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Medical and legal experts estimate that the thousands of failed metal-on-metal artificial hip implants may cost taxpayers, insurers, employers and others billions of dollars in coming years, contributing to the soaring cost of health care. The financial fallout is expected to be unusually large and complex because the tragedy involves a class of products, not a single device or just one company. The metal-on-metal hip implant debacle extends beyond just DePuy ASR hip implants .

The metal-on-metal hips involve a ball and joint made of metal. They are failing at high rates within a few years instead of lasting 15 years or more, as advertised. The friction from metal parts against each other is generating debris that is damaging tissue and, in some cases, crippling patients.

The high failure rates have resulted in thousands of lawsuits. Recently, lawsuits against makers of all-metal replacement hips passed the 5,000 mark. Approximately 3,500 of those lawsuits involve the troubled DePuy ASR total hip replacement device. DePuy is a division of Johnson & Johnson. The hospital and other medical expenses for a patient who requires premature hip explant surgery can soar into the hundreds of thousands of dollars. Health insurers are alerting patients that they plan to recover their expenses from any settlement money that patients receive.

Thus, it is important that attorneys representing hip implant claimants understand the applicable subrogation laws. Some states have anti-subrogation statutes that cut off a health insurer's claim that it is entitled to be paid back from a personal injury recovery. For example, Virginia Code §38.2-3405 provides, in part, as follwos:

A. No insurance contract providing hospital, medical, surgical and similar or related benefits, and no subscription contract or health services plan delivered or issued for delivery or providing for payment of benefits to or on behalf of persons residing in or employed in this Commonwealth shall contain any provision providing for subrogation of any person's right to recovery for personal injuries from a third person.

B. No such contract, subscription contract or health services plan shall contain any provision requiring the beneficiary of any such contract or plan to sign any agreement to pay back to any company issuing such a contract or creating a health services plan any benefits paid pursuant to the terms of such contract or plan from the proceeds of a recovery by such a beneficiary from any other source; provided, that this provision shall not prohibit an exclusion of benefits paid or payable under workers' compensation laws or federal or state programs, nor shall this provision prohibit coordination of benefits provisions when there are two or more such accident and sickness insurance contracts or plans providing for the payment of the same benefits. Coordination of benefits provisions may not operate to reduce benefits because of any benefits paid, payable, or provided by any liability insurance contract or any benefits paid, payable, or provided by any medical expense or medical payments insurance provided in conjunction with liability coverage.

This state anti-subrogation law is trumped by federal law, therefore, a qualifed ERISA-based health insurance plan would be entitled to enforce its contractual subrogation provisions notwithstanding any state anti-subrogation statute. This is complicated area of law. In past mass tort settlements, including the settlement of mutliple Sulzer Hip Implant claims, a lien resolution firm was hired to negotiate globally with all lien holders, including private health insurers and Medicare. These resolution companies are able to strike better and faster deals with lienholders because they are able to offer the lienholders resolution of a high volume of liens. Claimants don't often hear about this aspect of the case, and can become rightfully frustrated when the lien negotiations are slowing down the disbursement of settlement funds. Claimants need to know that this is a likely and necessary phase of the process. Claimants usually do not get paid until the liens are resolved, and this process can last many months beyond the settlement of the underlying litigation.

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