Personal Injury Settlement is Inclusive of Medical Bills

In regard to  personal injury settlements, most personal injury settlements are inclusive of the medical bills or medical liens.  So, if you are trying to resolve a claim from an automobile wreck without an attorney, you have to realize that any personal injury settlement includes all of your medical bills. However, for Kentucky car wrecks, one of the few exceptions is the medical bills paid by the Kentucky no-fault carrier.

Kentucky car wreck settlements are generally exclusive of the no-fault lien; which means that they do not include the bills paid by the no-fault carrier. In other words, the at-fault carrier will have to pay the no-fault carrier back for the medical bills paid on your behalf. It is called a subrogation claim.

So, when one of my clients signs a personal injury release, resolving their personal injury claim completely, the release will typically say “exclusive of the no-fault lien but inclusive of any and all other liens that may or could be asserted including by Medicaid and Medicare.”  Let me use an example to explain this and show the risks involved when liens are not dealt with in personal injury settlements.

Assume a client had $19,000 in medical bills ($9,000 Emergency Room bill and $10,000 from chiropractic treatment). The client’s insurance carrier is the no-fault carrier and assume they paid the chiropractor the full $10,000 in PIP or no-fault coverage.  The remaining $9,000 was paid by Medicaid, the client’s health insurance.

Medicaid, by contract, only had to pay $3,000 to satisfy the $9,000 Emergency Room bill.  By statute/law, Medicaid has a lien against any personal injury settlement received by my client.  Think of it this way, health insurance carriers will agree to pay your medical bills if you were injured in a car wreck but if you recover money from the car accident, they have the right to recover from you. This is called a subrogation claim or a right of reimbursement.

So, if the medical bills far exceed the available insurance coverage, a client can potentially benefit by having his/her health insurance pay the medical expenses and then address their lien out of the settlement.  Why? Because the health insurance carrier reduces the medical bills, by contract with a medical provider, and the health insurance carrier’s right of recovery is the amount they paid, not the amount of the medical bill.

However, the lien of the health insurance carrier must be addressed in the personal injury settlement. Otherwise, a client could be sued for that lien after the settlement was disbursed to them.  So, in the above example, a typical personal injury settlement might look like this:

 

SETTLEMENT SUMMARY

CLIENT:  Client                   DATE:             January 27, 2020

I, James D. Desmond, have been honored to serve as your attorney.  I hope you will keep me in mind for all your legal needs.  I am here to assist you whenever possible. In turn, please keep in mind that you are an essential part of this legal practice.  In short, if you were pleased with my services, I am relying on you to send your family and friends my way.  I will do my best to make sure that they are well taken care of.

Gross Settlement or Award:                                             $19,000

Attorney Fees                                                                        $6,327 (33.33% Attorney’s Fee)

Costs of Prosecution $Waived

NO CHARGES FOR FAXES, STAMPS, OR PHONE CALLS

 

Funds to be disbursed on behalf of the Client:

Anthem                                                                                   $1,951.41

TOTAL DEDUCTIONS                                             $

NET AMOUNT TO CLIENT                                                   $10,721.49

 

I understand that any bills or expenses owed, but not listed above, are my responsibility.

 

Desmond Law Office may discard any part of my entire file within 30 days after this date.

 

Have Seen and Agreed To:

_______________________

 

 

Notice that Settlement Summary shows that the health insurance lien is included and that money, from my Firm’s escrow account and my client’s personal injury settlement, will be paid to satisfy this lien.  However, the personal injury release will typically say that the settlement is exclusive of the no-fault lien which means that the insurance carrier will be paying another $10,000, for the PIP subrogation claim, directly to my client’s insurance company as well.

Injury Claim is Still Alive Because of Underinsured Motorist Insurance

In twenty years of practicing law, there have only been two times wherein I have viewed photographs from a car wreck that have truly grossed me out.  The second time was this week and was from a client whose open wound took about 9 months to heal.  While the at-fault driver only had the state minimum of $25,000 per person and that amount was tendered over a year ago, the case is still ongoing as we have two insurance companies that we are seeking underinsured motorist benefits from.

The insurance companies are arguing that they are both only responsible for a pro-rata share of my client’s personal injury claim.  I am arguing in response that the value of the injury claim exceeds the limits of both the insurance policies.  My client is still treating and the Statute of Limitations, the time we have to file suit, is not an issue. Therefore, if I cannot convince the companies to tender their limits, we will simply wait to settle the underinsured claims until my client’s treatment is finished.

Just as I preached about previously, the fact that the underinsured motorist insurance is there is why this case is still ongoing and the reason my client has a chance to recover the full value of her personal injury claim.  To put things in perspective, she was a passenger in the car and she has not returned to work since the wreck. Further, her medical bills alone are well in excess of $100,000.  Having the right type of insurance coverage before the car wreck makes all the difference in the world.

Facebook used during Plaintiff’s Deposition

I just got out of a deposition this morning and the client did pretty well. However, defense counsel pulled out and questioned her about 9 posts from Facebook that had nothing to do with her injuries or the lawsuit. Basically, there were a lot of inferences based upon events or statements that someone would not have normally related to the lawsuit. The lesson: Remember anything you say on Social Media can be used against you in car accident lawsuits, divorce, cases, etc. If you are involved in some kind of legal proceedings, use your phone to vent to your friends rather than create a lifelong record of what you said.

Pedestrian hit by a Car and no underinsured motorist coverage in sight.

I am handling a case that I will blog more about later.  However, for the moment, let me tell you that my client was hit by a car while he was walking in a crosswalk and there appears to be limited insurance coverage on the at-fault driver. My client has been hospitalized at the University of Louisville Hospital since the day of the wreck.

Once again, let me tell everyone to have at least $100,000 per person of underinsured motorist coverage on their insurance for every car and motorcycle they own.  Yes, even though my client was a pedestrian, it would still have covered him in this instance.  Unfortunately, as of right now, I am not finding this underinsured coverage.  I am expecting his medical bills and lost wages to easily exceed the available insurance coverage.