What Is Subrogation and How Does It Affect Personal Injury Settlements?
When a personal injury claim goes to court for trial, compensation can be recovered, whether through a settlement or verdict. This monetary settlement is intended to cover the damages and losses associated with a victim’s injuries and successive recovery. In cases of egregious negligence or serious injuries, additional compensation may be awarded for pain and suffering.
Although a victim’s settlement is recovered for them, there are portions also owed to other parties. In almost all cases, a portion of a settlement is paid to the representing law firm since most personal injury practices work on a contingency fee basis. This means they do not collect lawyer fees unless they prevail for their clients.
However, there are some cases in which a victim’s private health insurance carrier requires reimbursement for monies paid for their medical care following an accident. This reimbursement process is known as subrogation, which has the potential to impact on a victim’s personal injury recompense in a major way. Continue reading to learn more about subrogation and what to expect with your pending personal injury claim.
Subrogation and Health Insurance Carriers
Subrogation is an active process within various health insurance companies, both private and governmental. This includes private carriers such as Anthem Blue Cross and Blue Shield, as well as government organizations, such as Medicaid and Medicare. Separate from insurance carriers, subrogation can also apply to hospitals. Furthermore, governmental entities that are owed a refund can criminally penalize both the representing lawyer and their client if such payments are not made following a verdict or settlement in a client’s favor.
Identifying Subrogation Clauses in Your Policy
It is important to know whether or not your particular health insurance policy contains subrogation rights. To do this, pay close attention when reading over your health insurance policy contract. In exchange for a monthly premium, your health insurance carrier will pay your medical expenses and bills that exceed your deductible.
However, many policies also contain a paragraph that discusses reimbursement for paid medical expenses and bills in the occasion that a member uses the extent of medical bills as a basis for a lawsuit, and subsequently collects reimbursement from a third party. This would be a subrogation clause.
An insurance carrier generally alerts a victim’s lawyer with a subrogation lien or claim letter, which provides a precise outline detailing the medical payments they are claiming a subrogation interest. Some states support to a “common fund” doctrine that essentially obligates insurance carriers to reduce their subrogation interests by the amount of fees paid by the victim to the lawyer. This is referred to as a “pro rata” payment, and not all states condone this principle.
Talk to Your Lawyer
If you are thinking about filing a personal injury claim, or currently awaiting a pending trial, it is important to discuss all of your questions and concerns with your trusted personal injury lawyer. They can guide you through the legal process from start to finish, and educate you on the details and likely outcomes of your case.