What is surrogacy and how does it affect personal injury settlements?
When a personal injury claim goes to court for trial, compensation can be recovered, either through a settlement or a verdict. This monetary settlement is intended to cover damages and losses associated with the victim’s injuries and their subsequent recovery. In cases of egregious negligence or serious injury, additional compensation for pain and suffering may be awarded.
Although the victim’s settlement is recovered, there are also parts owed to other parties. In almost all cases, a portion of the settlement is paid to the law firm representing you, as most personal injury practices operate on contingency fees. This means that they do not charge attorneys’ fees unless they prevail for their clients.
However, there are some cases where the victim’s private health insurance company requires reimbursement of money paid for their medical care after an accident. This refund process is known as surrogacy, which has the potential to impact the victim’s personal injury reward in a significant way. Read on to learn more about surrogacy and what to expect with your pending personal injury claim.
Surrogacy companies and health insurance
Surrogacy is an active process within various health insurance companies, both private and government. This includes private providers like Anthem Blue Cross and Blue Shield, as well as government organizations like Medicaid and Medicare. Regardless of insurance companies, surrogacy can also apply to hospitals. In addition, government entities that are owed a refund can criminally penalize both the representative attorney and his client if such payments are not made after a verdict or settlement in favor of the client.
Identification of subrogation clauses in your policy
It is important to know if your particular health insurance policy contains subrogation rights. To do this, pay close attention when reading your health insurance policy contract. In exchange for a monthly premium, your health insurance company will pay for your medical expenses and bills that exceed your deductible.
However, many policies also contain a paragraph that discusses reimbursement for paid medical expenses and bills in the event that a member uses the amount of medical bills as the basis for a claim and subsequently collects reimbursement from a third party. . This would be a subrogation clause.
An insurance company generally alerts the victim’s attorney with a surrogacy lien or letter of claim, which provides an accurate outline detailing the medical payments they claim as a surrogacy interest. Some states support a “common fund” doctrine that essentially requires insurance companies to reduce their subrogation interest by the amount of fees paid by the victim to the attorney. This is known as a “prorated” payment, and not all states endorse this principle.
Talk to your lawyer
If you are considering filing a personal injury claim, or are currently awaiting a pending lawsuit, it is important to discuss all of your questions and concerns with your trusted personal injury attorney. They can guide you through the legal process from start to finish and educate you on the details and likely outcomes of your case.