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Why do I have to pay my health insurance company out of my settlement? Subrogation and Liens

If you have received medical treatment after being in a car wreck or being injured in another type of accident, you may have received a letter from your health insurance company asking you questions about the accident or claiming a “subrogation” interest. Or you may have received a letter from the hospital giving you notice that a “hospital lien” has been filed. Or you might have received a letter from the Center for Medicare Services talking about the Medicare Secondary Payer Act and something called “conditional payments.”

This is a familiar story for those of us who represent people injured through the fault of others. The law says that if you are injured due to the negligence or fault of another-whether it is in a car wreck, a defective product, or a dangerous condition at someone’s business or home-you are entitled to have the at-fault party respond to you in damages for your medical bills, your lost earnings, pain and suffering, physical impairment, and other losses. However, unless you paid your medical bills out of your own pocket, a hospital, an insurance company, or even the government may have a claim on some of those damages.

These claims-sometimes called a “subrogation interest” or “right of reimbursement,” and sometimes called a “lien”-can be created by a contract or by a law. For example, most health insurance policies include a subrogation and reimbursement clause allowing it to be reimbursed for anything it spent treating your injuries out of your personal injury settlement. Another example is a statute-Chapter 55 of the Texas Property Code-allowing hospitals providing emergency treatment to you to file a “lien” with the county clerk giving it the right to be paid out of any settlement arising from that injury. There is also the Medicare Secondary Payer Act, a federal law providing that Medicare is secondary to all other sources of payment for a beneficiary’s care-including a personal injury settlement-and that any payment made by Medicare where there is another source of payment is “conditional” and must be paid back.

The law regarding these and other types of liens or subrogation interests is complicated, and you may not know about some of your rights in dealing with the insurance company, the hospital, or Medicare. For example, a Texas law limits insurance companies subrogation rights, and hospital liens are only valid if the hospital takes certain specific procedural steps. In addition to helping you get a settlement or a jury verdict for your injuries, one service a personal injury attorney provides is dealing with these liens and subrogation interests-negotiating with the health insurance company, the hospital, or Medicare and enforcing your rights.

If you have been injured due to the fault of another or if you are injured on the job and learn that your employer is a nonsubscriber, you need to contact a personal injury attorney to discuss your rights. Call the law firm of Abraham, Watkins, Nichols, Agosto, Aziz & Stogner today at 713-396-3964 or 800-594-4884 for your free consultation.

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