Wal-Mart drops employee health-care reimbursement claim
Posted on Wednesday, April 2, 2008
URL: http://www.nwanews.com/adg/News/221552/
Wal-Mart Stores Inc. said Tuesday it will drop its efforts to collect $ 470, 000 in health-care reimbursement from a former employee who suffered brain damage in a traffic accident.
The case of Deborah Shank, of Jackson, Mo., drew national attention, making the world’s largest retailer the subject of harsh criticism on Web logs, especially after Wal-Mart and its chief executive officer, H. Lee Scott, were featured on consecutive days as the “world’s worst person” on a national cable news network.
Wal-Mart successfully sued Shank based on a clause in its health-care policy, common in many group insurance policies, allowing recovery of expenses if an injured employee is awarded damages in court. The decision was upheld on appeal and the U. S. Supreme Court chose not to review the case.
In a statement, Wal-Mart spokesman David Tovar said that “occasionally others help us step back and look at a situation in a different way. This is one of those times.
“ We have all been moved by Ms. Shank’s extraordinary situation. Our current plan doesn’t give us much flexibility, so we began reviewing the guidelines for the trust that pays medical costs for our associates and their family members,” he said.
Shank, 52, lost much of her memory and ability to communicate or walk in a crash between her minivan and a tractor-trailer in May 2000. She now lives in a nursing home.
Her family sued the trucking company and won $ 700, 000. Court records show that after attorney’s fees and costs, the remaining $ 417, 477 from the settlement went into a trust for her care.
Her former husband, Jim Shank, said in a statement that he was grateful Wal-Mart changed its mind.
“I just wish it hadn’t taken them so long; this never should have happened. I sincerely hope no other family ever has to go through this,” he said.
As the case dragged on, Jim Shank divorced his wife so she would be eligible for Medicaid coverage.
During the case, the Shanks also lost one of their three sons when Jeremy, 18, was killed in Iraq last year while serving in the Army.
The case put a spotlight on the growing use of reimbursement claims by health plans, experts say.
Roger Baron, a law professor at the University of South Dakota and a specialist in healthplan law, said health plans have become “very aggressive” about seeking recovery under “subrogation” clauses since a 2006 Supreme Court decision made it easier to do so.
“It’s free money. They want the free money,” Baron said.
Lynn Dudley, vice president for policy at the American Benefits Council in Washington, said the negative publicity around the case was beginning to draw the attention of lawmakers who might want legislation to stop or limit subrogation.
“Capitol Hill is paying attention,” Dudley said.
Baron said Wal-Mart’s size — it is the nation’s largest nongovernment employer, with more than 1. 3 million workers — means its willingness to compromise in an individual case may have a wider impact on reimbursement practices by other health plans.
“I’m so pleased to see an element of reason, because so much of this subrogation has been about just blindly going after the money,” Baron said.
Tovar said Wal-Mart wanted to understand the impact of potential changes in its policy before acting.
“We have decided to modify our plan to allow us more discretion for individual cases, and are in the final stages of working out the details,” he said. “Wal-Mart will not seek any reimbursement for the money already spent on Ms. Shank’s care, and we will work with the family to ensure the remaining amounts in the trust can be used for her ongoing care. We are sorry for any additional stress this has put on the Shank family.” Information for this article was contributed by Marcus Kabel of The Associated Press and Steve Painter of the Arkansas Democrat-Gazette.