If you’ve been researching your options after an accident, you’re probably aware by now that you can receive compensation for medical expenses. In California, if someone else was at fault—for instance, if a driver hit you—their insurer should cover the medical expenses related to your injuries. These costs fall under economic damages, which can be recovered through a personal injury claim.
However, accident victims often face a common challenge: time. It may take months, or even longer, to negotiate a settlement, even with the assistance of a Los Angeles personal injury lawyer. Meanwhile, medical treatment can’t wait, and someone must cover the costs during the settlement process.
Accident victims typically have two main choices—using their health insurance to pay for treatment or arranging for medical care on a doctor’s lien. Below, we explain these options, including their advantages and potential drawbacks. For personalized guidance, contact a Los Angeles personal injury attorney who can help you navigate the best approach for your situation.
Using Health Insurance for Accident-Related Medical Care: What You Need to Know
If you have health insurance, it can help cover the cost of medical treatment, including surgery, doctor’s visits, prescription drugs, and rehabilitation. This option can offer immediate access to care, allowing you to start your recovery without worrying about upfront payments. However, it’s important to understand that most health insurance policies contain a subrogation clause. This means the insurer has the right to be reimbursed for medical expenses if you receive a settlement or verdict for your injuries.
Subrogation rights are common, but they come with certain limitations under California law. For instance, the “made whole doctrine” may apply, which states that your health insurer cannot demand reimbursement until you have been fully compensated for your losses. This can provide some protection for accident victims, ensuring that they are not left out-of-pocket after a settlement.
It’s a good idea to review your health insurance policy for any subrogation terms, as they vary from one plan to another. If you find the language confusing or uncertain about your obligations, consulting a Los Angeles personal injury lawyer can help you understand your rights and maximize your recovery.
California’s Collateral Source Rule & its Impact on your Settlement
The collateral source rule in California means that if you receive money from your health insurance to pay for medical bills after an accident, it doesn’t lower the amount of compensation that the person who caused the accident (or their insurance) owes you. In other words, the at-fault party still has to pay the full amount for your medical expenses, even though your health insurance already covered some of those costs.
Example:
Imagine you were injured in a car accident and racked up $10,000 in medical bills. Your health insurance pays the $10,000 directly to the hospital. Because of the collateral source rule, the at-fault driver (or their insurance) still has to pay you $10,000 as part of your settlement, even though your health insurance already covered the medical bills.
However, here’s the catch: if there are outstanding liens—like a doctor who treated you on a lien basis and hasn’t been paid yet—those liens still need to be settled. That means you would use part of the $10,000 you receive from the at-fault party’s insurance to pay off those medical liens.
So, while the collateral source rule prevents the at-fault party from benefiting just because you had health insurance, you still have to make sure any unpaid medical bills or liens are covered from your settlement.
What Happens if a Settlement Can’t Be Reached?
In the event that a settlement is not reached, the health insurer may indeed not have a right to reimbursement. This is because subrogation typically arises only when there is a recovery from the at-fault party, either through a settlement or a verdict. If there is no recovery, there is no fund from which the insurer can seek reimbursement. This means that the injured party might be able to retain the benefits that covered the medical expenses.
However, this depends on the terms of the insurance policy and whether other factors come into play. For example, some policies may have contractual language that could still require repayment under specific conditions. Additionally, public insurance programs like Medicare or Medi-Cal have distinct rules for reimbursement that could still apply even if a settlement isn’t reached.
In summary, while it’s true that if no settlement is obtained, reimbursement to the health insurer is usually not required, the exact outcome can vary based on the specific insurance policy and any applicable state or federal laws.
Medical Treatment on a Lien Basis: Pros, Cons, and What to Expect
If you don’t have health insurance or prefer not to use it, you can receive medical treatment on a lien basis. In California, this means the doctor agrees to wait for payment until your personal injury case is resolved. You’ll sign an agreement giving the doctor a right to be paid directly from your settlement or court award, known as a lien.
While a doctor’s lien can be helpful for accessing immediate medical care, there are some important factors to consider. First, treatment costs on a lien may be higher than those billed to health insurers, as doctors don’t have pre-negotiated rates. This could affect how much you ultimately recover from your settlement.
If you are partially at fault for the accident, your compensation may be reduced proportionally. This could impact your ability to pay off a lien in full, making it even more important to negotiate lien reductions.
However, our personal injury attorneys can help reduce medical liens to maximize the amount you take home.
Lastly, some accident victims wonder whether doctors who accept liens offer lower-quality care. In our experience, lien doctors can be just as qualified as others, though it’s wise to research the provider’s reputation and experience.
A doctor’s lien is a valuable option if you lack health insurance or want to avoid upfront costs, but it’s crucial to understand how it may impact your case’s final outcome.
Having a personal injury lawyer managing your case takes the pressure off you. While you focus on your recovery, your attorney will review and negotiate lien agreements.
Other Payment Options
Before committing to a lien, explore alternatives like MedPay (medical payments coverage) under your auto insurance policy, workers’ compensation if the accident was job-related, or government programs such as Medi-Cal, which may help cover medical expenses.
In Need of Medical Care? Don’t Wait—You Have Options
After an accident, getting prompt medical treatment is crucial to protect your health and your legal rights. Fortunately, California law provides options for receiving the care you need, even if you don’t have health insurance. But the choices you make now can significantly impact your recovery and the compensation you receive.
Don’t risk missing out on the compensation you deserve. At El Dabe Ritter Trial Lawyers, our experienced attorneys can guide you through the best options for covering your medical expenses and negotiating any liens, so you can focus on healing.
Time is of the essence—waiting too long could weaken your case or limit your options. Contact us today to schedule a free consultation, and let us help you get on the path to recovery. Call now or fill out our form to secure your free case review.