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How to Keep More Money from Your Personal Injury Settlement
Obtaining a favorable settlement or jury verdict is only half the battle in a personal injury case. The other half of the battle is fighting with medical creditors and health insurance companies. At the end of the day, there is always a medical provider or health insurance company looking to take a bite out of your award.
Many personal injury attorneys in the area boast about discounted attorney fees and the number of settlements they have obtained. However, personal injury law is not always about the size of the settlement or verdict; it’s about how much money the client will receive. A million-dollar settlement is completely worthless if you have to pay back all of it to outstanding medical providers and insurance companies. Understanding the basic third-party interests in your personal injury case is critical to maximizing the amount of money you will take home. If you have been injured and are getting close to resolving your personal injury case, you more than likely have heard one of the following terms come up in discussions: outstanding medical expenses, balance billing and subrogation rights.
What Outstanding Medical Expenses May I have to Pay from My Personal Injury Case?
Outstanding expenses are the most common and easy to understand third party interest. Simply put, an outstanding expense is an expense that has yet to be paid or satisfied. These can result from failing to take care of co-payments, deductibles, or other forms of patient responsibilities pursuant to your health insurance agreement.
Outstanding expenses can also take the form of what is referred to as a lien. Many doctors and medical facilities in Arizona operate on a lien basis. This means that they do not get paid until you receive your personal injury settlement.
Typically, we recommend that our clients do not get treated on a lien basis due to the fact that it is usually more expensive. In other words, it stops you from putting more money in your pocket after a personal injury settlement. Doctors and medical facilities that treat on a lien basis do not have to reduce their charges to insurance contract rates. This creates the illusion that you are getting a great deal because there is no money required up front.
Typically, we recommend that our clients do not get treated on a lien basis due to the fact that it is usually more expensive.
However, at the end of the day, you will most likely pay them more than if you had your health insurance carrier pay the charges. As a result, many medical providers want to treat patients on a lien basis when they have been injured due to the fault of another. This is because the medical providers will receive more for the same treatment than if health insurance paid it. Most of the time, it is not in your best interest to receive treatment on a lien basis if you have health insurance.
Of course, if you do not have health insurance, then being treated on a lien may be your only option. If this is your situation you should contact Scottsdale Injury Lawyers today. Our firm and attorneys know doctors and medical providers throughout Scottsdale and Phoenix who will agree to treat clients on a lien. We can refer you to a medical provider who will make sure you get the medical treatment you need to get better. These providers will agree to only be repaid if, and when, you receive your personal injury settlement.
Outstanding expenses can impact your personal injury case but an experienced personal injury attorney should be able to negotiate them down for you. Failure to satisfy an outstanding balance will usually result in your account being sent to a collection agency which can have a negative impact on your credit. In the worst-case scenario, you can also be sued by the medical provider for any amount of money you still owe. For these reasons, it is important to always notify your attorney about outstanding medical expenses so that he or she can address them for you.
What is a Balance Bill and How Should I Deal With It?
A balance bill, often called a “surprise bill,” is a practice that is used by hospitals in Arizona. The billing practice allows for a hospital to be reimbursed its full charged amount from a personal injury settlement or the at-fault party. This is much different than the adjusted amount.
In normal circumstances, the hospital almost never gets paid the full amount it charges. Typically, hospitals will negotiate contractual rates with public and private health insurance companies and will only be reimbursed a fraction of what they originally charged. For example, on a $1,000 hospital visit charge, the hospital could be reimbursed as little as $100. The insurance agreement the hospital has with the health insurance company typically states the hospital must accept the pre-negotiated amount as full payment. Usually, these prices are predetermined and vary between health insurance programs and geographical area.
Likewise, when a patient treats at a hospital and does not have health insurance he or she usually receives a discount. This is typically referred to as a self-pay or cash discount. If the person meets certain requirements, he or she may even qualify for a charitable write-off. This means that the hospital will write off the entire balance without the patient paying anything. However, this is not the situation when the person is receiving treatment for an injury that was due to the fault of another.
How Can a Hospital Record a Balance Bill Lien Against My Personal Injury Settlement?
Remarkably, hospitals in Arizona have found a way to capitalize on injured victims and collect the entire charged amount, regardless of the adjusted/pre-negotiated rate. A.R.S. § 33-931 allows for hospitals and ambulance companies, to record a “lien for the customary charges for care and treatment or transportation of an injured person.” Although there are exceptions to this statue, it usually allows a hospital to accept its reduced payment from your health insurance company and then place a lien on your personal injury case. The lien is for the amount between what the hospital received from your health insurance company and its charged amount. This amount is then called the “balance.”
