Maryland HMO Must Pay for
Illegally Double-Billing Its Members
Proof of Damages Complicated by Columbia Medical Plan’s Widespread Destruction of Evidence
In an important victory for consumers’
rights, the Circuit Court of Howard County, Maryland recently ruled in Riemer
v. Columbia Medical Plan that a Maryland HMO must repay its
members for illegally double-billing them. The HMO members’ task of
proving their damages, however, will be complicated because Columbia
Medical Plan (CMP) recently admitted that it has destroyed much of the
evidence of its wrongdoing.
Lawyers for Public Justice (TLPJ) and a team of consumer lawyers filed
the class action lawsuit in 1996, challenging the Maryland HMO’s
practice of double-billing its members whenever they recover damages from
a third party (also known as "subrogation"). Judge James B.
Dudley’s two-page order dated May 28, 2003 denied all of CMP’s
defenses in the case, ensuring that the HMO will be held liable for its
illegal double charges to hundreds, if not thousands, of consumers.
"Columbia Medical Plan has done all it
could to delay and derail this case for seven years, but it has now
reached the end of the line," said Martin Wolf of Baltimore’s
Quinn, Gordon & Wolf. "By denying all of the HMO’s defenses,
the Court has effectively ordered the HMO to repay all the money that it
illegally picked from its members’ pockets."
The Court must now determine the amount
that the HMO owes its members. That determination will not be easy, given
the newly exposed fact that CMP destroyed most of the evidence of its
double-billing. Mr. Jeffrey S. Joy, the man designated by CMP as the
person most knowledgeable about its subrogation practices, testified in an
April 2, 2003 deposition that CMP has destroyed computer records and all
hard copies of the databases containing most of its subrogation records.
CMP destroyed these documents years after this case was filed, and after
it had received discovery requests for the documents.
"When Columbia Medical Plan’s
members demanded in court that the HMO produce their subrogation records,
the HMO simply tossed the computers in the dumpster," said co-counsel
Bruce Plaxen of Plaxen and Adler in Columbia, Maryland. "They claim
that no backup records are available. We will urge the Court to crack down
on the HMO, so it doesn’t benefit from its illegal and unethical
CMP’s destruction of evidence is
consistent with its tactics for avoiding liability in this case. Rather
than repay its members what they are
owed, CMP has fought this case in the courts and in the state legislature.
On March 10, 2000, the Maryland Court of
Appeals unanimously ruled in Riemer that CMP had been illegally
billing their members – in violation of the Maryland HMO Act – by
charging them a second time for medical care whenever the members
recovered damage awards from third parties. The Court ruled that since the
HMO is a "prepaid plan," it was illegal for CMP to seek to
recover any payment other than premiums, deductibles, and co-payments.
In response to TLPJ’s victory in Riemer,
HMO lobbyists convinced the Maryland legislature to quickly push through
legislation that would retroactively allow HMOs to pursue subrogation
claims against their members as far back as 24 years. TLPJ and its legal
team then challenged this retroactive legislation, and on August 30, 2002,
in the consolidated case of Dua v. Comcast/Harvey v. Kaiser,
Maryland’s Court of Appeals held that the new law’s retroactive
application was unconstitutional.
In addition to Wolf and Plaxen, TLPJ’s
legal team on Riemer includes lead counsel Kieron F. Quinn of Quinn, Gordon
& Wolf, Robert K. Jenner of Janet,
Willoughby, Gershon & Jenner in Baltimore, and TLPJ’s F. Paul
Bland, Jr. and Power-Cotchett Fellow Kerry-Ann Powell. The Court’s order
in Riemer, and TLPJ's
brief with the court records establishing the destruction of
evidence, are posted on TLPJ’s web site, www.tlpj.org.
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