Subrogation in Personal Injury Cases Explained

Subrogation is a legal concept that allows your health insurance company to recover the money they paid for your medical treatment from your personal injury settlement. Understanding subrogation is important because it directly affects how much money you take home from your settlement.

How Subrogation Works

After an accident, your health insurance pays for your medical treatment. When you receive a settlement from the at-fault party, your health insurer has a right to be reimbursed for the medical expenses they paid. This reimbursement is called subrogation.

For example, if your health insurance paid $30,000 in medical bills and your settlement is $100,000, your health insurer may claim $30,000 from your settlement through subrogation.

Types of Subrogation Liens

Health insurance liens from private health insurers. Medicare liens from the federal government. Medicaid liens from state governments. ERISA liens from employer-sponsored health plans. Workers compensation liens.

How to Reduce Subrogation Liens

Your attorney can often negotiate subrogation liens down, increasing your net recovery. Common strategies include arguing the made whole doctrine, which requires that you be fully compensated before the insurer can recover. Negotiating a reduction based on the common fund doctrine, which requires the insurer to pay a share of attorney fees. Challenging the validity of the lien based on state law.

Conclusion

Subrogation liens can significantly reduce your net settlement. Work with your attorney to minimize these liens and maximize your take-home amount.

Use our free settlement calculator to estimate what your case might be worth.