Subrogation — Subrogation claim

Subrogation is the legal right of a health insurer, Medicare, Medicaid, or another payer to be repaid from your personal injury settlement for medical bills they covered related to your injury. In plain terms, if someone else's negligence caused your injury and your insurer paid your medical bills, they want their money back when you settle.

Almost every personal injury settlement involves a subrogation issue. If health insurance, Medicaid, Medicare, or VA coverage paid any accident-related bills, expect a subrogation or recovery claim at settlement time.

Recovery rights differ by payer. Medicare has the strongest rights under federal law and strict procedures must be followed, or penalties can apply. Medicaid is also required by federal law to seek recovery in most states. ERISA plans, the kind offered by many large employers, have strong federal subrogation rights that can override state limits. Private health insurance is governed by state law and policy terms, and some states limit or prohibit subrogation.

The good news is that subrogation amounts are usually negotiable. An experienced personal injury attorney negotiates with insurers and federal payers to reduce the recovery, often by 30% to 50% or more, which increases the net amount the injured client keeps.

Never ignore subrogation. Unresolved claims can follow you, threaten future coverage, and lead to legal action against you. Liens and recovery claims should be identified, validated, and resolved before or at the time of settlement.