Two bones in my right leg were broken as a result of a trauma fracture in a car accident due to the other driver’s negligence. The other driver’s insurance has settled my claim for their maximum $100,000 bodily injury limits.
Now my auto insurance company is in the process of reviewing my underinsured motorist claim.
My health insurance company has a medical lien for $75,000 for reimbursement. Their representative (collections company?) has maintained that this amount is not negotiable. I am still in treatment and will have more medical bills.
My health insurance provider is a PPO in New Jersey, though I live in Pennsylvania.
Question: What are the laws governing medical lien negotiation in PA and NJ?
Do health insurance companies have a legal claim to the full amount of their costs in this case?
Thank you for answering my questions.
Disclaimer: Our response is not formal legal advice and does not create an attorney-client relationship. It is generic legal information based on the very limited information provided. Do not rely upon the information in our response, or anywhere else on this site, when deciding the proper course of a legal matter. Always get a personalized case review from a local attorney.
Thank you for your question. Your situation is complicated, given that you are still under treatment and may be receiving additional injury compensation under your underinsured motorist coverage.
Medical Liens in General
Health insurance companies can use liens to recover medical costs paid on your behalf. In your case, your insurance likely paid $75,000 for your initial medical expenses before you settled with the other driver’s insurer.
Once you settled your claim, your insurance company asserted the lien to recover the initial money it paid for your accident-related injuries.
The lien has to do with the concept of subrogation. Subrogation is a legal term for the right of others (usually an insurance company) to stand in your shoes and collect money from the at-fault party for expenses paid on your behalf.
The party seeking subrogation has the right to place a lien against your injury compensation to collect their share of the proceeds from the at-fault party.
Subrogation is considered fair because, without it, you would double-dip. “Double dipping” means injured victims gaining the benefit of getting their medical bills paid and then also getting to keep settlement funds that were meant to cover the medical bills.
PA and NJ Laws on Medical Liens
Both Pennsylvania and New Jersey originally enacted so-called “anti-subrogation” statutes. These laws are considered anti-subrogation because they were designed to prevent subrogation, as outlined above.
However, through time, courts have carved out numerous exceptions to these laws so that health insurance companies can still assert a medical lien against motor vehicle injury settlements.
The pertinent law in New Jersey is New Jersey Statute 2A: 15-97.
Although your health insurance is through a company based in New Jersey, the laws in your state of residence – Pennsylvania – may take precedence.
Pennsylvania laws limit subrogation by health insurance companies after a car accident, depending on the type of health insurance you have. For example, HMOs are allowed to subrogate against auto injury settlements.
Negotiating Medical Liens
We are assuming you did not have an attorney handle your injury claim. Most car accident injury attorneys will negotiate medical liens on your behalf.
Sometimes you can negotiate medical liens on your own. However, before you begin negotiations, we recommend that you contact your insurance company for a copy of the policy language that gives them a subrogation right. Then take your copy of the policy to a local personal injury attorney.
You may find that the health insurance policy only gives them the right to recover a partial amount of the bills they paid. An attorney can tell you if they have the right to any subrogation of your auto injury settlement under Pennsylvania law, regardless of the policy language.
If the company can legally go after the full amount of medical bills paid on your behalf, you can try to negotiate.
Your situation is complicated by the fact that you are still receiving medical treatment and will have to pay more medical bills.
Given the large amount of the lien, expected future medical bills, and a potential underinsured motorist settlement from your auto insurance carrier, it’s a good idea to consult with a personal injury attorney before initiating negotiations with your healthcare insurance provider.
Learn more here: Negotiating Medical Liens
The above is general information. Laws change frequently, and across jurisdictions. You should get a personalized case evaluation from a licensed attorney.
We wish you the best with your claim,
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