After you’ve been injured by an accident, the first party to pay your bills is generally your health insurance provider, if you have one. But your health insurance provider isn’t liable for injuries caused by another party’s negligence. The negligent party is responsible for paying for those.
Thus, if your insurance company pays a portion of your expenses while you are in the hospital, you can expect that a portion of your personal injury settlement will go back to the health insurance company. Your medical bills are still being paid…just not to the hospital.
This process is known as subrogation, and it frustrates many injury victims.
Here’s another way to look at it: New York injury law doesn’t allow you to “double-dip.” You don’t get to have your medical bills paid by the at-fault party’s insurance company and your own insurance company, so you get to pocket the difference. Instead, you pocket whatever is left after all of your medical bills are paid out to the appropriate party and whatever is left after your legal expenses and fees are paid for.
Fortunately, only a portion of your settlement is devoted to actual hospital bill losses. The rest is devoted to lost wages, pain, suffering, and other expenses. A subrogation is never going to wipe out your whole settlement.
Though it may not seem fair, the subrogation process is actually a good thing. It makes health insurers willing to pay out hospital bills so that you’re not hounded by hospital bill collectors the entire time you’re attempting to pursue a personal injury settlement. While they can’t put a lien on your property in New York, they can get quite persistent and bothersome. Pursuing a settlement can take 18 months or longer, and hospitals want to get paid immediately.
If debt collectors hound you, you can also pass them straight on to us as your lawyers, but they’re still unpleasant to deal with.
In addition, New York has a “made whole” rule. If the person who caused the accident has inadequate insurance to pay for the entirety of the accident, then the insurer can’t recover any of your proceeds. This was established in the 1998 case Berry vs. St. Peter’s Hospital.
Berry was a malpractice wrongful death case. Berry’s wife brought the suit after her medical malpractice killed her husband. Berry was insured under his health insurance plan and his wife’s. Each insurer paid out $1.75 million and $1.8 million for Berry’s medical expenses. They both demanded repayment out of Mrs. Berry’s settlement. The amount the malpractice insurance company was willing to pay, up to its policy limits, was far smaller than the amount of damages that Mrs. Berry could have recovered at trial. The two medical insurance companies wanted to take even that little bit away from Mrs. Berry, and the courts prevented them from doing so on the grounds that she, as the insured, had not been “made whole.”
These sorts of issues are the complex and difficult issues that come up during personal injury cases all the time and are good reasons why it is important to have a personal injury lawyer by your side throughout the process. If you’ve been injured in an accident, don’t hesitate. Call us to get help today.
