Mississippi Insurance Law – Part 6
MISSISSIPPI Insurance-Related Law — An A to Z Guide
Here’s the next post sharing our 2016 update. If you like a full copy or have any questions, please email or call.
Made Whole Rule
The “made whole rule” is a general principle that an insurer is not entitled to equitable subrogation until the insured has been fully compensated. Hare v. State, 733 So. 2d 277 (Miss. 1999); United Services Auto. Ass’n v. Stewart, 919 So. 2d 24 (Miss. 2005). This equitable right to be made whole cannot be superseded by contrary contract language. 5 MS Prac. Encyclopedia MS Law § 40:97. So far, this rule applies only to insurance carriers and not to actual healthcare providers. Memorial Hospital at Gulfport v. Guardianship of Proulx, No. 2012-CA-01714-SCT (Miss. September 12, 2013).
The made whole rule does not apply to Medicaid’s or Medicare’s lien.
As to ERISA insurance payments, the Mississippi Supreme Court held that the made whole rule is not the default rule in an ERISA plan. Yerby v. United Healthcare, 846 So .2d 179 (Miss. 2002). Unless the individual insurance plan language provides a limitation on its right of reimbursement, the Court has held that ERISA trumps the made whole rule.
Mandatory Minimum Limits
See Financial Responsibility Law
Medical Records Costs
Mississippi limits the amount a medical provider can charge a patient or her representative for providing paper copies of medical records. Miss. Code Ann. § 11-1-52 provides for a charge of no more than $20.00 for pages 1 through 20, $1.00 per page for the next 80 pages, and $0.50 per page for all pages thereafter. A provider may also charge 10% for postage and handling and $15 for recovering the records from an off-site location.
The medical ethics rules (applicable to all physicians licensed in Mississippi) similarly limits the costs for providing paper copies of medical records to the patient, his legal representative, or other person holding a written authorization. The “ethics rules” give a little extra punch to this situation as they say that any refusal to release records “as enumerated above” is “unprofessional conduct, dishonorable or unethical conduct likely to deceive, defraud or harm the public . . .”
Under Federal law, a patient has the “right to obtain from [their health care providers] a copy of [their medical records] in an electronic format,” 42 USC §17935(e)(1), and that health care provider is allowed to bill “only the cost of … [c]opying, including the cost of supplies for and labor of copying,” 45 CFR 164.524(c)(4)(i). See Health Information Technology for Economic and Clinical Health Act (HITECH Act).
If an electronic copy of the records is requested, the medical provider should not charge the cost for creating paper copies.
If an insurance company requests these records, and specifically points out that only an electronic copy was requested and that the charges for paper copies are illegal, the medical provider often tries to claim that the HITECH Act’s medical records billing limits apply only to requests directly from the patient that are going straight to the patient, and so they don’t apply to other, even though it is at the patient’s request. This contention can be refuted as the Department of Health and Human Services made clear, “The final rule adopts the proposed amendment Sec. 164.524(c)(3) to expressly provide that, if requested by an individual, a covered entity must transmit the copy of protected health information directly to another person designated by the individual.” Federal Register January 25, 2013 Vol 78 No. 17, Page 5634.
Mississippi does not recognize common law marriages entered into after April 5, 1956. Miss. Code Ann. § 93-1-15. However, a common law marriage validly entered into in a state that recognizes common law marriage will be recognized in Mississippi. George v. George, 389 So. 2d 1389 (Miss. 1980).
The age of majority in Mississippi is 21. Miss. Code Ann. § 1-3-27.
However, all persons 18 or older are deemed to be adults for purposes of personal property. Therefore, anyone 18 or older, if not otherwise disabled, has the capacity to enter into binding contractual relationships affecting such personal property, including the right to settle a claim, and accept money in the settlement of a claim. Miss. Code Ann. § 93-19-13. Garret v. Gay, 394 So. 2d 321, 323 (Miss. 1981).
A minor age 15 or older may contract for life, health and accident insurance. Miss. Code Ann. § 83-7-19.
Mississippi applies the common law “rule of sevens.” A child under the age of seven is irrefutably presumed to be incapable of negligence. Children between the ages of 7 and 14 are
presumed to be incapable of negligence, but the presumption may be rebutted by showing that the child had elevated capacity. Children above the age of 14 are presumed to be capable of negligence. Steele v. Holiday Inn, 626 So. 2d 593 (Miss. 1993).
The father and mother are the joint natural guardians of their minor children and are equally charged with their care, nurture, welfare and education, and the care and management of their estates. Miss. Code Ann. § 93-13-1. Because of this, when settling a minor’s claim, both parents must petition the Court for authority to settle or one must be a petitioner and the other parent join in the petition for all relief requested. As the natural parents and guardians of their children, the mother and father can accept settlements of $25,000.00 or less before the Court without being appointed as guardian. Miss. Code Ann. § 93-13-211. When a total gross settlement is greater than $25,000.00, or personal property exceeding the value of that sum, a guardian is required to be appointed to accept the settlement.
