One of the questions that people often ask regarding personal injury lawsuits is whether they can recover medical expenses from the defendant (the person who caused the accident) even if their health insurance company pays their medical bills.
The short answer to the question is – yes, you can.
Recovering Medical Expenses in Virginia – What You Need to Know
Virginia follows the collateral source rule, which states that a defendant is liable to pay for the injuries they inflicted on a claimant, even if the claimant in question has health insurance and their injuries are covered under the policy.
The important thing to be noted here is you are entitled to recover the full amount (the total cost of treating your injuries) from the defendant, not the amount that your healthcare provider received from your health insurance company.
Generally, there is a significant difference between the billed amount (the total cost of treating your injuries, as stated by your healthcare provider) and the amount paid by your health insurance company.
For instance, if the billed amount is $100,000, your health insurance company might only pay $80,000 to your healthcare provider. The rest is usually written off by the healthcare provider. The reason is that the healthcare provider stands to benefit enormously by partnering with the health insurance company. They get access to a large number of patients, as a result of which they are able to make a profit – in spite of the lower billing rates.
In the aforementioned scenario, you are entitled to recover the full amount – $100,000 – from the defendant, not just the $80,000 which was paid by your health insurance company.
The Subrogation Principle
When a person is injured as a result of someone’s negligence, they are not the only one who suffers financial losses. It has an impact on the health insurance company too, since they have to pay the medical bills. This is why the subrogation principle states that health insurance companies have the right to receive a share of the compensatory damages recovered by injury victims.
For example, let us assume that the total cost of treating an injury victim is $100,000. The health insurance company pays a sum of $80,000 to the healthcare provider. The victim’s attorney recovers a sum of $150,000 from the at-fault party. In this case, if the subrogation principle is applied, the health insurance company will receive their share of $80,000 from the proceeds (which is the amount they paid the healthcare provider). Assuming the attorney receives 25% of the recovered amount as their fees, which is $37,500, the victim will be left with $32,500.
The subrogation principle, as you can see, is beneficial to health insurance companies, but not so much to the victim, who suffered physical, emotional, and financial losses as a result of the injuries they sustained.
Fortunately, the principle of subrogation is prohibited under Virginia law. So, your health insurance company need not be compensated for the medical bills they pay – irrespective of how much you recover from the at-fault party.
In some cases, however, the principle of subrogation might be applicable in Virginia.
For instance, if your health insurance coverage comes under the Federal Employee Health Benefit Act (FEBHA), your health insurance company is entitled to receive a share of the damages you recover from the defendant. In this case, FEBHA, which is a federal law, supersedes Virginia’s anti-subrogation law.
Another federal law which supersedes Virginia’s anti-subrogation law is the Employees Retirement Income Security Act (ERISA). Under the law, employers who provide their employees with ERISA compliant health benefit plans are entitled to receive a share of the compensatory damages you recover through third-party settlements or verdicts.
The Importance of Hiring an Experienced Personal Injury Attorney
If you are a resident of Virginia who has suffered injuries in an accident which was caused by a third-party, it is important to hire a qualified and experienced personal injury attorney to represent you.
Firstly, the at-fault party’s insurance provider will use every trick in the book to deny your claim or reduce the compensation amount to the extent possible. So, unless you are represented by an attorney who can negotiate on your behalf and aggressively defend your interests, you will be forced to accept a low settlement offer.
Secondly, even if the subrogation principle is applicable to your case and you are required to reimburse your health insurance company or employer, it is still important to be represented by an experienced attorney, as they can negotiate with the insurance company or your employer and reduce the amount of reimbursement as much as possible.
Schedule a Consultation with us Today
The personal injury attorneys at Shapiro, Washburn & Sharp have successfully represented a number of injury victims in Virginia over the last three decades and have recovered millions in damages. We have the knowledge and resources to build a strong case against the person responsible for the accident and we will use all the tools in our legal arsenal to recover the maximum amount of compensation possible.
Call us today at (833) 997-1774 for a free consultation with one of our personal injury lawyers.