Hello. My daughter and I were involved in an accident while waiting at a stop light in January, 2015. We were struck by a car who had crashed into a police officer, and the officer then struck us. I obtained a lawyer, and received a settlement for the accident in June, 2016. I just received a letter from a third party billing company from my medical insurance company stating that they never received a payment for me and my daughter's medical treatments. I called my lawyer and he said that I am responsible for paying them. My question is, wasn't that supposed to be paid before I received my settlement? I thought my PIP covered this. My physical therapist informed me each time I went for therapist of how many treatments I had left before I had be pay out of pocket. Can they do this? And how can I fight this myself without a lawyer?
Your settlement is based upon economic damages... and that includes what insurance paid on your behalf. The theory being you're not entitled to recover for medical expenses you didn't pay for out of pocket, else it amounts to a double recovery.
Most insurers will subrogate claims. I always tell my clients insurance can seek reimbursement for claims paid on your behalf. A lawyer is not obligated to notify your insurance company of a settlement -- that's your responsibility. Some insurers do t pursue subrogation liens, some do. The only responsibility an attorney has with respect to liens is to report claims to Medicare/Medicaid and those are to be paid first.
You are responsible for the subrogation liens, and chances are you can negotiate them to a lower amount.
DISCLAIMER: Brandy A. Peeples is licensed to practice law in the State of Maryland. This answer is being provided for informational purposes only and the laws of your jurisdiction may differ. This answer based on general legal principles and is not intended for the purpose of providing specific legal advice or opinions. Under no circumstances does this answer constitute the establishment of an attorney-client relationship. For legal advice relating to your specific situation, I strongly urge you to consult with an attorney in your area. NO COMMUNICATIONS WITH ME ARE TO BE CONSTRUED AS ARISING FROM AN ATTORNEY-CLIENT RELATIONSHIP AND NO ATTORNEY-CLIENT RELATIONSHIP WILL BE ESTABLISHED WITH ME UNLESS I HAVE EXPRESSLY AGREED TO UNDERTAKE YOUR REPRESENTATION, WHICH INCLUDES THE EXECUTION OF A WRITTEN AGREEMENT OF RETAINER.
This is not a simple issue. It depends entirely on whether you health insurance is through your employer or whether you purchased it on your own as an individual or with your family through an exchange. It also depends on whether it is Medicaid, Medicare or a Managed Care Organization lien. It is likely that if your health insurance was purchased through your employer, ERISA, a federal law applies and you may not have to pay it back depending on the circumstances, which are not contained in your question. You will need a lawyer to ask you the appropriate questions to answer this correctly.
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Your settlement was supposed to include payment for special damages that includes medical expenses, so this may be difficult if not impossible to fight effectively.
Regarding PIP, PIP only covers as much as the PIP limits are. So if you are covered up to $10,000 in PIP, it can only cover $10,000. So you may want to check to see if you exhausted your PIP with regard to that claim. If you had Medicaid or Medicare, there are laws that cover how much those entities can recover which can really help, especially when it comes to Medicaid. But as everyone else is saying, if it is another health insurer, you do owe that company anything they covered for your treatment. This is why in MD we have what is called the "collateral source rule". It basically says that when a Court considers what your damages are, a Plaintiff can include his/her TOTAL medical bills even though that person may have only paid a small portion in reality. So a judge or jury would hear that your medical bills are $60,000, even though you may have only paid $2,000. So insurance companies, in return, are given the right to subrogate and recover what they paid. Your attorney made a smart decision NOT notifiying the health insurance company in your case (as long as it wasn't Medicare or Medicaid), because it is the health insurance company's obligation to proactively assert a lien. Many insurance companies forget to do this, so an attorney would never tell the insurance company to come get their money from their clients settlement. That would not be in the client's best interest. Some health insurers never remember and the client walks away with far more. The lawyer should certainly have informed you that a subrogation lien was possible, however. And hopefully he/she did. Your best bet is to try to negotiate the lien at this point. My argument to the health insurere and/or subrogation firm would be, the lawyer did the work to recover the health insurance company's money for them. If you hadn't settled your case, your health insurance would have just paid for your injuries and never seen a dime. So, since you paid the attorney, likely, 1/3 then ask the subrogation firm to reduce your lien by 1/3. Good luck!
Call your insurance adjuster and ask for details of what was paid out under your PIP coverage. If you have PIP bebefits left for this claim that we're not paid out, confirm whether they will still pay you the benefits to cover all or part of your health care lien. If your PIP benefits were exhausted, and the health insurance covered the balance, then legally you owe the lien. Normally your should have handled all the PIP and lien issues prior to disbursing the settlement, but obviously he did not do that here. If your health insurance is an ERISA plan (if you do not know, you need to ask), then you need to find out from them if they will agree to reduce their lien by the same percentage you paid in attorneys fees and costs (e.g., 33-1/3%, or whatever it was). Many employer based health plans are ERISA plans and are authorized by federal law to include a provision that prevents reduction of their lien for proportionate legal fees and costs incurred. they must provide you with a copy of that provision if they do. If not, or if they are not an ERISA plan, then under Maryland law the insurer must reduce their lien by at least 25% (but you can ask for more) if you had to pay a lawyer a fee out of your settlement. Again, all of this is typically handled by your lawyer. All liens are negotiable. Don't just pay it.
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