Personal Injuries and Medical Bills
The value of a personal injury case is determined by the total of economic and noneconomic losses. Economic losses include loss of wage and benefits, lost earning potential, medical and hospital expenses, and life care costs such as home care, transportation, and any home modifications needed to accommodate a personal injury victim who becomes disabled as a result of their injuries. Non economic losses include pain, suffering, emotional distress, loss of household services, loss of usual activities, and loss of enjoyment of life. Depending on your state’s laws, noneconomic losses may be capped at a certain pre-set limit.
A personal injury victim’s total recovery is determined either by settlement or a jury verdict. The injured party’s biggest concern is how much money they will put in their pocket after the settlement or verdict. This amount, called the net recovery, is decided by subtracting legal fees and case expenses. In addition, in many cases, the injured party must repay third party payers for medical expenses that were paid. These third party payers include private health insurance, Medicare, Medicaid, the VA, and workers’ compensation. The third party payers’ right to reimbursement is called “subrogation.”
Right to Reimbursement
Depending upon the third party payer, their right to reimbursement arises by statute or by contract. For governmental third party payers, such as Medicare, Medicaid, the VA, and workers’ compensation, the right of subrogation arises by statute. Since it is a legal requirement, your personal injury lawyer will voluntarily notify the applicable government agency of the pending claim and solicit a letter from the third party payer that sets forth the full amount of the subrogation lien that must be reimbursed. The lawyer can negotiate with these entities to reduce the amount of the lien to reflect a compromise settlement and the costs of recovery, including legal fees and expenses.
Right of Subrogation
Private health insurers’ right of subrogation arises by the terms of the insurance contract. These third party payers must affirmatively notify their insured of their right of subrogation. They must notify the insured of their right of subrogation on a timely basis, or they may be barred by the doctrines of waiver or estoppel, equitable principles that preclude recovery when the insurer sits on its rights. In order to monitor their insureds’ medical expenses for potentially subrogable claims, private health insurers monitor International Classification of Diseases (ICD) billing codes for evidence of traumatically caused personal injuries. Certain billing codes will trigger a letter from the insurer to the insured notifying them of their right of subrogation and inquiring about the circumstances of the injury they sustained.
Recent modifications of ICD codes provide additional detail to billing codes that assist third party payers with injury surveillance to determine the mechanism and intent of injury. The revised billing codes, contained in ICD-10-CM, include the following mechanisms of injury: cut, pierce, drowning, submersion, fall, fire, burn, flame, hot object, hot substance, firearm, machinery, motor vehicle traffic and nontraffic, such as pedal cyclists, pedestrian or other, bites, stings, poisoning, struck, suffocation, abuse, or foreign body. The codes also include a cause-of-injury matrix which specifies an external cause of personal injury, including transport accidents, accidental injury, assault, poisoning, toxic effects of substances, asphyxiation, abuse, lightning, drowning, and electrocution.
These billing codes are used to trigger notification of a third party payer’s right of subrogation or an audit of expenses to determine the full amount of a subrogation lien. A skilled serious personal injury lawyer, like a Cleveland serious personal injury lawyer, will conduct his or her own audit of expenses to make sure that the subrogation lien is not overstated.
Thanks to Mishkind Kulwicki Law for their insight into medical bills for personal injuries.