Settlement Money For Yourself?
In this article, I want to answer this question, “Do I have to pay the doctor’s insurance company and insurance companies out of my settlement?” Or “Can I just keep my settlement money for myself?”
When Settling A Case
So, this came up with in a recent settlement that I’m administering for a client. I thought it would be a good topic. The first thing you need to know is that when we settle a case, there’s a law relatively recently in the state of Illinois that requires me to tell them. As a lawyer, in exchange for a settlement check that only has your name and my name on it, I agree not to disperse. In other words, send anyone any money on the case until all liens and claims have been negotiated.
That means as a lawyer, I am warranting that anyone with a valid claim against your case, we will negotiate it before we send anybody any money. The law basically requires me to do that, and if I don't do it, we can get into trouble. You could get sued; I could get sued. So, if somebody makes a claim or sends us a letter or calls us with a claim, we have to take it seriously.
Your Health Insurance Matters
Secondly, when a doctor treats you, he or she or any medical provider, when they give you medical care after an accident, they have an option if you have health insurance, they can bill your health insurance. Another option they have is to make a claim against your settlement proceeds on an injury case and wait for the case to resolve and get paid. That way their other option is to do neither of those things and just send you a bill directly. But doctors never do that because they know most people either have health insurance. They have the medical card, they have social security, they have Private health insurance through a job or they know like a lot of people Medical Care is so expensive.
Now, a lot of people don't have thousands of dollars laying around that they can easily pay a medical bill back for. So, usually doctors will take health insurance information, they'll take lien information on the injury case and if they're a doctor who handles injury cases often, they'll just lien it. But let's say, they decide to bill health insurance anyway. Well, here's what a lot of people don't know if you have health insurance. Your health insurance pay is any of your medical bills related to an accident and then you later recover money from that accident. Virtually, all health insurance requires or says that if they ask for their money back, you have to pay them some money back. Now you don't pay them all the money back, but let's say, they pay $3,000 hospital bill and they send you or me a letter saying, “Hey, we want to get paid out of the settlement. We know there's an injury case where they send you a letter saying: We believe that your visit on so and so may have been injury or accident related. Please fill out this form.” Well, you have to fill out that form, if you don't fill out that form, you're breaching your insurance contract and they can drop you or refuse to pay bills, so you don't want to do that and you have to cooperate.
If any of that happened, then we're under a duty to contact them at the end of the case and work something out now. It may be that on a three-thousand-dollar bill, they only pay twelve hundred dollars, and it may be that I'm able to get them down to something like eight hundred dollars. So, you're paying them 800 bucks out of your settlement on a three-thousand-dollar hospital bill.
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YES, You Have To Pay
It's a decent reduction, different lawyers handle it different ways. But, I always try and reduce these things as low as possible. The short answer is YES. At the end of a settlement, there are all kinds of claims against an injury case, and we have to pay them back right there. There are two special circumstances, Illinois Department of Health Care and Family Services or Public aid, and the federal end of it is Medicare, which is also like Social Security Disability any Social Security benefits.
If they're paying for your medical, they're paying your medical bills. Then under the law, they don't even have to contact us. We must reach out to them, which is why I always ask folks at the beginning of a case, and then in the middle, and at the end “Are you a Medicare or Medicaid recipient? Do you get Medicare? Do you have the medical card?” All that stuff because if you do, you and I have a legal duty to reach out to them to see if they are claiming anything in your injury case.
The only kind of lien or claim on a settlement that requires us to do so and I'm sure it's just a coincidence that they're federal agencies and that they don't have to notify us. We have to contact them to see if they want any money back. That's how it works, so there's really no way for us to just say “No, we're not paying anything back and etc.” What happens in so that's third party cases, that's car crash, fall down, dog bite, bar fight, nursing home abuse, all that stuff, that's how that works.
In Worker's Comp, No Lien
But in workers comp, you do not necessarily have to pay a doctor on a lien because there are no liens. But the same principles apply, if your workers comp medical bill gets paid through health insurance, your health insurance has a contractual based on the health insurance agreement you signed and that little fine print and the Giant Book they give you when you get health insurance at a job that nobody reads. There are pages in there about you have to pay them back if you get injured, so there's really no way to avoid many kinds of claims.
What I do when I administer a settlement is I don't want anything coming back and biting my client so anything I think might be a problem now or in the future. I bite the bullet and take care of it. If there are bills that we don't have to pay, that the client wants me to pay, I will contact them and make sure those get resolved. But if they don't have to be paid out of a settlement I don't like to give my clients money away, I'd rather give it to the client and have them decide what they want to do with their settlement money. But some clients want me to contact every medical provider on their list, confirm balances, make sure everyone gets paid whether they have a claim on it or not, whether they've asserted a claim or not which is fine.
It's more work and it means they're going to put less money in their pocket, but if that's what they want me to do, I'll do it. I'd say most people agree that if a doctor or insurance company is not making a claim, isn't asserting a claim against the settlement amounts every man for himself. The truth is you really just can't get the settlement money and give it to the client, there's a whole process that we have to go through and that's to protect you and to protect the lawyer's professional license and protect us both against lawsuits. Frankly, so pretty complicated I hope I was making sense I just I think all of the settlement stuff is so complicated that whenever I an article about it or try and explain it to somebody, I never know where to draw the line between too complicated or not detailed enough.
But if you or a loved one's been in a car crash, the best thing to do is give me a call. I promise it will be a short stress-free call, we can talk about what happened. You may reach me at 312 500 4500 24/7 free consultation.
