Can I collect my medical expenses even if they were paid by my insurance company?

San Mateo County Personal Injury Attorney Reuben Donig: The quick answer to that question is ‘yes.’ You’re entitled to collect back from the party who caused your injuries, all of the medical expenses that were incurred, regardless of whether you paid it or your insurance company paid it, or in some cases, if it’s still due in owing. You’re entitled to get all of that. There is a concept called ‘lien’ or ‘subrogation’ where the insurance company who’s paid your medical expenses, whether it’s Medicare, or Medi-Cal or a private health insurance company, or even your own employee under a self funded ERISA plan has a right to get reimbursed. So, let’s say for example you have $10,000 in medical bills of which you paid $1000 out-of-pocket and your health insurance plan paid $9000. If the other party who caused your injuries is entirely at fault, they have to pay that full $10,000. You then may be charged with having to reimburse your plan from the $9,000 that you collect that represents money that they paid for your health care.

Now sometimes, under the right circumstances and in the hands of an attorney who understands the law and knows what he or she is doing, you can skillfully negotiate and reduce that hypothetical $9000 reimbursement that you have to pay. There are a number of legal reasons why you should be able to reduce it, and some of those are recognized in the California Civil Code. Some of those may have to do with the procurement cost of the $9,000 that you got back that represents money that your health insurance plan actually paid for your medical expenses, you had to pay an attorney and you had to pay an attorney and reimburse an attorney for cost. It could be 30%, 35%, 40%. So, that ought to be reduced from what you have to pay back to your plan.

Sometimes you don’t get full compensation from the party who caused your injuries either because they didn’t have the sufficient amount of insurance or wherewithal to pay you fully or because they weren’t entirely at fault, there may have been some comparative fault on your part or the part of some other party. So the money that you got from that party, both for your pain and suffering as well as for your economic losses, your medical expenses, your income loss and so forth, you didn’t get a ¢100 on the dollar. You didn’t get 100%. And that often can be used as a reason why you should be able to further reduce what you reimburse your health insurance plan.

Now, when they make that claim for reimbursement, they’re doing it under usually a provision in the policy which gives them the right to subrogation, or in the case of Medi-Cal or Medicare, their right is a legally found right in legislation, and they have what’s an even, a stronger right. It’s called a ‘lien.’ It’s more enforceable. It has more teeth in it than a mere subrogation claim which is a contractual agreement between yourself and your insurance company.

To get back to the question, can you collect the money that you incurred for your medical expenses even if you didn’t pay it, even if it was paid by your health insurance company? The answer is ‘yes.’ What you got from your health insurance company is called a ‘collateral source’ and collateral source is something that the party who caused your injury is not entitled to take advantage of.

(Attorney Reuben Donig specializes in personal injury law and premises liability, including auto and car accidents in San Mateo County, Santa Clara County, Alameda County and San Francisco County. Visit him at www.doniglaw.com if you have a question you’d like to ask).