Albany New York Defense Law Firm: O'Connor, O'Connor, Bresee & First, P.C.

On November 12, 2009, Governor David Paterson signed into law Senate Bill # 66002, which makes important changes to New York’s General Obligations Law (GOL), affecting actions for personal injury, medical, dental, or podiatric malpractice or wrongful death.  The legislation adds Section 5-335 to the GOL, eliminating any right of subrogation by health insurance providers except for those payments as to which there is a statutory right of reimbursement. 

The purpose of this legislation is to protect parties to the settlement of a tort claim from certain unwarranted lien, reimbursement and subrogation claims. The amendment will addresses that fact that formerly, there was no statutory authority that addressed or limited the extent to which a benefit provider may claim contractual reimbursement or subrogation with respect to medical expenses it has paid pursuant to an insurance contract or other agreement. For example, in a medical malpractice action, a health insurer which has provided coverage to the plaintiff could demand reimbursement for its expenses, thwarting settlement talks and making cases more expensive to litigate. This legislation establishes a statutory framework that will facilitate settlement of cases and reduce expenses for litigants.  The amendment, states in pertinent part:

 

Except where there is a statutory right of reimbursement, no party entering into such a settlement shall be subject to a subrogation claim or claim for reimbursement by a benefit provider and a benefit provider shall have no lien or right of subrogation or reimbursement against any such settling party, with respect to those losses or expenses that have been or are obligated to be paid or reimbursed by said benefit provider.  See Senate Bill # 66002, Part F, Section 8.