SCOTUS Denies Appeal from Wal-Mart Health Plan Recovery
CNN has picked up on the story of Debbie Shank, whose fight with Wal-Mart over reimbursement of her medical expenses was on the front page of The Wall Street Journal last November. At that time, I wrote about her unsuccessful efforts to reach a compromise with Wal-Mart regarding its health plan’s right to be repaid for medical expenses incurred in connection with Ms. Shank’s motor vehicle accident, which left her severely brain-damaged. In August, she lost her appeal before the Eighth Circuit Court of Appeals, and last week, the Supreme Court of the United States denied her petition for a writ of certiorari. James A. Shank, et al. v. Administrative Committee of the Wal-Mart Stores Inc. Associates' Health and Welfare Plan, No 07-791.
CNN focuses on the human interest aspect of her story and doesn’t try to grapple with the policy issues, but the statement from Wal-Mart’s spokesman seems inaccurate:
Wal-Mart’s plan is bound by very specific rules … We wish it could be more flexible in Mrs. Shank’s case since her circumstances are clearly extraordinary, but this is done out of fairness to all associates who contribute to, and benefit from, the plan.
Undeniably, Wal-Mart has the right to pursue its subrogation interest against Ms. Shank’s recovery, but nothing forces Wal-Mart to seek reimbursement of the entire amount, or an amount equal to the remaining settlement. The implication that Wal-Mart was required to pursue the recovery of its entire claim is incorrect. In fact, health plans routinely negotiate in these circumstances like these in order to receive some recovery, without leaving the plan participant or beneficiary in circumstances as dire as Ms. Shank's, and Wal-Mart clearly could have done that here.
