How does health insurance subrogation impact your motorcycle injury case?

Subrogation is a term most have never heard unless they have been involved in an injury case after a motorcycle or car crash. Subrogation is the right of a third party (for example, a health insurance or short term disability carrier) to recover the debt or damages of another. In motorcycle injury cases, your health insurance company has a right of subrogation to recover the money it has paid for your medical treatment.

This may seem complicated, but it is actually quite simple to understand. Here is the most common example…

Mr. Jones is involved in a motorcycle crash that was not his fault and is injured as a result. Fortunately, Mr. Jones has health insurance through his employer that pays for all of his crash-related treatment, whether it be a visit to the hospital, an orthopedic, a physical therapist or any other doctor or facility.

While he is treating for crash-related treatment, Mr. Jones hires Mr. Lawyer to pursue an injury case on his behalf and recover his damages. After Mr. Jones is done treating for his crash-related injuries and reaches maximum medical improvement, Mr. Lawyer sends a demand for payment of Mr. Jones’s damages to the at-fault driver’s automobile insurance carrier. Mr. Jones’s damages partly include the past medical expenses that he incurred as a result of the crash. Mr. Lawyer demands the full charges of the medical bills regardless of Mr. Jones’s co-pays or deductibles or what Mr. Jones’s health insurance company paid.

If the at-fault driver’s automobile insurance company agrees to pay Mr. Jones’s past medical expenses, Mr. Jones is going to receive the benefit of at-fault driver’s insurance company and his health insurance company paying the same medical bills. In other words, these medical bills would be paid twice by two different insurance companies. The law and, typically, the health insurance policy itself gives the health insurance company a right of subrogation or a right to pursue the recovery of the medical expenses that it paid for from the at-fault driver’s automobile insurance company. BUT! Mr. Lawyer and Mr. Jones already recovered these medical expenses for it. That does not mean that health insurance company does not have a right to be paid since Mr. Lawyer and Mr. Jones recovered these expenses… Mr. Jones’s health insurance company is still going to demand it be paid back for those medical bills.

Depending on the health insurance policy, there are situations where Mr. Lawyer may be able negotiate with Mr. Jones’s health insurance company to reduce the amount he has to reimburse his health insurance company from the automobile insurance settlement to maximize the amount Mr. Jones is left with after reimbursement.

The complexities of subrogation and reimbursement of health insurance companies is one of the many reasons it is important you have an experienced lawyer when pursuing an injury claim after a motorcycle or car crash. An experienced lawyer will know the ins-and-outs of the law of subrogation to maximize compensation to his client.