A California resident has filed suit against insurance provider Kaiser Permanente, alleging that the corporation failed to refund her copayment after collecting under a personal injury award. Although the plaintiff's individual damages are negligible, the issue could affect hundreds or even thousands of Kaiser customers.
Nicole Glaus of Concord, CA incurred $517.20 in medical expenses after being rear-ended in a traffic accident. Glaus was subsequently awarded $4,250 in damages in a suit filed against the individual who rear-ended her. Kaiser's policy provides that, when a customer collects damages in a lawsuit, the insurance company can seek reimbursement of costs. Kaiser did this, but failed to credit Glaus for the $20 copayment that she initially forked over.
The suit is brought on behalf of all Kaiser members whose plans are part of a private employer group medical plan — as Glaus's was — and who reimbursed Kaiser after a successful lawsuit but never received their co-payment back afterwards.
Kaiser's own "Evidence of Coverage," or EOC, requires that Kaiser refund a consumer's copayment when collecting expenses after a lawsuit settlement. The suit says that Glaus and all other class members have an "equitable lien" against Kaiser, since the company wrongfully withheld money from them.
Glaus is being represented by the law firm of Lewis Feinberg Lee Renaker Jackson PC, based in Oakland, CA. Attorney Daniel Feinberg conceded that $20 is a small amount of money, but said enough customers have been affected that the aggregate amount of money at issue is likely substantial. "If you steal a million dollars from one person, you're gonna have a lawsuit," Feinberg told the San Francisco Weekly. "But if you steal it by small cuts, you can get away with it until someone files a class action to stop you."
The suit seeks reimbursement of unrefunded copayments and an injunction prohibiting Kaiser from continuing the practice in the future.
The action was brought under the Employee Retirement Income Reimbursement Act (ERISA), which protects individuals who might suffer discrimination from health insurance companies. The ERISA provisions at issue require Kaiser to act as a customer's fiduciary, and to administer the plan in the best interests of the consumer. The suit alleges that Kaiser breached that duty, stating that the "defendant has enriched itself at the expense of Ms. Glaus in violation of the fiduciary duty of loyalty."
This isn't the first time that co-payments have been at the center of a class-action lawsuit. In April, a settlement was reached in Massachusetts case where the manufacturer and a publisher of drug data colluded to inflate co-payments on name-brand drugs. Additionally, according to its website, the St. Louis law firm of Carey & Danis is investigation claims that several HMO's have charged excessive copayments over the last five to ten years.