Written by attorney Samuel Cohen

Pennsylvania Subrogation and Liens- the hidden danger

Many people who decide to go it alone without an attorney find themselves receiving a letter after they have settled their case and signed a release that some entity is seeking to recover money from their settlement. Subrogation is a concept by which a company that provides monetary benefit to an individual that can be recovered in a lawsuit seeks to get its money back. Two examples are good illustrations of this.

A person is receiving benefits from Medicare which pays $10,000.00 to health care providers for medical treatment to a beneficiary for medical bills incurred as a result of a fall. The beneficiary makes a claim to the party responsible (e.g. Walmart). Part of the sum recoverable in such a claim is medical expenses. The beneficiary is not getting bills because Medicare paid the expenses. The beneficiary does not hire a lawyer and settles the casr on his/her own for $20,000.00, signs a release, and negotiates the settlement check. A week later, the beneficiary gets a letter from Medicare demanding reimbursement of the $10,000.00 it laid out for treatment. Under this scenario, Medicare could be entitled to as much as $10,000.00 from the beneficiary to recoup the money it paid. If the beneficiary fails or refuses to pay, Medicare can go after the beneficiary for the full amount in federal court and seek penalties from the beneficiary.

A second example involves a person injured in an auto accident while on the job. S/he receives $5,000.00 in medical expense reimbursement from the worker's compensation carrier and $10,000.00 in indemnity (wage loss benefits). The injured person settles the case for $15,000.00 Under this scenario, the workers comp carrier could take the entire settlement.

This guide is not exhaustive. Subrogation and liens are very complicated and many, many cases have them. This is just another reason why consulting with a qualified personal injury attorney is so important. Do not allow yourself to get injured a second time. What you don't know CAN hurt you!

The information provided is for general informational purposes only and is not intended to be legal advice. I am only licensed in the Commonwealth of Pennsylvania and I am not providing you with specific legal advice. The law changes frequently and varies from jurisdiction to jurisdiction. Being general in nature, the information provided may not apply to any specific factual and/or legal set of circumstances and/or the jurisdiction where you reside. No attorney-client relationship is formed nor should any such relationship be implied. The information provided is of a general nature is not intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction. Your question, although you may believe is simple, it is not simple. You require legal advice, please consult with a competent attorney licensed to practice in your jurisdiction.

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