High court to hear ar­gu­ments on in­surer re­im­burse­ments

Modern Healthcare - - THE WEEK AHEAD - —Lisa Schencker

The U.S. Supreme Court on Mon­day is sched­uled to hear oral ar­gu­ments in a case that pits in­sur­ers against ben­e­fi­cia­ries when it comes to who’s en­ti­tled to money won in court af­ter an in­jury.

The case, Mon­tanile v. Board of Trustees of the Na­tional El­e­va­tor Industry Health Ben­e­fit Plan, cen­ters on this ques­tion: If a plan’s ben­e­fi­ciary wins money in court for an in­jury but then spends it, should the ben­e­fi­ciary still have to re­im­burse his or her in­sur­ance plan for the med­i­cal ex­penses it paid?

The plan says it’s en­ti­tled to the money as part of the deal struck with the ben­e­fi­ciary when he agreed to cov­er­age. It ar­gues that plans make more than $1 bil­lion a year from such re­im­burse­ments, and al­low­ing ben­e­fi­cia­ries to skip out on those pay­ments could af­fect the af­ford­abil­ity of plans.

“The rule Mon­tanile ad­vo­cates—bar­ring re­im­burse­ment where a ben­e­fi­ciary has spent down the promised fund— will re­duce re­im­burse­ment re­cov­er­ies and in­crease plan costs,” the plan’s lawyers ar­gue in court doc­u­ments.

Mean­while, lawyers for Robert Mon­tanile ar­gue that in­sur­ers are not al­lowed un­der the fed­eral Em­ployee Retirement In­come Se­cu­rity Act, known as ERISA, to de­mand re­im­burse­ment when the money has al­ready been spent. Mon­tanile, who was in­jured when a drunken driver struck his ve­hi­cle, spent the $500,000 he won in court on on­go­ing med­i­cal ex­penses, lawyers’ fees and liv­ing ex­penses for him and his daugh­ter.

Radha Pathak, an at­tor­ney for Mon­tanile who is of coun­sel with Stris and Ma­her, called the plan’s con­cern that a de­ci­sion against it could lead to largescale prob­lems for in­sur­ers “overblown.” Lower courts that con­sid­ered the case ruled in fa­vor of the in­sur­ance plan.

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