Reneke v. Mobile Health Plan

668 So. 2d 505 | Ala. | 1995

Lead Opinion

PER CURIAM.

The plaintiff, Kathleen Reneke (“Reneke”), through her legal guardian and conservator, Markie Reneke, appeals from a judgment in favor of Mobile Health Plan d/b/a Prime-Health (“PrimeHealth”) and Mobile Health Plan of Alabama d/b/a PrimeHealth of Alabama (“PrimeHealth of Alabama”) on their claim for reimbursement of medical benefits provided to Reneke. At issue on appeal is the right of PrimeHealth and PrimeHealth of Alabama, both health maintenance organizations (“HMO’s”), to reimbursement.

In 1990, Reneke was involved in a motor vehicle accident in Mobile County, Alabama. She suffered a closed head injury and has been comatose since that time. In August 1991, Markie Reneke, as Reneke’s guardian and the conservator of her estate, sued several defendants based on the accident.

PrimeHealth provided medical services to Reneke from the time of the accident until December 31, 1992. According to Prime-Health, at the time of the accident Reneke was a “covered person” under a 1990 group service agreement between PrimeHealth and Scott Paper Company (“Scott”). Prime-Health says that Reneke’s father, an employee of Scott, was a “subscribing member” of PrimeHealth. In 1991 and in 1992 Scott continued to obtain group medical coverage under group service agreements with Prime-Health, the last such agreement taking effect on January 1, 1992, and continuing in force until December 31, 1992. Effective January 1, 1993, Scott entered into a group service agreement with PrimeHealth of Alabama. PrimeHealth of Alabama began providing medical services to Reneke on January 1, 1993.

On March 4,1993, the trial court appointed Reneke a guardian ad litem in Reneke’s lawsuit against the persons and entities she claimed caused her injuries. Settlement negotiations with these defendants were conducted, and on March 12,1993, the trial court stated that “the parties to this litigation [Re-neke and the alleged tort-feasors] have reached a settlement of this case.” R. 205. That settlement agreement was subject to final approval by the trial court. The Court ultimately approved the settlement, but between the time of the settlement agreement and the court’s approval of it, PrimeHealth and PrimeHealth of Alabama moved to intervene. They state, in pertinent part, that they “sought ... intervention ... in order to pursue direct reimbursement from those persons responsible for Kathleen Reneke’s injuries pursuant to the statutory right of reimbursement conferred on HMO’s by Ala.Code 1975, § 27-21 A-30(b).” Over Reneke’s objections, the motion was granted, and on May 17, 1993, the trial court issued an order holding that PrimeHealth and PrimeHealth of Alabama properly could recover “from [Reneke’s] settlement proceeds,” the value of the benefits they had provided. On June 3, 1993, the trial court entered a judgment approving the settlement and holding, also, that of the monetary amount Reneke was entitled to under that settlement — $2,100,000.00— PrimeHealth and PrimeHealth of Alabama were to be paid a total of $263,607.46.

Reneke argues that PrimeHealth and Pri-meHealth of Alabama’s motion to intervene was untimely. Reneke’s very brief argument in this regard is conclusory at best and does not substantially comply with Ala.RApp.P. 28(a)(5). Accordingly, we do not address it.

Reneke also argues that PrimeHealth and PrimeHealth of Alabama have no right to recoup the value of benefits they provided. PrimeHealth and PrimeHealth of Alabama say that as HMO’s they have a statutory right to reimbursement. The trial court agreed, and held that this right derives from § 27-21A-30(b). That section states:

“A health maintenance organization providing medical benefits or payments to an enrollee who suffers injury, disease, or illness by virtue of the negligent act or omission of a third party is entitled to reimbursement from such third party for the reasonable value of the benefits or payments provided.”

(Emphasis added.)

PrimeHealth and PrimeHealth of Alabama say that this Code section is distinct and unequivocal. They correctly state that “[w]here a statutory pronouncement is distinct and unequivocal, there remains no room for judicial construction and the clearly expressed intent of the legislature must be given effect.” Ex parte Holladay, 466 So.2d 956, 960 (Ala.1985). However, consistent with this reasoning, the trial court’s determination that that section applies here would be incorrect. Reading § 27-21A-30(b) as lacking any ambiguity, we see that the question here — the entitlement to reimbursement from the benefit recipient — is not addressed by that Code section. That section, so read, expresses only a legislative intent to confer the right of reimbursement from, a “third party.”

We observe that PrimeHealth and Prime-Health of Alabama state that in intervening they sought to recover “direct reimbursement” “from the settling defendants.” This contention completely miseharacterizes the situation. They did not actually seek or obtain “direct reimbursement” from the alleged tort-feasors, i.e, “third parties.” They sought and obtained reimbursement from Reneke — a portion of the monies she was entitled to under the settlement agreement reached between her and “the settling defendants.” We reverse the judgment permitting reimbursement under the statute.

Finally, PrimeHealth and PrimeHealth of Alabama suggest that, in any event, they would be contractually entitled to reimbursement from Reneke. This matter was raised in the trial court but was not determined, evidently because the trial court found for PrimeHealth and PrimeHealth of Alabama as to all of the plans in issue on the statutory ground that we have discussed. Therefore, the contract claim is not before us.

