Do I have to pay back medical bills out of my car accident settlement?

By Ben Sessions on April 8th, 2018 in Car / Auto Accident

Many people want to avoid paying medical bills and reimbursing insurance companies out of their settlement. This is understandable. Because of the way that contingency fee agreements are structured for lawyers in car accident and personal injury cases, every dollar that is paid to medical care providers or health insurance companies is a dollar that is taken out of your settlement. (That is not unusual, and it should happen this way.) The lawyer is to be paid out of the settlement proceeds, so the money that is paid to healthcare providers or insurers is money that would have otherwise gone to you – the injured client. So, determining what bills need to be paid from a settlement is really important. 

Be very careful with “hospital” liens, medicare/medicaid liens, and claims for reimbursement from insurers (particularly ERISA insurers). 

Hospital liens are the most common type of liens upon car accident insurance proceeds that we encounter. The basic provisions are below:

(b) Any person, firm, hospital authority, or corporation operating a hospital, nursing home, or physician practice or providing traumatic burn care medical practice in this state shall have a lien for the reasonable charges for hospital, nursing home, physician practice, or traumatic burn care medical practice care and treatment of an injured person, which lien shall be upon any and all causes of action accruing to the person to whom the care was furnished or to the legal representative of such person on account of injuries giving rise to the causes of action and which necessitated the hospital, nursing home, physician practice, or provider of traumatic burn care medical practice care, subject, however, to any attorney’s lien. The lien provided for in this subsection is only a lien against such causes of action and shall not be a lien against such injured person, such legal representative, or any other property or assets of such persons and shall not be evidence of such person’s failure to pay a debt. This subsection shall not be construed to interfere with the exemption from this part provided by Code Section 44-14-474.

Before you settle your car accident case, know what must be paid from the proceeds.

Before you settle your car accident case, speak with a qualified car accident attorney so that you will have an understanding of what must be paid from the proceeds of the settlement. Remember: once you have agreed to a settlement amount, there is no going back – even if the settlement leaves you with no money for your pain and suffering.