SUBROGATION & MESH– What it means and why you must understand it

By Aaron Leigh Horton

Mesh News Desk, October 4, 2016 ~ This story first appeared in October 2016 but deserves to be revived as many are currently in the process of receiving settlement in their mesh injury case. Thank you Aaron!

According Dr. Shlomo Raz at UCLA, the leading expert for 100% removal of transvaginal mesh from the body, “I think that more than 1 million patients [have polypropylene mesh implanted]! The companies have reported insertion of 250,000 implants per year!  This number is an estimate of the worldwide use of mesh.”

Obviously, that is an enormous number, and when broken down to a daily figure, it represents at least 685 patients worldwide, per day that are still receiving this highly-injurious medical device.  As a result, many victims (more than 50,000 in the U.S. and growing) have filed suit against the six manufacturers of this mesh, most often used in women for pelvic organ prolapse (POP), stress urinary incontinence (SUI) and more and more for hernia repair, performed on both men and women.

So as some of the earlier cases near settlement talks and bellwether trials are underway, claimants will be wise to understand the components that make up a jury-awarded damage or a settlement figure, negotiated without a jury between the plaintiff and defendants lawyers and clients.

Subrogation is an important term that plaintiffs will want to discuss with their legal representation.  Subrogation is a legal term that refers specifically to a third party’s right to recover damages out of a victim’s possible award and/or settlement.

According to Mr. Doug A. Daniels, attorney/partner and a specialist in mesh cases:

“Subrogation refers to the principle that someone who pays another person for damage caused by a third person, has a right to recover those payments from that third person who caused the damage; if the victim recovers an amount from the third person, the party who paid for the damage has a right to be paid back out of that recovery.  Subrogation would apply in the mesh cases as in any other case:  Third-party payers (Medicare, Medicaid, or private insurers) have and will assert a right to be reimbursed out of the victims' recovery against the defendants. That right to reimbursement is limited to amounts they paid on behalf of the victims for treatments related to injuries caused by the mesh.  That is, they are not entitled to by repaid amounts out of mesh lawsuit settlements that they paid for treatments unrelated to the mesh injuries.”

In plain English, subrogation means that a health insurer has the legal right to a portion of a mesh-injured patient’s financial settlement.  Understanding the realities of the cash disbursement you may receive is very important.  Several entities have legal right to claim a portion of financial damages a plaintiff is awarded, including:

• Your lawyer, depending on the language in your contract, even if you do not go to trial but instead settle, with no trial required.
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• A portion of your cash award will also be subject to subrogation as described above, and insurance companies have the right to place liens on your personal property until they have received their negotiated portion of the award.  Often, your attorney will handle this process with companies who specialize in the negotiation of subrogation.

• Tort reform law is different per state.  As a plaintiff, it’s important to know how tort reform law has affected your state’s practice.  For example, in Texas, there is an automatic cap on compensatory damages of $250,000 and punitive damages cannot exceed 3x the economic value lost, due to the injury/illness.  As another example, in Georgia, compensatory damages are also capped at $250,000, but punitive damages are immediately subject to a 75% fee, assessed by the State of Georgia.

According the Mr. Daniels, it’s also imperative for plaintiffs to know that, “Medicare and Medicaid don't even have to demand to be paid back; the law mandates it.”  He’s also not aware of any private insurer that does not pursue their legal right to subrogation.

How does our payment of health care premiums factor in to the equation of what will be recouped by third parties through subrogation?  According to Mr. Daniels, “Premiums are not part of the subrogation analysis since [the injured patient] also buys coverage for other medical treatment unrelated to whatever injury gives rise to the settlement.”

Daniels concedes there is a bit of a flaw in that logic since the recoup of financial damages represents the victim's recovery for more than just medical expenses.  Recovered damages also include lost earnings, pain and suffering, loss of enjoyment of life, etc.  Who's to say what part of a given settlement represents medical expenses only as compared to other more subjective damages, like loss of future earnings/productivity, loss of consortium, loss of intimacy and the many other harms we know are not primarily medical in nature, but are a by-product of the physical injuries for which the mesh is responsible?  It’s in this area that lien resolution companies step in to work with a plaintiff’s lawyer to negotiate a reasonable recovery to the third-party payer (your insurer) while still reserving a reasonable net recovery for you, the victim.

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Sources:

Mr. Doug A. Daniels/Daniels & Gentle Trial Lawyers of Houston

Aaron Leigh Horton is a regular contributor to Mesh News Desk.   This article is not intended to be a substitute for legal advice from your own law firm. Please confer with them about this important topic.