When a personal injury claim goes to court for trial, compensation can be recovered, either through a settlement or a verdict. This monetary settlement is intended to cover damages and losses associated with the victim’s injuries and subsequent recovery. In cases of gross negligence or serious injury, additional compensation for pain and suffering may be awarded.

Although a victim’s settlement is recovered for them, there are also portions owed to other parties. In almost all cases, a portion of a settlement is paid to the law firm that represents you, since most personal injury practices operate on a contingency fee basis. This means that they do not charge attorney fees unless they prevail for their clients.

However, there are some cases in which the victim’s private health insurer demands reimbursement of money paid for their medical care after an accident. This reimbursement process is known as surrogacy, which has the potential to impact a victim’s personal injury award in a significant way. Continue reading to learn more about surrogacy and what to expect with your pending personal injury claim.

Surrogacy and Health Insurance Companies

Subrogation is an active process within various health insurance companies, both private and government. This includes private providers like Anthem Blue Cross and Blue Shield, as well as government organizations like Medicaid and Medicare. Apart from insurance companies, subrogation can also apply to hospitals. In addition, government entities that are owed a refund can criminally penalize both the representing attorney and their client if such payments are not made following a verdict or settlement in favor of the client.

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 your health insurance policy contract. In exchange for a monthly premium, your health insurance company will pay your medical expenses and any bills that exceed your deductible.

However, many policies also contain a paragraph discussing reimbursement of bills and medical expenses paid in the event a member uses the amount of medical bills as a basis for a claim and later collects reimbursement from a third party . This would be a subrogation clause.

An insurance company typically alerts the victim’s attorney with a subrogation lien or claim letter, which provides a precise schedule detailing the medical payments they claim as subrogation interest. Some states support a “common fund” doctrine that essentially requires insurers to reduce their subrogation interest by the amount of attorney fees paid by the victim. This is known as a “prorated” payment, and not all states support this principle.

talk to your lawyer

If you are considering filing a personal injury claim, or are 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.