Caring for Montanans Illegal Subrogation Claim Montana Class Action

This class action concerns an argument over who has the right to the proceeds from a lawsuit over a failed hip replacement. It brings suit against Health Care Service Corporation and Caring for Montanans, Inc., formerly known as Blue Cross and Blue Shield of Montana, Inc., which the complaint refers to, collectively, as Blue Cross. Blue Cross claims to be due more than $40,000 of the lawsuit proceeds.

The plaintiff in this case, Victoria Smith, lives in Montana. She had a whole hip replacement in 2004. This hip replacement eventually failed, so that she had to undergo another whole hip replacement in May 2018. At the time of her second hip replacement, she was insured by Blue Cross, and Blue Cross.

Because the original hip replacement had failed, Smith filed a lawsuit against the manufacturer of the original prosthetic hip. The lawsuit was resolved in April 2021.

Subrogation is a process whereby a third party claims it is entitled to the proceeds of someone else’s right to collect a debt or damages. The complaint alleges that Blue Cross asserted that it had a right to some or all the proceeds of Smith’s hip replacement lawsuit via subrogation.

The complaint alleges, “On February 15, 2022, Blue Cross provided [Smith] with a chart of medical expenses for which it is claiming a subrogation lien against [Smith]. Blue Cross also threatened that the amount of its claim may increase.” The amount it demanded from Smith was more than $42,000.

Smith had gotten her insurance from the Health Insurance Marketplace, or the Exchange. Her 2018 plan with Blue Cross notes that any right of subrogation for the insurer “may not be enforced until the Member has been completely compensated for the injuries.” Montana has similar rules for insurance via its Made Whole Doctrine, which says that a health service company’s right of subrogation “may not be enforced until the insured has been fully compensated for the insured’s injuries.”

The complaint alleges, “Upon information and belief, Blue Cross never conducted the requisite made whole analysis prior to asserting a subrogation lien of more than $40,000 against” Smith.

Upon information and belief, Blue Cross never conducted the requisite
made whole analysis prior to asserting a subrogation lien of more than $40,000 against
Plaintiff. The complaint alleges that Blue Cross knows that Smith has not been fully compensated for her injuries and that it therefore is not entitled to any of her recovery from her lawsuit. According to the complaint, Blue Cross’s subrogation claim is illegal.

The class for this action is all Blue Cross insureds under policies that are subject to the Made Whole Doctrine and were issued or renewed in Montana, between March 2, 2014 and the present, where (1) a Blue Cross insured incurred medical expenses, (2) the medical expenses were payable under a Blue Cross policy, and (3) Blue Cross engaged in subrogation without first making a made whole determination.

Article Type: Lawsuit
Topic: Insurance
Tags: Health Insurance, Insurance, Subrogation