ANNAPOLIS – If its leaders have their way, the General Assembly could overturn a recent Maryland Court of Appeals ruling barring health maintenance organizations from recovering money from patients who have received personal injury settlements.
A joint House-Senate panel heard testimony Thursday on a bill to restore HMO rights to tap their patients’ court settlements to recover care costs from sponsors Senate President Thomas V. Mike Miller Jr., D-Prince George’s, and House Speaker Casper R. Taylor Jr., D-Allegany. With the two leaders supporting the bill as a necessary means to control rising health care costs, the measure could pass quickly through the Legislature. It was introduced just three weeks before the scheduled end of the session.
Opponents called the legislation a knee-jerk reaction by health insurers to a Court of Appeals ruling that HMOs are not entitled to additional funds after collecting premiums from subscribers to pay for services.
HMOs, as well as traditional pay-for-service insurers, have been parties to personal injury lawsuits for 25 years and the practice should be allowed to continue, said Bob Enten, spokesman for the Maryland Association of Health Plans.
“This bill doesn’t open a new door,” Enten said. “It brings us back to where we thought we were.”
“The court went way beyond what anyone thought to be the law,” Enten said.
Sen. George W. Della Jr., D-Baltimore, chastised Enten for trying to use legislation to override the appeals court, which meets just a few blocks from the State House.
“You lost the thing down the street, so you run down here to get it changed,” Della said.
The court ruling could cost HMOs an estimated $15 million to $20 million each year, Enten said. HMOs would be unable to recover money paid for medical treatment and would be open to class action lawsuits from previous cases where the insurers have taken out money, he explained.
That loss would ultimately be passed to the consumer with an estimated 2 percent increase in HMO premiums, according to Mid-Atlantic Medical Services Inc., a large Maryland HMO.
“There is no question that (the court’s) decision, if allowed to stand, is going to increase health care costs,” Miller said.
The appeals court’s March 10 decision concerned money received by Columbia Medical Plan from three members who settled with negligent third parties. The court ruled an HMO is only entitled to funds received from members through predetermined fees, co-payments and deductibles.
“Under the basic concept of HMOs, a subscriber has no further obligation, primary or otherwise, beyond his or her fee for health services provided,” the court said. The monies paid by the three members “can be seen as nothing else than additional compensation for the health benefits . . . previously provided.”
An HMO cannot be a party to the settlement because the agreement is with the patient and the patient owes no debt to the insurer, the court ruled.
At the hearing, a representative from the Maryland Trial Lawyers Association argued that not only do HMO members not owe their insurer, but they actually lose benefits by joining the service in exchange for fixing their costs. HMO members end up with a limited choice of doctors, said Dan Clements, with the trial lawyers. Patients should be allowed to keep the settlement money, he said, because they’ve given up other rights, including that of choosing their own doctor.