When an individual is injured as the result of the negligence of someone else, whether by way of medical negligence, a car accident or otherwise, the insurer that pays that individual’s medical bills almost always has what’s called a “right of subrogation.” What the subrogation provisions in most insurance policies states is that if you recover money from the negligent third-party in a lawsuit or some other type of personal injury settlement, you have an obligation to reimburse the insurance company for the medical bills and expenses that it paid on your behalf for your care and treatment related to the injuries.
As you might imagine, the insurer’s right of subrogation can create a significant obstacle to settling your Maryland personal injury or medical malpractice lawsuit. Because the medical bills (and consequently the lien) often are extremely high, they can come close to wiping out any funds which would have been available to the injured plaintiff, leaving the injured plaintiff with next to nothing from his or her personal injury settlement.
Experienced personal injury and medical malpractice lawyers know that the keys to dealing with the issue of medical liens are to confront it head-on early in the litigation and to stay on top of it as the litigation proceeds. It is important that your personal injury or medical malpractice lawyer keep the lien in mind when making almost all decisions relating to the litigation, especially decisions regarding how much expense the case can afford to carry in relation to the case’s realistic value when judged in relation to the need to satisfy the lien at the time of settlement. Incurring too much expense in relation to a case’s value can seriously harm the injured plaintiff’s chances of walking away with money from a settlement when there is a large medical lien in play.
Finally, it is worth noting that the type and extent of an insurer’s subrogation right varies from insurer to insurer. Many insurers, including some private insurers and Medicare, will reduce the lien by what’s called “procurement costs.” That means that they will reduce it in proportion to the amount of attorneys’ fees and case expenses that the client had to incur in order to obtain the recovery. Other insurers will reduce even further than that if your personal injury or medical malpractice lawyer can present a compelling reason why the circumstances warrant such a reduction. Others, such as ERISA-based insurance plans, generally will not reduce the liens at all.