May 2017 Subrogation Newsletter
Words matter. There is an important difference between the insured/plaintiff and the tortfeasor/ defendant in a subrogation lawsuit. This difference reflects both who was at fault in causing the accident and who is making a “claim.” The industry’s seemingly unbreakable habit of referring to the tortfeasor or defendant as the “claimant” isn’t fatal to the handling of a claim, but it isn’t accurate and it also opens up a claim file to possible misinterpretation and mistakes
A long-standing controversy has been resolved and a major anti-subrogation obstacle in Pennsylvania has been overcome. The ongoing debate in Pennsylvania over whether a workers’ compensation carrier can initiate the filing of a third-party lawsuit is finally over. The answer is “yes” and we finally know how. On February 10, 2017, in The Hartford Insurance Group on Behalf of Chen v. Kamara, 2017 WL 542020 (Pa. 2017), a Superior Appellate Court finally confirmed that a subrogated workers’ compensation carrier is authorized to initiate the filing of a third-party action on its own initiative, provided it does so correctly.
In a highly anticipated decision, the U.S. Supreme Court has finally weighed in on the issue of FEHBA subrogation and federal preemption of state laws in Coventry Health Care of Missouri, Inc. v. Nevils, 137 S.Ct. 1190 (April 18, 2017) (Coventry II). The verdict is that state law must yield to FEHBA contracts’ subrogation provisions. This comes nearly a year after the Missouri Supreme Court’s latest (but probably not last) rejection of FEHBA subrogation rights, even in the face of express federal regulations to the contrary. Nevils v. Group Health Plan, Inc., 492 S.W.3d 918 (Mo. 2016) (Nevils II).