If you have a personal injury case, you might have to pay back your health insurance company for the medical bills they covered. This is due to Illinois law, which allows for healthcare subrogation. Healthcare subrogation means that health insurance companies have the legal right to be reimbursed from a personal injury settlement for the money they spent on your medical care. The terms will be dictated by your particular policy of insurance. It is always best to deal with the possibility of subrogation head-on, without waiting for a nasty surprise later on.
Unlike auto insurance companies, which might go after the person responsible for the accident, your health insurance company will usually place a lien on your injury case. This means that before you receive your full settlement, the health insurance company gets repaid for what they covered. The idea is simple: if you receive money from a personal injury case that includes medical expenses, but your health insurance already paid those bills, they should be reimbursed so that you don’t get a double recovery.
What Is a Lien in a Personal Injury Case?
A lien is a legal claim placed on your settlement by a third party, such as a health insurance company, a hospital, or a medical provider. This means that before you receive the full amount of your settlement, any outstanding liens must be paid. Liens are common in personal injury cases because various entities often have a financial stake in your personal injury case. This includes doctors and hospitals who have not been paid, insurance companies who made payments earlier in the case, and even Medicare or Medicaid.
Do I Have to Pay Back the Full Medical Bill in My Injury Case?
No, you only have to pay back what your health insurance actually paid for your medical care, not the original full bill. Health insurance companies negotiate discounted rates with medical providers. For example, if a doctor’s bill is $300, but the insurance company has a contract that lowers the cost to $175, then the insurance company only paid out $175. If subrogation applies, you will only have to reimburse that $175, not the full $300. This prevents you from paying more than what was covered by your insurance.
Will My Lawyer Help Lower the Amount I Have to Pay Back?
Yes, your attorney will work to reduce the amount you owe to the health insurance company. You hired a lawyer to pursue the at-fault drive and without your legal action, the insurance company wouldn’t recover anything. It stands to reason that they should not be reimbursed in full without factoring in your legal fees. The “common fund doctrine” is a legal rule that requires health insurance companies to reduce what they can get paid back, to account for the fact that you had to hire a lawyer to win your case. Your attorney will ensure that the health insurance company follows this rule.
There is an exception to this rule: if your health insurance plan is governed by ERISA, a federal law, you might have to pay back the full amount. ERISA plans are common with large employers and can have stricter repayment rules. Your lawyer will check your plan to see if this applies to you and explore options to minimize the amount you owe. Even if you have an ERISA plan, we will still ask for a reduction in order to put more money in your pocket at the end of the case.
In addition, your lawyer will make sure that you only pay back the insurance company for medical bills related to your accident. Sometimes, insurance companies try to get reimbursed for treatments that weren’t connected to your injury case. Your attorney at O’Connor Cadiz Accident and Injury Law will do everything possible to prevent that from happening.
What About Other Types of Insurance?
While health insurance is the most common type of insurance that requires reimbursement, other types of insurance may also come into play in a personal injury case. For example:
- Medicare and Medicaid: If you are covered by Medicare or Medicaid, they also have a right to be reimbursed from your settlement. The process for repaying Medicare and Medicaid is different from private insurance companies, and your lawyer will ensure compliance with these requirements.
- Workers’ Compensation Insurance: If your injury occurred at work, your medical bills may be covered by workers’ compensation insurance. In some cases, workers’ comp insurers have a right to be reimbursed from a personal injury settlement.
- Medical Payment Coverage (MedPay) from Auto Insurance: If you have MedPay as part of your auto insurance policy, it may cover your medical expenses upfront. Some MedPay policies do not require reimbursement, while others do. Your lawyer will review your policy to determine if you need to pay back any funds.
Examples of Subrogation in Illinois Accident cases
Subrogation plays a significant role in many personal injury cases in Illinois. Here are a few specific examples:
- Car Accident Injury in Chicago – Suppose you are injured in a car accident on the Kennedy Expressway. You receive treatment at Northwestern Memorial Hospital, and your health insurance, through Blue Cross Blue Shield of Illinois, covers your medical expenses. Later, you win a settlement against the at-fault driver. Under Illinois law, Blue Cross Blue Shield has the right to seek reimbursement for the payments they made on your behalf. If Northwestern Hospital still has an outstanding bill, perhaps for the portion of your bill that was not paid by Blue Cross, they might also file a lien. (This is called a Hospital Lien, a healthcare lien). If your own car insurance company made payments to a place like ATI Physical Therapy under your Med Pay coverage, your own car insurance will want to be paid back (This is called a Med Pay Lien).
- Slip and Fall in Naperville – Imagine you slip and fall on a wet floor in a grocery store in Naperville, leading to a broken arm. You undergo surgery at Edward Hospital, and your health insurance provider pays for your medical bills. When you later receive a settlement from the grocery store’s insurance company, your health insurance provider may file a subrogation claim to recover what they paid.
- Car Accident in Schaumburg – You are involved in a rear-end collision at the corner of Golf Rd and Higgins in Schaumburg. You suffer whiplash and back injuries, requiring treatment at Amita Health Alexian Brothers Medical Center. Your health insurance covers the cost of physical therapy and doctor visits. When you later settle your claim with the at-fault driver’s insurance, your health insurer requests reimbursement under Illinois subrogation laws.
- Pedestrian Accident in Aurora – If you are hit by a car while crossing the street in Aurora and sustain serious injuries, your health insurance might pay for emergency room treatment at Rush Copley Medical Center. Later, when you secure a settlement from the at-fault driver’s insurance, your health insurer can request reimbursement under Illinois subrogation laws.
What Happens If I Ignore My Health Insurance Company’s Lien?
Ignoring a lien from your health insurance company can lead to serious consequences. If you don’t pay back the amount they are owed, they may take legal action against you after your case is closed and once it is too late to have your lawyer negotiate with them. It’s always best to work with an attorney to resolve any liens before finalizing your settlement.
Final Thoughts
If you’ve been injured in an accident that wasn’t your fault, don’t let worries about repaying your health insurance stop you from getting the medical care you need. The financial aspects of your case can be complicated, but that’s what attorneys are here for. Your main priority should be your health and recovery. Let a lawyer handle the details of medical bill repayment and insurance reimbursement so you don’t have to stress about it.
At our law firm, we guide our clients through the entire personal injury process, including dealing with medical bills and insurance companies. We also provide written materials in our client handbook to help you understand how medical bills work in a personal injury case.
If you have questions about medical bills after a car accident or need representation, call us at 630-250-8813 (Elgin) or 847 631-6125 (Schaumburg). Let us handle the legal side of things so you can focus on healing and getting back to your life.