Tennessee litigators may be familiar with the "made whole doctrine," which provides that a private health insurance company or medical payments insurance company may not be reimbursed from the proceeds of a personal injury settlement until and unless the injured party is fully compensated. Thus, if a plaintiff has $100,000 in medical bills, but the maximum recovery is only, say, $50,000, then that plaintiff is not fully compensated, or made whole, and the health/med pay carrier has no legal subrogation interest or right of reimbursement.

One "creative" argument insurance companies came up with to try and get reimbursement was to claim that the health insurance plan was covered under the federal ERISA law, and that therefore, ERISA preempts, or trumps state law protections and provides a federal right of recovery. The U.S. Supreme Court scotched that idea, though, in 2002, with the Knudson opinion, authored by my new best friend, Justice Scalia. Read the opinion if you will, but in essence, Scalia for the Court says that there is no such reimbursement right contained within the ERISA law. I have had a few cases where citation of this case was important to defeating a health carrier's assertion of a reimbursement right. Thank goodness for fairness, equity, and Antonin Scalia.

But wait a minute! Our wonderful Congress, who has shown itself as a body more interested in protecting business and Big Insurance, is at it again. H.R. 2830, the Pension Protection Act of 2005, is going to conference committee. The House version of the bill contains ERISA amendments that would allow insurance companies to have first dibs at personal injury recoveries. If enacted per the conference report, we will find many instances where the insurance companies get reimbursed and the injured victim as a result gets little or nothing from their his or her lawsuit. Here's a fact sheet detailing reasons for opposing this change in the law, which, as usual hurts the little guy while causing a windfall for Big Insurance.