January 6, 2011

Anti-subrogation legislation was passed in the State of New York on November 12, 2009, which purported to eliminate the right of fully insured carriers and self-funded benefit plans, coming within the purview of state law, to pursue subrogation and reimbursement. We here at The Phia Group have never accepted anti-subrogation legislation without a fight. When we received word of the statutory shift, our attorneys immediately devised ways to enforce plan rights.

The law is a collateral source rule, and bars plaintiffs from collecting funds for losses covered by a benefit plan. Our attorneys theorized that because the benefit plan is also a victim, and because the plaintiff cannot release the responsible third party from liability for damages it caused to the benefit plan, the benefit plan is entitled to file its own claim against the third party.

In Rink v. State, 2010 N.Y. Slip Op. 20149, 2010 WL 1686054, similarly minded attorneys made such an argument before the Fourth Department (covering portions of northwestern New York). That Court agreed with the theory that a benefit plan may pursue a claim directly against a third party, however, due to limited jurisdiction and constraining language utilized in the opinion, many attorneys still refused to recognize a benefit plan’s right to reimbursement.

In the case of Rizzo v. Moseley, et. al., Index No. 11214/07, a benefit plan that we represent processed and paid hundreds of thousands of dollars in incident related claims. We retained our CEO, Adam V. Russo’s, law firm (The Law Offices of Russo and Minchoff), as well as counsel in New York (Attorneys Daniel A. Lynn and Philip H. Ziegler of Braff, Harris and Sukoneck), and filed a motion to further recognize a benefit plan’s right to pursue reimbursement against responsible third parties. This case, unlike the Rink case, would be decided by a Court in the Ninth Judicial District of New York, less than 30 miles from Manhattan.

We are pleased to announce that we have emerged victorious! On December 21, 2010, the Supreme Court of New York, County of Westchester, agreed with us when it held that a benefit plan is able to intervene in a plan participant’s lawsuit without violating New York’s collateral source rule.

It is now clear that, while New York law limits reimbursement, it does not prevent the pursuit of a claim directly against a responsible third party. This is one more example of how innovative thinking and passionate advocacy can lead to enhancement of a benefit plan’s rights, and how partnering with The Phia Group can help you ensure cost savings remain a top priority.

For more information about this case, please contact Adam V. Russo at 781-535-5622 or via e-mail at arusso@phiagroup.com. Furthermore, if – due to the change in New York law – you have closed any cases or have chosen not to pursue reimbursement opportunities, we urge you to contact us as well. To learn more about The Phia Group’s services, we encourage you to contact our Director of Client Services, Andrew Milesky at 781-535-5636, or via e-mail at amilesky@phiagroup.com. You may also visit The Phia Group’s website at www.phiagroup.com, or Adam Russo’s personal blog at www.passionforsubro.com.

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This entry was posted by cmonfils on Thursday, January 6th, 2011 at 1:53 pm and is filed under New York, Subrogation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.