For example, if your health insurance company negotiated and paid $100 on your $1,000 hospital bill, the hospital would be able to place a lien on your personal injury case in the amount of $900. These liens are recorded in the Maricopa County Recorder’s office and are public record. A search can be performed by anyone on the Recorder’s website to determine if a balance bill is claimed. To perform a search one simply needs to enter the name of the patient. You can perform a search on the Maricopa County Recorder’s website by clicking here.
This holds true even though your patient responsibility to the hospital is actually nothing. The hospital is therefore incentivized to treat those injured by others because they will likely be paid more. In the previous scenario, had you not been injured by someone else, the hospital would only be entitled to the $100 it received from your health insurance company.
Therefore, it comes as no surprise that balance billing can be detrimental to your personal injury case, especially if there is limited money to recover. Fortunately, some Arizona statutes and recent case law have placed some serious limitations on the ability of hospitals to balance bill. For example, a hospital’s balance bill will not extend to first-party insurance benefits such as underinsured motorist and uninsured motorist coverage. Likewise, certain public and federal health plans such as Medicare and AHCCCS are exempt from Arizona’s balance billing statutes. In addition, health plans that are considered to be a “Health Maintenance Organization” (HMO), are also exempt. However, this still leaves the majority of people who have private, non-HMO plans vulnerable to the right of the hospitals to balance bill.
In the event that you are hospitalized as a result of another person’s negligence, it is important that you are aware of the hospital’s right to balance bill. You should seek legal representation as quickly as possible. A skilled personal injury attorney can advise you on what can or cannot be done to avoid an unfair balance bill.
Often times, hospitals will send questionnaires to your home after a visit in an attempt to solicit accident information from you. It is best to seek consultation from an attorney and follow his or her advice on what information you should give, if any. Even if your personal injury attorney is unable to discharge the hospital’s balance bill entirely, he or she should still be able to negotiate a reduced payoff. An experienced personal injury attorney, like those at Scottsdale Injury Lawyers, will ultimately be able to put more money in your pocket.
What is Subrogation and How Does it Apply to My Personal Injury Settlement?
Subrogation sounds like a complex term, but the idea behind it is quite simple. Essentially subrogation is the same as reimbursement. Subrogation allows for a health insurance company to be reimbursed for medical expenses that were paid as a result of someone else’s wrongdoing. Arizona is one of the few states with an “anti-subrogation rule.” This doctrine comes from Arizona court decisions and essentially prohibits health insurance companies from attempting to collect on your personal injury case.
However, like every aspect of personal injury law, there are some major exceptions to the anti-subrogation rule. Health insurance plans that operate pursuant to federal law preempt Arizona’s anti-subrogation rule. The most common of these plans include ERISA Plans, FEHBA Plans and Medicare. In addition, Arizona has specifically exempted AHCCCS recipients from its anti-subrogation rule. Failure to reimburse your health insurance company, when required to do so, can result in serious civil penalties later on.
Do I Need to Reimburse My Health Insurance Company from My Personal Injury Settlement?
It is important to always let your attorney evaluate your health insurance company’s rights to subrogate or right to reimbursement. Just because you have one of the above listed plans does not always mean that the health insurance company will have a right to be reimbursed from your personal injury settlement. There is case law addressing subrogation rights and mandatory reductions in Arizona and every personal injury case is unique. Fortunately, the skilled personal injury attorneys at Scottsdale Injury Lawyers have the required expertise to deal with every third-party interest scenario. In short, we can maximize the amount of money you will keep from your personal injury settlement by limiting the amount medical creditors can recover.
Contact a Personal Injury Attorney at Scottsdale Injury Lawyers Today
If you or a loved one suffered a serious injury and is in need of legal representation, contact Scottsdale Injury Lawyers today. An experienced Scottsdale personal injury attorney is available now to discuss your case. An initials consultation is free and our attorneys are available 24-7. There is no retainer to pay or any up-front costs or fees. We only earn a fee if we recover a settlement for you.
About the author: The content on this page was provided by Scottsdale personal injury attorney and civil rights lawyer Tony Piccuta. Piccuta graduated with honors from Indiana University-Maurer School of Law in Bloomington, Indiana (Ranked Top 35 US News & World Report 2018). Piccuta took and passed the State bars of Arizona, California, Illinois and Nevada (all on the first try). He actively practices throughout Arizona and California. He is a trial attorney that regularly handles serious personal injury cases and civil rights lawsuits. He has obtained six and seven figure verdicts in both state and federal court. He has been recognized by Super Lawyers for six years straight. He is a member of the Arizona Association of Justice, Maricopa County Bar Association, Scottsdale Bar Association, American Association for Justice, National Police Accountability Project and Consumer Attorneys of California, among other organizations.
Disclaimer: The information on this web site is for informational purposes only and does not constitute legal advice. The information on this page is attorney advertising. Reading and relying upon the content on this page does not create an attorney-client relationship. If you are seeking legal advice, you should contact our law firm for a free consultation and to discuss your specific case and issues.