave the plan participant uncompensated.

Plaintiff injured in auto wreck has health insurance pay bills. She is later discharged in bankruptcy, listing the health insurance as a creditor. Does this extinguish their subrogation claim?

Answer: Read In re Burnett, 447 B.R. 634 (Bkrtcy W.D. OK 2011). That case holds the subrogation claim was not valid against a settlement but only because the bills for which the health insurance company sought subrogation were incurred and paid "post-petition" (ie, after the bankruptcy was filed). It sure talks as if the subrogation would have been upheld if the subrogation claim preceded the bankruptcy, which I think is your situation.

If both medpay and UM are available under the policy, you can claim them both.

Answer: Yes. See: Aetna v. State Board of Prop. & Cas. Rates, 1981 OK 153, 637 P.2d 1251: Med pay offset against UM invalid. No subrogation for medical bills paid under UM

Do you have a Blue Cross Blue Shield policy so I can see the subrogation language?

Answer: Be careful about relying on the BC/BS subrogation language from some other policy. BC/BS has a bewildering array of plans and the subrogation provisions are not always the same. Get your client’s employee benefit booklet and examine that language.

Isn't it true a health insurance subrogation claim is null and void against a GTCA case?

Answer: That's a good question. 51 O.S. Sec. 155(27) says: “The state or a political subdivision shall not be liable if a loss or claim results from... 27. Any claim or action based on the theory of indemnification or subrogation...” Does this mean the injured plaintiff can collect for the medical bills paid under a subrogated health policy or does it mean the injured employee can’t recover for those medical bills, since the statute exempts the governmental entity from the liability. The governmental entities’ lawyers will argue the latter, arguing that the statute is obviously not intended to provide a windfall for injured plaintiffs. The injured plaintiffs’ lawyers will argue that the statute doesn’t, on its face, purport to deal with whether the injured plaintiff can recover but only says the subrogated entity cannot recover subrogation. Get ready to go to the Supreme Court.