Celebrating 10 years! 2007-2017

Personal Injury Settlement Q

Bankruptcy lawyer so this is out of my comfort zone.... Whe joe1234502/12/17
Forget the $25k ever existed, it's a figment of the hospital dingbat02/12/17
"Actual cost" might be the rule, but I have to wonder whethe jeffm02/12/17
Agree with Jeffm that the 25k is a viable number in some jur karlfarbman02/14/17
it is in mine. Collateral source is law in my state so it d jackiechiles02/14/17
You have to find out if any of the medical providers have li parlance02/12/17
"So do I need to contact his provider to see what amounts th jeffm02/12/17
Ask for the full 25k. There is litigation going on in vario jd4hire02/13/17
Appreciate all the help. No liens as of now but I have the joe1234502/13/17
joe12345 (Feb 12, 2017 - 9:24 pm)

Bankruptcy lawyer so this is out of my comfort zone....
When settling a small vehicle accident, do you communicate with the insurance provider to determine subrogation amounts?

Background: client was rear ended. His insurer paid his medical. He is now settling with the insurance company of the woman who hit him.

So do I need to contact his provider to see what amounts they would want reimbursed for BEFORE settlement or am I to assume it is roughly the amount they actually paid?

Total bills ~ $25K and his provider paid ended up paying ~ 1/3 of that.

Does he ask for the amount they ended up paying + his economic losses + pain/suffering, etc. OR does he ask for the full 25K + economic losses, etc. Since no one actually paid the 25k amounts I assume that he uses the amount his provider actually negotiated that down to?


Thanks for any direction.

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dingbat (Feb 12, 2017 - 10:20 pm)

Forget the $25k ever existed, it's a figment of the hospital's imagination. You can't get reimbursed for expenses that were never incurred. Your client is only entitled to the actual cost of the damages + missed earnings + pain & suffering, yada yada.
Your starting point is to take the actual cost of medical expenses + hourly wages * hours not worked (or an approximation) + a reasonably high value for pain & suffering + whatever else you can throw in. Then try to get as close to that magic number as you can.


Just to be clear, I'm assuming that the total amount paid to the various medical providers was 1/3rd of the $25k (because the amount billed by a hospital is a fictional number that no one ever pays in full)

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jeffm (Feb 12, 2017 - 10:51 pm)

"Actual cost" might be the rule, but I have to wonder whether OP is in a jurisdiction (if any still exist) which recognizes the "collateral source/benefit rule."

https://www.linkedin.com/pulse/medical-expenses-collateral-source-rule-andrew-desimone

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karlfarbman (Feb 14, 2017 - 8:52 am)

Agree with Jeffm that the 25k is a viable number in some jurisdictions.

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jackiechiles (Feb 14, 2017 - 9:01 am)

it is in mine. Collateral source is law in my state so it doesn't matter what the insurance company paid, only what the hospital's inflated bills are.

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parlance (Feb 12, 2017 - 10:31 pm)

You have to find out if any of the medical providers have liens. If they do, that's a factor in how far down you're willing to go.

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jeffm (Feb 12, 2017 - 11:11 pm)

"So do I need to contact his provider to see what amounts they would want reimbursed for BEFORE settlement or am I to assume it is roughly the amount they actually paid?"

If you'd be happy paying the full amount of subrogation owed the carrier, then I suppose you shouldn't have to contact the carrier before settling. Just settle and cut a check. Just be sure you are confident with your belief as to the amount actually owed.

If you need to see if the carrier will accept less in order to make the settlement come to fruition, then, that answers your question.

You might be in a state that follows the "equitable subrogation doctrine," which balances the interests of the injured plaintiff and his carrier when the amount recovered is not sufficient to make both parties whole. For example, assume Plaintiff recovers policy limits of $100k in a case where he lost his leg and had $150k in medicals. Should the $100k go all to the carrier for reimbursement toward the medical bills? This doctrine has also been called the "made whole doctrine."

The "made whole doctrine" can be modified and limited, so look for that possibility. Texas has a limited "made whole doctrine." Our courts hold that equitable doctrines come into play only when there is no express contract providing the answer. If the carrier has a contract with the insured providing that the carrier has first rights to all sums recovered by the insured until it is fully subrogated, then that is what the courts must do. So, if this is the rule in your jurisdiction, you will want to see the policy terms to find out what it says about subrogation rights.

I think some jurisdictions are imposing liability on attorneys who collect settlements and don't satisfy 3rd parties out of them. If you are in one, be careful. You can check the public records of the county clerk (or other registrar) for any medical liens filed of record.

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jd4hire (Feb 13, 2017 - 2:50 pm)

Ask for the full 25k. There is litigation going on in various jurisdictions on this issue right now. The issues were hastened with ACA and reimbursed rates being much less than what was actually billed and the fact that the "collateral source" rationale is lessened when someone receives subsidies to pay for the collateral source. I practice in a collateral source state and what was billed is all that anyone pays attention to.

Whenever I have plaintiff's work, I contact providers before hand to see what they can do on their bill. Depends on the provider, but many will cut 1/3rd off their bill. They are willing to do that so they get paid in one lump sum straight from one check.

If you and your client don't have notice of a lien, I don't think there are issues with you settling the case and not satisfying third parties. But the 3rd parties then have the ability to pursue your client for bills owed. In that scenario, the providers won't take a haircut on their bill and dependent upon the expenses, they'll sue.

Here, you are talking about a carrier though and I'm guessing they provided notice of a lien to you as to what they paid out on med pay. They will want what they paid, but you should demand what was billed from tortfeasor's carrier.

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joe12345 (Feb 13, 2017 - 3:57 pm)

Appreciate all the help. No liens as of now but I have the bills from hospital showing what Blue Cross ended up paying versus total bill. I'm trying to get in touch with their provider to see what they would give me exact amounts they want reimbbursed. State is Alabama. Thanks guys.

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