Rendering the Lard

Rendering the Lard - May 12, 2019

State Representative David Perryman

One branch in my family tree connects directly to the Ozarks and while most regions of the country have unique sayings that have been passed down through generations, none are more numerous or colorful than those repeated over the decades by residents of the Appalachian and Ozark hill country.

For instance, one could not get much luckier than a farmer who had “cut a fat hog” on butchering day. While today we may believe that swine are killed for ham, bacon, sausage and pork chops, a product that was possibly more essential was the layer of fat that could be rendered into lard and used in cooking for the coming year.

Today, the term “cutting a fat hog” may be used to refer to an unearned windfall that occurs without excess effort and often produces an excessive amount of monetary gain.

Currently, a Bill is laying on the Governor’s desk that may provide such a windfall to lawyers that could be hand-picked by the Oklahoma Department of Insurance. Seldom are windfalls accidental and those that involve government contracts are always suspect. Senate Bill 251 is definitely suspect.

By way of background, Oklahoma and Federal law require that any person who receives Medicare or Medicaid benefits to treat an illness or injury that was caused by an accident or by the wrongful acts of a company or some other person, must repay Medicaid and/or Medicare before they can benefit from a recovery through a lawsuit. For instance, if a person runs a stop sign and injures someone who is on Medicare, the injured person must repay Medicare for the cost of treatment before they are allowed to keep compensation.

In Oklahoma, three or four employees at the Oklahoma Health Care Authority take care of those collections with a part of the recovery reimbursing the federal government and a part reimbursing the state. Those three or four employees have historically been very efficient. Their total salary is around $150,000 per year and last year they collected $8.7 Million. The year before they collected $7.1 Million and just over $8 Million the year before that.

So the cost of the recovery is just a fraction of a percent of the total amount recovered. In what appears to be a “brother-in-law” attempt to channel attorney fees to someone’s campaign contributor, Senate Bill 251 which passed the Senate 32-13 and the House 74-26 in near party line votes will change all that.

Senate Bill 251, now sitting on the Governor’s desk will REQUIRE that 100% of all claims be turned over to outside private legal counsel who will collect the money due the state and federal government on a contingency fee basis. It doesn’t take a rocket scientist to know that lawyers don’t handle contingency fee cases for less than 1% of the amount collected, or even 10 or 15 or 25% of the amount collected.

Oklahoma stands to “give away” millions of dollars annually in the form of attorney fees to one or more law firms chosen by the Oklahoma Department of Insurance. The beneficiaries of those lucrative contingency fee contracts, just like the owners of those fat hogs will be living in “high cotton” where the crops are good and the prices are too.

Questions or comments, please call or write 405-557-7401 or David.Perryman@okhouse.gov.