The National Football League (NFL) reached a settlement this week compensating former players with head injuries, ALS, Parkinson's and other diseases. The class-action lawsuit that alleged the NFL failed to properly investigate and respond to the risk of concussion-causing hits is expected to pay up to $1 billion to more than 20,000 retired players. But there is a catch--at least one-fifth of the cut could go to their health insurers and not the players.
Federal laws and court rulings have held that insurers are able to recover the costs of medical treatment for injuries. Insurance companies like Medicare, Medicaid, and private insurers would be reimbursed by these medical liens and the settlement award that many ex-players already claim to be inadequate would be further reduced. The insurance companies could end up taking between 15% and 18% of the settlement award.
George Washington University law professor Alan B. Morrison filed an amicus brief. He expressed concern about the payments going to health insurers. Further, it could take over a year to discover which insurers are owed how much money.
Among the biggest beneficiaries will be Medicare, the government insurance program for the elderly and disabled. Over the last ten years, federal laws have increased Medicare's ability to recover treatment costs by mandating that it be notified of any legal settlements paid to beneficiaries. In 2014, Medicare netted $2.5 billion from taking a cut of payments made to its beneficiaries by third parties.
In 2013, the Unite States Supreme Court ruled that some private insurers also have the right to recover payments made to treat injuries caused by a third party under a theory of subrogation.
The federal judge in this case, Anita Brody, appointed Garretson Resolution Group, Inc. to negotiate discounts of the health-care liens. The company will help streamline the process and expedite the payments made to players. The judge stated that paying insurers before the ex-NFL players was "reasonable" given the significant penalites for failing to do so.