If you have a health insurance plan, you may assume it will pay all of your medical bills. You may also think that that you can also make the at-fault driver’s liability insurance company pay you for your damages, including those same medical bills.
But frequently your Blue Cross or Aetna plan wants to be reimbursed from the money you recover in a personal injury settlement or trial. You may already have received its notice asking you for more information about your accident or even an official lien.
The concept is called subrogation and it can throw a wrench into an accident recovery — especially if you don’t have a good personal injury lawyer fighting for you.
How Subrogation Works
The idea behind subrogation is that the insurance company stands in your shoes regarding financial responsibility. The insurance pays money that, without insurance, you would owe to the hospital or doctor instead. So the health insurance company fronts you the money, but expects repayment from anyone who was at fault.
The reimbursement clause of the Employee Retirement Income Security Act of 1974 (ERISA) often gives the health insurance company the right to recover the amount it paid. This federal law supposedly protected employees and was sponsored by our liberal Texas senator (Lloyd Bentsen). However its draconian language superseded any state statutes related to employee benefit plans and was a victory for insurance companies. Today, almost all employees with health insurance are governed by ERISA plans.
How Does Subrogation Affect Auto Accident Recovery?
When negotiating a settlement, the insurance company’s subrogation rights are often one of the most problematic issues. For example, if the at-fault driver offered a total settlement of $20,000, your medical bills are that amount, and your Blue Cross plan demands repayment and asserts a lien on the recovery, you will receive nothing for future medical bills, lost wages, disability and your other damages.
Effective Approaches to Subrogation
Berenson Injury Law works hard to maximize how much money our clients receive. One way is to fight improper subrogation claims that do not follow the law. We make the company prove that it is legally entitled to be repaid. If the company can prove that the plan complies with ERISA, we negotiate to reduce the claim amount. In a recent case, we reduced an over $200,000 bill to only $10,000. We also negotiate with hospitals and doctors to make them reduce their medical bills if they did not file on health insurance or it refused to pay them.
Further, a Texas law that took effect in 2014, Chapter 140 of the Texas Civil Practice & Remedies Code, partially reversed the Texas Supreme Court’s 2007 decision in Fortis v. Cantu that overturned the long-standing “made whole doctrine” and caps the amount if the health insurance plan is not self-funded.
When negotiating a settlement with the at-fault party, we seek the maximum possible amount for medical bills, disability, lost wages, disfigurement, pain, suffering and other damages. If the company refuses to pay a good settlement, we file a lawsuit and take the case to a judge and jury.
We take our personal injury cases very seriously. We are familiar with the complex law that governs these claims and do all that we can to minimize the repayment to insurance companies. If you have been injured and have questions about what you should do, please call us. Our Dallas-Fort Worth law firm helps you recover your rightful damages so your car or truck accident doesn’t burden your financial future.