Health insurance companies file subrogation claims in personal injury cases. These claims protect the health insurance company’s right to reimbursement from a personal injury settlement or jury verdict.

How Does a Subrogation Claim Work in a New York Personal Injury Case?

How Does a Subrogation Claim Work in a New York Personal Injury Case?

You could incur substantial medical bills when you are injured in an accident or other personal injury. The party who caused your injury could be liable for the cost of medical treatment. However, you do not receive any money for your damages until you settle the personal injury claim.

Until you settle your personal injury case, you are responsible for paying the medical bills incurred because of the accident or injury. If no other form of insurance covers the medical costs, you might turn the bills in to your health insurance company. 

Most health insurance policies cover medical bills incurred because of accidental injury. However, the policies contain a subrogation clause. Subrogation is the right to take over the legal rights of another party. 

Therefore, let’s assume your health insurance company pays $50,000 in medical bills for a slip and fall accident. You receive a personal injury settlement of $260,000 for your claim. 

Your health insurance provider exercises its subrogation rights under the policy. Therefore, you must reimburse the health insurance company $50,000 from your injury settlement for the medical bills it paid.

Why Are Subrogation Claims Allowed in New York?

Subrogation prevents an accident victim from receiving double recovery for the same damage in a personal injury case. 

Economic damages include medical bills, lost wages, and other out-of-pocket expenses. You can demand compensation for the total of all financial losses.

However, your health insurance provider paid the medical bills. So, if you keep the portion of the settlement amount intended to reimburse you for medical costs, you “double dip” for the medical bills. 

Does Subrogation Apply to Government Health Insurance Programs?

Do you have health insurance coverage from Medicare, Medicaid, or another government program? If so, subrogation applies to any payments made under those programs for medical costs related to the accident or injury claim. 

You could lose health care benefits if you do not pay the subrogation claims. In addition, the insurance company or government agency could pursue one or more legal actions to recover the money. In some cases, they could obtain a personal judgment against you for the subrogation claims. 

Can You Negotiate the Payoff of a Subrogation Claim?

In most cases, your health insurance provider receives notice that your medical expenses are related to a personal injury claim. The company sends you a letter notifying you of its subrogation rights. Furthermore, a lawyer has a duty to pay subrogation claims from personal injury settlements before disbursing settlement funds to you. 

A skilled New York City accident lawyer negotiates with your health insurance provider to lower the payoff of subrogation claims. Your insurance company is not required to negotiate or accept a lower amount to pay off a subrogation claim. 

However, your attorney might be able to convince the company to accept a lower amount. For example, let’s assume that the liability insurance company pays the full insurance policy limits to settle a car accident claim. You also receive money from your underinsured motorist insurance coverage.

Unfortunately, the amount is insufficient to compensate you fully for all damages. After discussing the chances of recovering money after pursuing a personal injury lawsuit, you decide filing a lawsuit is not worth the expense and time.

Your attorney points out to the insurance company that the settlement is insufficient to pay all damages in full. Therefore, the lawyer proposes paying a percentage of the subrogation amount to settle the claim. 

Experienced New York personal injury lawyers understand how to develop compelling arguments why the health insurance company should accept a lower payment to resolve their subrogation rights. It might take longer to settle your personal injury claim, but the extra time spent negotiating subrogation claims could put more money in your pocket. 

How Can You Protect Your Rights Regarding Subrogation Claims?

Keep detailed records of all amounts your health insurance company pays for medical bills. You should receive monthly or quarterly statements from your health insurance provider.

The statements provide a detailed accounting of the bills that were paid and the amounts of each payment. Your attorney compares these records to the subrogation claims to ensure the insurance company has not overestimated the amount it paid. 

Call for a Free Consultation With a New York City Personal Injury Lawyer

Our lawyers at Rosenbaum Personal Injury Lawyers can fight to recover the maximum compensation for your personal injury claim. We can also utilize various strategies for reducing medical liens and subrogation claims. Contact our law firm to schedule a free case evaluation with a New York personal injury attorney at (212) 514-5007