| Author | Subject: HMO Is Not Entitled to Reimbursement From Member's Tort Award |
| Del | Posted At 09:08:37 03/23/2000
HMO Is Not Entitled to Reimbursement From Member's Tort Award Even though an HMO’s policy says it can be reimbursed from a member's tort recovery, this is unenforceable, says Maryland's highest court in reversing a trial court. The policy violates a state HMO liceasing statute that defines an HMO as a provider of “prepaid” health benefits. The statute also says that an HMO can collect payments only in the form of premiums, deductibles and co-payments. Since subrogation isn’t provided for in the statute, it isn’t allowed, the court said. “Pursuant to [the statute], HMOs are only permitted to receive compensation from their [members] in one of three forms: co-payments, deductibles, and a pre-determined and prepaid periodic fee. When [the HMO] asserted reimbursement and subrogation claims against [the members] and collected money from their respective settlements, it was clearly being compensated in a form not provided for in [the statute]... “We hold that...an HMO may not pursue its members for restitution, reimbursement, or subrogation after the members have received a financial settlement from a third-party tortfeasor, any contract to the contrary notwithstanding...Restitution, reimbursement, and subrogation provisions are contrary to [state law]... “Moreover, they are in conflict with the basic nature of HMOs based on subscriber per fee services. Under the basic concept of HMOs, a subscriber has no further obligation, primary or otherwise, beyond his or her fee for health services provided.” Maryland Court of Appeals. Riemer v. Columbia Medical Plan, Inc., No. 90 September Term, 1999. March 10, 2000. |
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