REVERSED AND REMANDED.

KENNEDY, INGRAM, and COOK, JJ., concur. ALMON ^* and BUTTS,^** JJ., concur in the result. MADDOX and HOUSTON, JJ., dissent.

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Dissenting Opinion

HOUSTON, Justice

(dissenting).

The issue of cost control for medical services by health care reform did not spring full grown, like Minerva from the head of Zeus, upon the administration of the oath of office to the 42d President of the United States. Acts of Alabama 1986, Act No. 86-471, which was approved by the Governor on April 29, 1986, is an example of attempted cost control of health care. Part of this Act is what now appears at Ala.Code 1975, § 27-21A-30(b):

“A health maintenance organization providing medical benefits or payments to an enrollee who suffers injury, disease, or illness by virtue of the negligent act or omission of a third party is entitled to reimbursement from such third party for the reasonable value of the benefits or payments provided.”

We are not dealing with the common law doctrine of equitable subrogation, as this Court was in International Underwriters/Brokers, Inc. v. Liao, 548 So.2d 163 (Ala.1989). We are not dealing with a contractually modified doctrine of subrogation, as this Court was in Powell v. Blue Cross & Blue Shield of Alabama, 581 So.2d 772 (Ala.1990). We are dealing with a duly enacted statute, which gives a health maintenance organization (“HMO”) a right to reimbursement for medical benefits provided to or payments made to a person enrolled with the HMO when those benefits or payments were made necessary by the negligent act or omission of a third party. The constitutionality of this statute has not been challenged.

The majority is disingenuous in holding that Mobile Health Plan and Mobile Health Plan of Alabama, Inc., were not attempting to obtain reimbursement from a “third party.” On March 9, 1993, Mobile Health Plan, d/b/a Primehealth, and Mobile Health Plan of Alabama, Inc., d/b/a Primehealth of Alabama, sought to intervene in case number CV-91-2734 in the Circuit Court of Mobile County, Alabama, which, with the filing of the fourth amended complaint on February 5,1993, was styled:

“Maride Reneke, as Guardian on behalf of Kathleen Elizabeth Reneke, incompetent; Markie Reneke, individually; and Edward Reneke, individually,

Plaintiffs,

“vs.

“Mobile County, Alabama; Frederick Haidt and Associates Consulting Engineers, a corporation; the Estate of Frederick Haidt, Jr., deceased; James R. Payne, Inc., a corporation; James R. Payne, an individual; Joseph Ruffer, County Engineer for Mobile County; Joseph Ruffer, an individual ... [and fictitious defendants],

Defendants”

The motion to intervene was granted.

The August 13,1993, “Amendment to Final Judgment” shows that the trial court ordered that $263,607.46 be paid to Mobile Health Plan and Mobile Health Plan of Alabama, Inc., from sums paid into court by Mobile County, Alabama ($100,000), and James R. Payne, Inc., and James R. Payne ($2,000,-000), third party tort-feasors whose negligent acts or omissions were alleged to have caused injury to Kathleen Elizabeth Reneke. The court determined $263,607.46 to be the reasonable value of the benefits provided to Kathleen Elizabeth Reneke.

MADDOX, J., concurs.

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Concurrence Opinion

ALMON, Justice

(concurring in the result).

This action was filed on August 8, 1991; Reneke¹ entered into a settlement with the defendants in February 1993 and they submitted that settlement to the circuit court for approval. On March 9, 1993, Prime Health and Prime Health of Alabama (hereinafter collectively “Prime Health”) moved to intervene, requesting reimbursement pursuant to Ala.Code 1975, § 27-21A-30, and by right of subrogation. In opposition to the motion, Reneke submitted an affidavit stating that Kathleen Reneke was permanently and totally disabled, with loss or damage exceeding $4,896,326.² The circuit court awarded Prime Health $263,607.46, more than 12½ of the $2,100,000 settlement.

It appears that Reneke entered into the settlement with the understanding that the subrogation principles stated in Powell v. Blue Cross & Blue Shield of Alabama, 581 So.2d 772 (Ala.1990), and International Underwriters/Brokers, Inc. v. Liao, 548 So.2d 163 (Ala.1989), would apply,³ and that therefore Prime Health would not be entitled to receive part of the settlement proceeds because those proceeds would not make Kathleen whole for her injuries. More than a year and a half after Reneke had filed this action and only after Reneke had negotiated a settlement, Prime Health first claimed reimbursement out of any sum received from the tort-feasors and argued that Powell would not apply to its claim. Reneke negotiated and entered into the settlement without Prime Health’s having filed any such claim or having made any such argument. I would hold that, under these circumstances, Prime Health’s motion to intervene was untimely and should have been disallowed. I agree that the judgment awarding Prime Health a portion of the settlement proceeds is due to be reversed.

1 .Markie Reneke, individually and as legal guardian of Kathleen E. Reneke.

2 . This was the present value given by her expert, assuming a 20-year life expectancy for Kathleen; assuming a normal 57-year life expectancy, he gave present value figures totalling $12,474,749.

3 . Her immediate response to the motion to intervene was to cite these two cases in opposition to the motion.