Insurers Want $19M From Asbestos Lawyers

     GALVESTON (CN) — Humana, Aetna and UnitedHealthcare sued five Texas law firms on Tuesday, demanding $19.5 million in medical benefits they paid the firms’ asbestos clients.
     Asbestos became prized building material in the late 1800s for its fire-resistant and sound-absorption qualities. By the 1950s, the friable mineral had been incorporated into nearly every aspect of commercial and home buildings: flooring, roofing, concrete, insulation and bricks.
     But inhaling asbestos can cause lung diseases, including cancer. Class action lawsuits and government regulations have resulted in tens of billions of dollars in judgments and other costs, including remediation of buildings and asbestos mines.
     The U.S. Environmental Protection Agency in 1990 banned materials containing more than 1 percent asbestos from being sprayed on buildings, pipes and electrical lines.
     Most asbestos personal injury claims are settled through asbestos bankruptcy trusts, set up in the reorganization plans of bankrupt companies that manufactured asbestos, according to the insurers’ Sept. 6 lawsuit in Galveston Federal Court.
     Once an asbestos trust is established, an asbestos claimant must seek a settlement from the trust rather than through a lawsuit against the debtor, the insurers say in the complaint.
     “There are presently more than 50 asbestos trusts in operation. Additional asbestos trusts are scheduled to be established or begin accepting claims within the next 12-18 months. Collectively, these trusts will hold more than $40 billion in assets,” the lawsuit states.
     The three major insurance companies say the five defendant law firms have pocketed more than $19.5 million in bankruptcy trust settlements that belong to them, as reimbursement for medical benefits they provided for 297 of the firms’ clients.
     The insurers say they had to review dozens of bankruptcy documents and file motions in bankruptcy courts to identify those 297 people, because asbestos bankruptcy trust claims operate “under a cloak of secrecy” with no public disclosure of who gets paid, how much they are paid, nor from which trust.
     The insurers say that as Medicare Part C providers, federal law requires the law firms to reimburse their medical benefit payments to the firms’ clients.
     They say the law firms repay benefits to the federal government when their asbestos clients are covered by Medicare Parts A and B, which are administered directly by the feds, but ignore those bills when the clients are covered by private insurers under Medicare Part C.
     They allege ERISA and Medicare Act violations and unjust enrichment.
     They want the law firms ordered to hold asbestos settlements in a trust account.
     They also seek a declaration they are entitled to a list of the names of all asbestos claimants represented by the law firms, and reimbursement of medical benefits paid to the 297 claimants before the firms pay out any more asbestos settlements.
     The insurers are represented by John Thomas with Hicks Thomas in Houston.
     The defendants are Brent Coon & Associates, and Reuad Morgan & Quinn LLP, both based in Beaumont; The Bogdan Law Firm, and Shrader & Associates LLP, both of Houston; Arlington-based Foster & Sear LLP; and Austin-based Hissey Kientz LLP.
     None of the firms responded to requests for comment.
     Aetna, Humana and UnitedHealthcare are three of the six largest health insurers in the United States. Together, they insure more than 100 million U.S. residents.

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