Subrogation and Ohio Revised Code 2323.44
Finally! There is a Court that has issued a ruling interpreting Ohio Revised Code 2323.44. Previously, we introduced you to ORC 2323.44 in November of 2015 and focused the discussion on your decision to compromise reduction of your medical pay lien. But, a lot has happened since this new law came into effect. The 2016 Summer Olympics. Brexit. The Syrian refugee crisis. It has been a while, folks.
What is the Rights of Subrogee
As a refresher, Governor John Kasich passed Ohio Revised Code 2323.44, under the Ohio Budget Bill, which took effect on September 29, 2015. This new law, titled Rights of Subrogee, mainly provides an avenue for your insured’s counsel to reduce your medical pay lien while directly interfering with your company and insured’s insurance policy language.
An interpretation of Ohio Revised Code 2323.44
In Steinborn v. Farmers Ins. of Columbus, Inc., 2019-Ohio-1745, the Fifth Appellate District reviewed the granting of a Summary Judgment in favor of Farmers Insurance of Columbus. A Farmers insured was in an accident, which was not his fault. The insured incurred medical bills in excess of $5,000 from the hospital. Before leaving the hospital, the insured signed a form assigning the hospital any and all benefits for payment of medical care and treatment. Farmers then paid the hospital directly. Farmers policy included a “Our Rights to Recover Payment” section as well as defined the word “damages.”
Farmer’s insured settled directly with the at-fault party’s insurance carrier. The at-fault carrier issued two checks: one check for the $5,000 subrogated med pay of, which it was on notice; and one check for the settlement amount less the $5,000 subrogated med pay. Meanwhile, Farmers filed Intercompany Arbitration and was awarded its $5,000 med pay. The at-fault party’s insurance carrier paid the $5,000 award and put a stop pay on the $5,000 settlement check it had sent to Farmers insured.
The insured thought they were owed more
Farmers insured filed a Declaratory Judgment action against Farmers. One of the insured’s arguments was “his recovery was diminished due to payment of attorney’s fees, therefore Farmers recovery should be diminished by the same percentage pursuant to ORC 2323.44(B).” The Court found Farmers insured understood his settlement was full and final and his settlement included his injury claim, pain and suffering, medical expenses and lost income, attorney fees and future medical expenses. At the time of settlement, the insured was aware that Farmers’ claimed it was owed $5,000 from the settlement. The Trial Court found the insured’s settlement amount was not discounted for any reason and the Court of Appeals agreed.
Farmers policy upheld
The Court of Appeals affirmed there was no ambiguity in the Farmers’ insurance policy. Farmers was permitted to pay the hospital directly and there was no evidence the settlement was for less than full value. Injured parties attorneys try any and all arguments to avoid paying back your med pay. Remember, language in the policy and notice to all parties matters. If you have any question about this law or Court ruling, please contact one of our subrogation attorneys at 216-241-4100.