Wednesday, November 21, 2007

Wal-Mart = Scrooge

Actually, I'm not sure that analogy works. Scrooge in the end was redeemed. I'm not sure that's possible for the heartless management at Wal-Mart.

Per the Wall Street Journal, with a hat-tip to JDalton

A collision with a semi-trailer truck seven years ago left 52-year-old Deborah Shank permanently brain-damaged and in a wheelchair. Her husband, Jim, and three sons found a small source of solace: a $700,000 accident settlement from the trucking company involved. After legal fees and other expenses, the remaining $417,000 was put in a special trust. It was to be used for Mrs. Shank's care.

Instead, all of it is now slated to go to Mrs. Shank's former employer, Wal-Mart Stores Inc.

Two years ago, the retail giant's health plan sued the Shanks for the $470,000 it had spent on her medical care. A federal judge ruled last year in Wal-Mart's favor, backed by an appeals-court decision in August. Now, her family has to rely on Medicaid and Mrs. Shank's social-security payments to keep up her round-the-clock care.

What gives them the right to do this?

The reason is a clause in Wal-Mart's health plan that Mrs. Shank didn't notice when she started stocking shelves at a nearby store eight years ago. Like most company health plans, Wal-Mart's reserves the right to recoup the medical expenses it paid for someone's treatment if the person also collects damages in an injury suit.


In insurance circles, the recovery practice is called "subrogation." Employers and insurers say it's necessary to ensure that medical expenses aren't paid twice. By recovering those costs from someone who's been compensated elsewhere, they argue, they're saving money for everyone on the plan.


In cases like the Shanks', where injuries and medical costs are catastrophic, accident victims sometimes can be left with little or none of the money they fought for in court. Health plans are increasingly adopting language such as Wal-Mart's, which dictates that it is to be paid first out of any settlement, regardless of what remains for the injured person. Moreover, the victim is responsible for all legal costs in pursuing the suit.

"It's especially in the catastrophic cases that people are almost never fully compensated," says Roger Baron, a professor of law at the University of South Dakota and a specialist in health-plan law. "And then their health plan, that's been collecting premiums from them all this time, wants to take it away?"

This is not right. Yes, there is justification for subrogation in many cases but there's a humane standard that needs to be met as well. And Wal-Mart has failed utterly in their treatment of Mrs. Shank.

Read the rest of the story. The details of this gold star family are heart-breaking and Mrs. Shank doesn't even understand why her son doesn't visit her anymore.

So many words to describe Wal-Mart wander through my mind: disgusting, loathsome, inhumane, lower than scum. But none of them are adequate to describe just how awful Wal-Mart's actions have been.

I find I must fall back to something I learned when I was young:

By their fruit, ye shall know them.


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