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Your Health Insurance’s Right to Subrogate Your Personal Injury Case April 18, 2008

Posted by Attorney Jonathan Groth in FAQ Personal Injury.
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The easy answer is: call your attorney as soon as you receive any documents from your health insurance, auto insurance or any government insurance (e.g. Medicaid or Medicare).

When someone is involved in an auto accident, motorcycle accident, slip and fall, truck accident or any personal injury for that matter their health insurance or auto insurance (med pay policy) will most likely have the right to get paid back from the at fault party.  

The best I can describe it is: Let’s say you are driving your car and a tree suddenly falls onto the road in front of you.  You hit the tree and are injured.  No one is at fault for the collision.  Your auto insurance policy (med pay) and health insurance will pay for the medical care.  They don’t expect anyone to pay them back.  (You can only sue God on shows like Ally McBeal or Boston Legal). 

On the other hand if you are driving a car and are rear ended by someone else then someone IS at fault.  The at-fault driver is responsible to pay your medical expenses (also see What is My Case Worth). 

Your health insurance or auto insurance (med pay policy) will pay the bills as they come due.  Your policy most likely says that they have a contractual duty to pay them.  But, your policy also probably says that they will pay with the understanding that once you obtain a recovery from the at-fault party you will pay health insurance or your auto insurance’s med pay back. 

In essence, they pay the bills so you can get the care you need.  They pay the bills so the doctors don’t come after you directly.  They pay the bills and then send “reminder letters” called Lien Letters or Subrogated Party letters to remind everyone that once the case is settled they want to get paid back.

I strongly encourage all of my clients to submit their bills to their health insurance first.  Then, if they have co-pays or out-of-pocket expenses submit these amounts to their auto insurance (med pay). 

You are probably wondering why the at-fault party doesn’t pay your medical expenses right away.  Good question.  I’ll discuss this later on.  The short answer is that the at-fault party in a collision won’t pay until they receive re-assurance that they will never have to pay again (i.e. a signed release from the injured party).  The at-fault insurance company almost never pays what they are responsible to pay until you are totally done treating.  See my other entry about making sure the at-fault party pays what the laws says they must pay.


Jon Groth is a Wisconsin Personal Injury Attorney handling cases throughout Wisconsin and most recently in Beloit, Marinette, Racine, Manitowoc and Wausaukee.