Subrogation claims are generally made by your health insurance provider after you receive a settlement or judgment in your personal injury claim. If your health insurance provider paid your medical expenses prior to your settlement, they may be allowed to receive a portion of the settlement you received to cover their expenses paid out for your medical bills. However, there are limits to what they can claim, and you may be able to reduce the amount they take from your settlement.
Reading the Fine Print
In every health insurance policy there is a subrogation clause. This is true whether you have a private insurance carrier, Medicare, or Medi-Cal. While few people take the time to read every detail in their insurance policy, the subrogation clause is a part of your health insurance
Subrogation comes into play when a third party pays for medical claims in a settlement. So, for example, when you receive a settlement check from the insurance company of the person who injured you, that is a third party. In those cases, the subrogation clause of your health insurance would come into play and you would be required to surrender some of your settlement.
However, if you received money directly from the party that injured you, subrogation will usually not come into play. This can be especially important in cases where the injured party is self-insured. This may be self-insurance for automobile liability that some people carry, or a company may be self-insured in some cases for workers’ compensation claims. If the money you receive comes from your own insurance as part of an uninsured or underinsured motorist compensation, your health insurance may not claim subrogation in most cases. It is important to know if the compensation you are receiving is coming from a third-party insurer or directly from the party who injured you in an accident.
Knowing the Limits of Subrogation
Your health insurance may not simply take all that you receive in settlement as part of subrogation. California state law limits subrogation to no more than one-third of your total settlement if you engaged an attorney, or one-half of your settlement without an attorney. This is meant to protect you from situations where you might receive nothing after subrogation and ensures that you will receive at least one-third of your settlement.
Ways to Lessen the Impact of Subrogation
You or your personal injury attorney may be able to negotiate with your health insurance provider to reduce the amount being claimed by subrogation. Because attorneys are more experienced in dealing with these situations, they often get better results than attempting to negotiate the subrogation claim yourself.
One way to reduce the amount of subrogation is to ensure that the medical expenses claimed are only those involved in the accident. You or your attorney will ask the health insurance company for a detail account of all the medical bills they are claiming as part of subrogation. This should eliminate any medical bills that were not related to your accident.
Secondly, request any attorney’s fees be subtracted from the subrogation claim. After all, if you had not engaged an attorney, you likely would not have received any settlement. Therefore, the amount of the attorney’s fees should be taken out of the subrogation claim as well.
Finally, negotiate the remainder of the claim. After all, the insurance company wishes to close the matter quickly as well. In many cases, a skilled negotiator is able to get the insurance provider to reduce the amount of their subrogation claim by several percent. The more experienced the negotiator, the more likely they are to get the subrogation reduced, and the greater the reduction they may be able to achieve. To speak with our legal experts , contact Walkup, Melodia, Kelly & Schoenberger for a free consultation.