A minor under guardianship is a ward of the Chancery Court. Carpenter v. Berry, 58 So. 3d 1158 (Miss. 2011). As such, it must take all necessary steps to conserve and protect the best interest of these wards of the court. Id. And all persons who deal with guardians or with the courts in respect to the rights of minors are charged with this knowledge. Id. See also Union Chevrolet Co. v. Arrington, 138 So. 593 (Miss. 1932).
It has generally held that it is ultimately for the Chancery Court to determine the application and validity of subrogation claims, including those from an ERISA plan. See Cooper Tire v. Striplin, 652 So. 2d 1102 (Miss. 1995).
It is incumbent upon a defendant, in an action seeking to settle a claim of a minor under guardianship, to assure that all of the procedures set out by the Supreme Court are followed or risk a set-aside of the settlement. Carpenter v. Berry, 58 So. 3d 1158 (Miss. 2011).
Every petition for authority to compromise and settle a minor’s claim shall set forth the facts in relation thereto and the reason for such compromise and settlement and the amount thereof. See Unif. Chanc. Ct. R. 6.10. According to the Uniform Rule, the material witnesses concerning the injury and damages shall also be produced before the Chancellor for examination. Id. Where counsel representing the minor has investigated the matter and advised settlement, he or she shall give testimony to the Court regarding the result of the investigation. Id.
It is incumbent upon those paying money to a guardian to make certain that the chancellor’s decree is faithfully executed in every respect. Joyce v. Brown, 304 So. 2d 634 (Miss. 1974).
In practice, we have found that an increasing number of chancellors are requiring that the minor be represented by an attorney at the settlement hearing.
Parental Liability for Medical Expenses
Mississippi law requires parents to pay for their child’s reasonable medical expenses. This is a legal duty of both the father and the mother. The minor child is not legally responsible for these expenses. McLain v. West Side Bone and Joint Center, 656 So. 2d 119 (Miss. 1995); Lane v. Webb, 220 So. 2d 281 (Miss. 1969); Alexander v. Alexander, 494 So. 2d 365 (Miss. 1986). Haver v. Hinson, 385 So. 2d 605 (Miss. 1980). Accordingly, the medical, surgical, hospital and nursing expenses incurred by curing or relieving a minor child’s injuries are recoverable, if at all, by his parent, and not by him (unless he is emancipated). These are separate claims owned by the parents of the minor. However, if the parents bring suit on behalf of the minor “as next friend” (as provided for under the rules), the courts have held that parents waive their separate claim for such damages in favor of the child and permit all damages to be included in one case. Lane v. Webb, 220 So. 2d 281 (Miss. 1969). Double recovery for such expenses is not allowed. Cook v. Children’s Medical Group, P.A., 756 So. 2d 734 (Miss. 1999).
An insurer may cancel or void a policy from its inception and treat as if it never existed upon proof that the misrepresentation of a material fact is in the application. Casualty Reciprocal Exchange v. Wooley, 217 So. 2d 632, 635-36 (Miss. 1969).
Warranty v. Representations
A distinction is made as to whether the misrepresentations are warranties or representations. Sanford v. Federated Guaranty Ins. Co., 522 So. 2d 214, 216-18 (Miss. 1988).
The insurer only has to show that the information is literally not true in the case of a warranty because the materiality of the statement will be presumed. Colonial Life & Acc. Ins. Co. v. Cook, 374 So. 2d 1288, 1291 (Miss. 1979).
In the case of representations, the insurer must show that the information is not substantially true and was material to the risk assumed by the insurer. National Cas. Co. v. Johnson, 67 So. 2d 865, 867 (Miss. 1953). Materiality is determined by the probable and reasonable effect which truthful answers would have on the insurer. Sanford, 522 So. 2d at 217. If the information helps determine whether or not to accept the risk, then it is material. Wooley, 217 So. 2d at 635-36. Intent does not determine misrepresentation, and a policy may be voided even if there is an innocent and good faith belief the statements are true. Fidelity Mut. Life Ins. Co. v. Miazza, 46 So. 817, 819 (Miss. 1908).
The terms of the application control whether a question is a warranty or a representation. The terms must clearly indicate that the terms will be treated as warranties, and any ambiguity will favor treating the statements as representations. Sanford, 522 So. 2d at 216-17.
A word of caution is necessary whenever legal issues are at stake. The information contained in these posts is for general guidance on matters of interest only. The application and impact of laws can vary widely based on the specific facts involved. Given the changing nature of laws, rules and regulations, there may be omissions or inaccuracies in information contained in this report or laws may have changed or been reinterpreted. Accordingly, the information in this report is provided with the understanding that the authors are not herein engaged in rendering legal, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with legal or other competent advisers. Before making any decision or taking any action, particularly before denying any first-party claims, you should consult with your counsel or the attorneys at Holcomb Dunbar.