Health Insurance Subrogation: How It Works

The majority of health insurance policies include provisions for a process called subrogation. This grants the insurer legal rights to "stand in the shoes" of the policyholder and pursue third parties liable for medical damages they covered initially. For example, if you are injured in a rideshare accident and rack up $15,000 in hospital bills paid by your health insurance, they may seek repayment from any settlement you later get from the rideshare company or negligent driver.

Methods of Subrogation:

1. Right of Reimbursement - The insurer demands direct repayment of covered medical costs from any settlement you receive.

2. Right to Subrogation - The insurer directly pursues the at-fault party for reimbursement of medical payments made.

In Florida, health insurers cannot seek double recovery of medical expenses from both you and the at-fault party. However, reimbursement claims, when aggressively pursued against injury victims, can drastically reduce rightful compensation.

Now Medicare and Medicaid operate a bit differently. If either government health plan paid your injury-related treatment bills, federal law requires reimbursement assuming you also receive a liability settlement. In 2022, the Supreme Court found that Florida Medicaid was permitted reimbursement from a settlement, according to Optum. They are stricter compared to private health insurers when it comes to waiving subrogation. The good news is that your attorney can still negotiate Medicare and Medicaid reimbursement balances down to smaller reasonable amounts under the right scenarios.

Protecting Your Injury Settlement

Luckily, as an injury victim in Florida, you have certain legal protections:

1. Made Whole Doctrine - Insurers cannot seek reimbursement unless you have been "made whole" by the settlement, or fully compensated for the entire loss suffered including pain/suffering.

2. Common Fund Doctrine - If the insurer benefits from you securing a settlement fund, they may share proportionally in attorney fees you paid to obtain it.

In my experience, by utilizing these protections, health insurers can be convinced to waive, reduce, or negotiate fair reimbursement from settlements without harming my clients' financial recovery.

Strategies to Protect Your Settlement

Over the years, I've discovered effective strategies to protect injury victims when health insurers come seeking repayment. Here are a few I've used successfully that you may find helpful:

1. Review Policy Terms - Health insurance policies vary greatly on subrogation rights, so review your plan details carefully at the outset of your injury claim.

2. Promptly Notify Insurer - Once hired, I immediately notify applicable health carriers of the injury claim and settlement pursuit to open communications. Delayed notification can weaken your negotiating stance later when reimbursement is sought.

3. Dispute Liability - Argue that the at-fault party disputes legal liability for the accident that caused injuries. This may deter insurers from aggressively pursuing currently nonexistent funds.

4. Dispute Made Whole Status - Detail pain and suffering, lost wages, and all damages making up your entire loss. Argue these outstanding damages prove you have not been "made whole" by the current settlement amount.

5. Insurer Shared Costs - Document all attorney fees and associated costs needed to secure the settlement from which the insurer may now benefit. Demand proportionate reimbursement per Common Fund rules.

Conclusion

By expertly utilizing these Florida law provisions and other negotiation tactics, a personal injury attorney can successfully have health insurance reimbursement claims reduced, waived, or settled while still maximizing injury compensation for clients. Every accident case has unique factors, but this provides a general overview of what steps may help protect your interests when resolving personal injury claims.

Source

• https://www.uhccommunityandstate.com/content/owca/owca/en/insights/blog/medicare-insights-blog/2022/supreme-court-permits-florida-medicaid-to-seek-reimbursement.html

"The information provided herein is simply a brief overview of the Florida law on this particular matter. It should not be relied upon for legal purposes, as the facts and circumstances to any specific legal matter may vary substantially from the limited explanation and application of often complicated legal rules and principles that may be addressed herein, or applicable in your particular legal matter. You should only rely upon legal advice provided to you by a licensed attorney who has had an opportunity to fully evaluate your particular legal matter".