What is Subrogation?
At the conclusion of a lawsuit, one of the most confusing topics for clients can be the issue of subrogation. Most clients don’t realize that if their health insurance or Medicare pays for some of their medical bills stemming from an auto accident or slip and fall and there is a successful recovery on behalf of the client that the health insurance or Medicare is entitled to be paid back a percentage of the money that they were forced to pay.
If a client has medical bills paid by their health insurance company or Medicare, it is incumbent upon the Plaintiff’s attorney to seek out the amount of the lien that the health insurance company would have for the bills that were paid. It is also important to explain to the clients the process early in the lawsuit so they expect it to come up later. Clients often think, “why do I have to pay for medical bills someone else caused?” The answer is that it is the law to protect the health insurance companies. If a health insurance carrier is forced to pay for medical bills due to someone else’s negligence, and there is a recovery for that injured client, then the health insurance carrier is entitled to recover what was paid.
However, health insurance carriers are rarely paid everything that they pay out for people injured in negligence claims. Practically speaking, most health insurance carriers will reduce the amount of their lien by the amount of the attorney’s fees.
Example – Janie Doe slipped and fell at a department store and suffered a significant leg injury. As a result of her injury, her health insurance company paid her medical providers $10,000.00 toward medical bills. JB Law was able to settle her personal injury case in pre-suit for $100,000.00 meaning the attorney’s fees are 33 1/3%. After the case was resolved for $100,000.00, JB Law reached out to the health insurance company for a reduction of the $10,000.00 lien. Oftentimes, the lien will be reduced by the percentage of the attorney’s fees which is 33 1/3%. As such, JB Law would expect the lien to be reduced to at least $6,666.66. There are times, depending on the amount of the settlement when the reduction can be for more than the corresponding attorney’s fees.
I have handled thousands of personal injury cases. Do not trust your personal injury case to a firm that does not actively litigate and try cases. Do not fall victim to one of the advertising firms where you will get lost in the shuffle and just become a number in a file cabinet. At JB Law, all clients are given the attention they deserve and are provided with my personal cell phone. It is not my “work” cell phone. It is my only cell phone. My clients can always reach me and always know what is going on with their case.