If you were seriously injured in a car accident, received medical treatment, filed a personal injury lawsuit, and obtained a settlement, your health insurance company will likely seek reimbursement for the medical expenses it paid on your behalf.
This repayment obligation generally applies even if you were not the at-fault driver and even if your coverage was provided through Medicare or Medicaid.
Repayment obligations involving government programs are especially important because federal and state agencies may impose significant penalties on attorneys or other parties who fail to protect their reimbursement rights.
The New York City car accident lawyers at Douglas & London understand how to negotiate and reduce reimbursement claims whenever possible, helping clients retain as much of their settlement or verdict as the law allows.
Subrogation
Subrogation is the legal process through which your health insurer seeks repayment for medical bills it covered after you recover compensation through a personal injury settlement or verdict.
As the insured party, you generally cannot recover compensation for medical expenses from both the at-fault party and your health insurer for the same bills. Doing so would amount to a double recovery.
Many people who attempt to handle injury claims without an attorney are unaware of subrogation rights. They may receive compensation from the at-fault driver’s insurance company and spend the funds without realizing that a portion must be used to reimburse their insurer.
Later, they may receive a demand letter from the insurance company seeking repayment. This situation can often be avoided with experienced legal representation.
The health insurance contract
Private health insurance policies — including plans through providers such as Blue Cross Blue Shield or Aetna — often contain language giving the insurer the right to seek reimbursement if medical expenses are recovered through a third-party claim.
This commonly occurs in personal injury lawsuits, where damages may include compensation for accident-related medical bills.
From the insurer’s perspective, it would not have needed to pay those medical expenses if the at-fault driver had not acted negligently. As a result, the insurer may assert a right to reimbursement from the settlement proceeds paid by the negligent party’s insurance carrier.
Importantly, if you do not recover compensation from a third party, you generally do not have to reimburse your health insurer.
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Subrogation letters and liens
Your attorney will typically receive a subrogation notice or lien from your health insurance company outlining the amounts it claims must be reimbursed.
Throughout the case, your lawyer should monitor and track the insurer’s claimed interest. Once the case resolves, your attorney may negotiate to reduce the amount owed.
For example, suppose you visited the emergency room after an accident and received a $5,000 bill. Your insurer may negotiate directly with the hospital and ultimately pay only $2,000.
However, during settlement negotiations or trial, the full $5,000 medical charge may still be presented as part of your damages claim.
After the settlement or verdict, the insurer may recover the $2,000 it actually paid, while the remaining amount may remain part of the injured person’s overall recovery.
Contact Douglas & London today
The complexities of subrogation and insurance reimbursement are just one reason why experienced legal representation is so important after a serious accident.
Our dedicated New York City personal injury lawyers have recovered millions of dollars in verdicts and settlements for injured clients.
While most cases resolve through settlement negotiations, we are fully prepared to go to trial whenever necessary to protect our clients’ interests.
There are never any legal fees unless we recover compensation on your behalf.
Contact Douglas & London today for a free and confidential consultation. We are available 24/7.
