Item G1 BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: November 20.2013 Division: Emplo eeServices
Bulk Item: Yes — No X Department: Human Resources
Staff Contact Person: Teresa Aguiar X4458
AGENDA ITEM WORDING: Discussion and approval to waive lien against$139,000 settlement
proceeds received by covered dependent in settlements, and terminate coverage under the County's
Health Plan.
ITEM BACKGROUND:
On October 30, 2009, a covered dependent of the County's Health Plan was seriously injured. The
health plan has paid out over$290,000 in claims for this individual. Approximately one year later the
employee and covered dependent signed settlement agreements which also stated that they were
unaware of any liens. Under paragraph 14 of the contract between Wells Fargo and the County, Wells
Fargo was required to use the services of a company by the name of Healthcare Recoveries, Inc. to
pursue subrogation claims. Wells Fargo never hire the company to act on the County's behalf and did
nothing else to assert the lien.
The BOCC has three options which are outlined in the attached memo.
PREVIOUS RELEVANT BOCC ACTION: N/A
CONTRACT/AGREEMENT CHANGES: N/A
STAFF RECOMIVIEENDATIONS: Approval to release the lien of$139,000 and terminate the
covered dependent's health insurance coverage with the County effective immediately.
TOTAL COST: $139,000_INDIRECT COST: BUDGETED: Yes No X
DIFFERENTIAL OF LOCAL PREFERENCE:
Internal Service Funds
COST TO COUNTY: $139,000 SOURCE OF FUNDS: Primarily Ad Valorem
REVENUE PRODUCING: Yes— No_ AMOUNT PER MONTH Year
APPROVED BY: County Att OMB/Purchasing Risk Management
DOCUMENTATION: Included X Not Required
DISPOSITION: AGENDA ITEM#
Revised 2/27/01
"t BOARD OF COUNTY COMMISSIONERS
County of Monroe Mayor George Neugent,District 2
Mayor Pro Tern,Heather Carruthers,District 3
The Florida.Keys Danny L.Kolhage,District 1
David Rice,District 4
Sylvia J.Murphy,District 5
Office of the Employee Services Division Director
The Historic Gato Cigar Factory
1100 Simonton Street,Suite 268
Key West,FL 33040
(305)292-4458—Phone
(305)292-4564-Fax
TO: Board of County Commissioners DATE: November 18, 2013
FROM: Teresa E. Aguiar,
Employee Services Directo
SUBJ: Discussion and Approval to waive lien and terminate covered dependent
from the County's Health Plan
This item requests your approval to waive a lien against$139,000 settlement proceeds received by
covered dependent in settlements, and terminate coverage under the County's Health Plan.
Background:
On October 30, 2009, a covered dependent of the county's health plan was seriously injured. The
health plan has paid out over$290,000 in claims for this individual.
On September 15, 2010, the employee and the covered dependent signed a settlement agreement
for$100,000 with an auto insurance company and in that agreement they also stated that they were
unaware of any liens. Under the terms of the Health Plan, the covered dependent had an obligation
to notify the County prior to any settlements.
On June 10, 2011, the attorney representing the covered dependent, sent a letter to Wells Fargo
(the health plan administrator at that time)requesting waiver of the lien. In the letter the attorney
mentions that the parties had already settled with the auto insurance company for$100,000. In
July, 2011 the attorney sent another letter to the County Attorney's office requesting to waive the
lien.
On May 14, 2012, the employee and covered dependent signed another settlement agreement for
$39,000 with the other party involved in the accident and in that agreement again stated that they
were unaware of any liens. In October, 2012 a letter dated September 24, 2012 was received from
the covered dependent's attorney stating that the two claims were received by the individuals and
asking the County to waive the lien.
Under paragraph 14 of the contract between Wells Fargo and the County, Wells Fargo was
required to use the services of a company by the name of Healthcare Recoveries, Inc. to pursue
subrogation claims. The contract doesn't say exactly what Healthcare Recoveries, Inc. will do
however it is clear that Wells Fargo never hired the company to act on our behalf, nor did Wells
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Agenda Item
Discussion and Approval to
Waive lien
Fargo do anything else to assert the County's lien. To pursue Wells Fargo we would have to show
damages—the difference between what we expected to receive and what we actually received. In
this case, the figure would equal the amount of the lien waived by the health plan, or$139,000,
minus the dependent's attorney's fees and costs,which we assume is approximately 33%. If the
lien is waived,Wells Fargo could take the position that the County failed to mitigate its own
damages when it waived the lien rather than insisting on recouping the funds from the dependent.
Therefore, as part of this agenda item,we are seeking direction from the Board of County
Commissioners regarding whether it wants to pursue the amount from Wells Fargo (now
HealthSmart). The County has five years from the breach, or until October, 2016, to file any
action against Wells Fargo.
The attorney representing the covered dependent advises that the patient is or shortly will be
covered by Medicare.
The County has three options:
1. Agree to release the lien of$139,000. We will terminate his coverage under the plan. The
covered dependent has agreed to this offer.
2. Leave the lien in place and try to recoup the settlement proceeds from the covered
dependent. The dependent's attorney will probably put an item on the BOCC agenda,
under sounding board.
3. Whether the lien is left in place or waived, pursue a claim against Wells Fargo for breach
of contract in failing to use the services of Healthcare Recoveries, Inc. to pursue the money
owed to the County,up to and including litigation if necessary.
It is recommended that you approve to release the lien of$139,000 and terminate the covered
dependent's health insurance coverage with the County effective immediately. If you have any
questions, please do not hesitate to contact me at X4458.
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