Personal Injury and Subrogation
One of the more complex areas of personal injury law is the concept of subrogation. Merriam-Webster Dictionary defines the term subrogation as the assumption by a third party of another’s legal right to collect a debt or damages. Primarily, this concept comes into play when a personal injury plaintiff incurs medical bills as a result of their claim against the defendant and those bills are paid by the plaintiff’s health insurance company. Almost every health insurance company has a subrogation clause that entitles them to reimbursement of whatever they pay out on the plaintiff’s behalf in the event that the plaintiff obtains a settlement based on those same injuries and medical bills.
In other words, in everyday life, a person goes to their doctor, the doctor sends the bills to health insurance, health insurance pays the bills and that is the end of the transaction (barring payment of deductibles and co-pays). In a personal injury case, a plaintiff goes to a doctor, the doctor bills health insurance, health insurance pays the bills, then health insurance notifies the plaintiff or plaintiff’s attorney of their intention to seek subrogation from the settlement by asserting a lien on the plaintiff’s recovery. Once the case has settled, the plaintiff or plaintiff’s attorney has an obligation to reimburse the health insurance company in the amount that was paid out.
Many times, most health insurance companies will negotiate or reduce the amount of their lien in the event of a low settlement or due to other issues with the case. However, there are many group or governmental health insurance policies that fall under ERISA (Employee Retirement Income Security Act), which, in most cases, requires full reimbursement of the lien amount. Medicare and Medicaid have their own complex subrogation rules as well. Additionally, if a personal injury plaintiff has a workers compensation claim in addition to their personal injury claim, the workers compensation carrier will have a right to subrogation as well. As you can see, subrogation can become a very complex issue, which usually requires the prompt attention of an attorney.
Contact the Attorneys of The Tickin Law Group if you have been in an accident and/or you have any personal injury related questions. We offer complimentary consultations.