The U.S. Supreme Court on Friday agreed to take up Coventry Health Care's appeal over whether insurers can recoup costs from their federal employee planholders' personal injury settlements.
Coventry Health Care of Missouri asked the justices to determine whether the Federal Employees Health Benefits Act pre-empts state insurance laws, a key issue in their quest to take settlement funds from accidents to cover planholders' ensuing medical costs.
In the case at hand, Coventry placed an approximately $6,500 lien on a settlement between planholder Jodi Nevils and another driver in a car accident. Nevils, a federal employee who has a FEHBA insurance plan with Coventry, alleges that move violates Missouri state law.
But Coventry says these liens are necessary and protected by FEHBA. If the Supreme Court sides with Nevils and prevents the insurer from recouping the funds, Coventry says it will “jeopardize a massive, multibillion-dollar program that serves 8 million federal workers and dependents.”
Missouri's state courts have been divided on the issue; an appeals court sided with Coventry, while the state Supreme Court has twice ruled against the insurer.
The case has made it to the U.S. Supreme Court once before. In 2015, the justices overturned a Missouri Supreme Court decision against Coventry and ordered the state high court to re-evaluate whether a new FEHBA regulation pre-empted the state's law against third-party settlement liens. But the state high court stuck with its original decision in May 2016, leading to a renewed appeal.
The U.S. Supreme Court justices also decided on Monday not to review another healthcare-related case; the high court will not weigh in on whether there are antitrust concerns with drug pay-for-delay settlements that don't include a financial agreement. The court had been asked to look at a 3rd U.S. Circuit Court of Appeals decision that revived a pay-for-delay lawsuit against GlaxoSmithKline and Teva Pharmaceutical Industries for their agreement to hold a generic version of the anti-convulsant Lamictal off the market.
