Subrogation can strip your settlement amount
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Subrogation can strip your settlement amount

If you get in a wreck with an at-fault driver and your health insurance provider pays your medical bills, they have a right to reimbursement from any later settlement or judgment. Most people would agree that is fair. However, some providers are trying to squeeze a little more out of proceeds from civil claims.

For instance, health insurance companies contract with medical providers to pay a percentage or specified sum for each charge. If the clinic's rate for an MRI is $1,500, the insurance company can agree to a cap of $1,000. Then, insurance will pay 70 percent of the charges, or $700, leaving the patient with a balance of $300.

Yet that still leaves a $500 balance owed on the normal MRI rate that nobody is paying. Should a patient make a claim against the at-fault driver and get a settlement, some medical providers are taking the concept of subrogation a step further and pursuing patients for "balance billing."

This is quasi-legal territory, whereas subrogation is perfectly legal. But in 2009 the California Supreme Court banned the practice of balance billing. Therefore, if medical providers pursue patients for these sums of money after both the insurance company and the patient have met their financial obligation, they are running afoul of the law.

We understand that most patients only have a vague idea of how the entire process of billing and subrogation works. That's why we take the time to explain these complexities to our clients to make sure that they know their rights and responsibilities when they pursue damage claims after collisions with at-fault drivers. We make sure that there are no unwelcome surprises for our clients and that medical providers abide by the laws of the state of California when collecting what is owed to them.

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