Medical bills are subtracted. Not sure what you mean by "PIP", but upon settlement, your attorney should negotiate with the medical providers or your health benefit agency (ie Medicare, Kaiser, Doctors on lien, etc) to reduce their bills and subsequently send them a check for the negotiated amount. If medical providers get a wind of a personal injury suit, they will likely place a lien on your case and wait for a settlement for reimbursement. You will ultimately be responsible for the amount if you don't pay off your medicals. Good luck.
Edward Ramsey, Esq.
8889 W. Olympic Blvd - Penthouse
Beverly Hills, CA 90211
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The settlement most likely is global. This means that they are paying you a certain sum and that sum is to cover ALL damages that are claimed to have come from the accident. If there are liens, then they may have notified the third party and might have been paid our of the recovery with a separate check, but you should have been aware of that. Any other reimbursement rights, held by health care providers via contracts with you (i.e., your insurance policy) would be your responsibility.
Before agreeing to resolve any claim with the responsible party, you need to consider all obligations you may have. This is one of the many reasons why it is important to consult with an attorney prior to negotiating an agreement. At the very least, take advantage of a free consultation and then decide whether you think it makes sense to retain the attorney.
This response applies to California Law only and does not create any legal relationship between the attorney and the person who submitted the question.
Personal injury settlements typically includes both medical bills and pain and suffering (also wage loss if you have some). In your example above, the 40k would likely include all aspects of your injury claim, including medical bills. If you used PIP or medpay to pay for some of your medical bills, they will likely want to be reimbursed (unless it's AAA). If you have an attorney, they can negotiate how much you pay back for your medical liens.
I agree with Mr. Padilla. What it also sounds like you might be asking is whether your attorney gets paid before or after your medical bills are paid. If that is your concern, look to your fee agreement with your lawyer. This however would be a rather unusual arrangement as the majority of Personal Injury attorneys get paid from the gross settlement (off the top) and not the net (after medical bills). I only throw this out there because I do get this question asked with some regularity despite the fact that my fee agreement is very clear.
For the most part, settlements are considered global, meaning they include everything (medical bills, pain and suffering, lost wages and attorneys' fees if you have an attorney). If PIP has paid for the medical bills, you must check with the company to see if they are requesting a reimbursement. What we have found is that PIP is rarely reimbursable, but I would definitely check with them before agreeing to a settlement.
I agree with Mr. Padilla that you should take advantage of a free consultation with an attorney to make sure that you are not settling your case for less then it is worth. Studies have shown that cases settled by attorneys can be as much as 3 times higher then those settled without an attorney. This might not apply in your case, but I believe it is worth your time to at least run it by an attorney.
This answer is meant to be for informational purposes only and does not create an attorney-client relationship.
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