2003AP3274 Torres v. Dean Health Plan, Inc.

Listen to this article

Accordingly, where plaintiff paid the HMO its subrogation share and then sued to recover that amount, we affirm the dismissal of plaintiff’s suit.

“Torres does not deny that, if HMOs are prohibited from exercising subrogation rights, HMO enrollees like her would get the sort of double recovery discussed in Cunningham and Koffman. Instead, Torres — apparently believing that the best defense is a good offense — asserts that it is HMOs that will get double recovery if subrogation is permitted. She contends that Dean HMO has collected twice for the same service: once in the form of premiums, and a second time in the form of tort recovery. But Torres is describing nothing more than the usual subrogation arrangement. Moreover, in Cunningham, the court explained that insurers do not necessarily retain the funds obtained through subrogation. Rather, competition may force these funds to be recycled in the form of lower rate.

“An additional purpose which underlies the doctrine of subrogation is that it prevents the policy holder from receiving more than he or she bargained for from the contract of insurance. Commentators in the field have suggested that if the insurer has only contracted to indemnify the insured for losses incurred, denying the insurer subrogation rights in effect rewrites the policy and allows the insured to retain benefits not contracted for. Other proponents of the subrogation doctrine assert that it returns the excess, duplicative proceeds to the insurer who can then recycle them in the form of lower insurance premiums. …

“We agree with the circuit court that Wis. Stat. §§ 609.01 and 609.91 do not limit HMOs to receiving funds only from enrollees. Further, we conclude that, when an HMO exercises contractual subrogation rights, the HMO is not obtaining funds from an enrollee in violation of the enrollee’s liability protections contained in § 609.91. It follows that the statutes do not prohibit HMOs from receiving funds by the exercise of contractual subrogation rights. Finally, we conclude that, even if Torres paid Dean HMO to satisfy Dean’s right to subrogation, Torres was not held ‘liable’ within the meaning of § 609.91, but instead merely passed along medical expenses money from the tortfeasor to Dean HMO.

“All of Torres’s claims in her complaint are based on the proposition that HMOs in general, and Dean HMO in particular, cannot exercise their rights to subrogation for the reasons Torres has argued. We have rejected Torres’s arguments and have concluded that Dean HMO may exercise its contractual subrogation right here. Therefore, we affirm the circuit court’s order dismissing Torres’s complaint for failure to state a claim.”

Affirmed.

Recommended for publication in the official reports.

Dist IV, Dane County, DeChambeau, J., Lundsten, J.

Attorneys:

For Appellant: Victor C. Harding, Milwaukee; Jordan M. Lewis, Philadelphia, PA

For Respondent: Richard L. Schmidt, Madison