Medical Bills Exceed Settlement?

What Happens When My Medical Bills Exceed Settlement Amounts?

Serious auto accident injury cases can have several challenges on the path to putting money in the client’s pocket. One situation that DeKeyzer Law auto accident lawyers commonly encounter is when the medical bills exceed settlement amounts. This situation appears often in cases involving personal-use vehicles because the legal minimum policy limit for these vehicles is only $30,000 and most folks do not increase their policy limit amounts.

What Is A Hospital Lien In An Auto Accident Injury Case?

Immediately after a serious auto accident, any injured persons will be rushed to a local hospital, and given appropriate medical treatment. In serious injury cases, this sequence of medical care includes lengthy care and monitoring by nurses and doctors along with advanced diagnostic studies. The final hospital bill for this type of medical treatment can range anywhere between $20,000 and $100,000 and maybe more. Many of these large emergency bills go unpaid entirely because many patients lack health insurance or the health insurance company refuses to pay arguing the auto insurance company should pay the bill.

Since hospitals cannot, except under a few exceptions, refuse medical treatment to patients, the Texas legislature enacted laws to give hospitals a special legal right to file a lien on injury settlement funds. If the hospital meets the statutory requirements, it can create a valid lien which requires the auto insurance company funding the settlement to pay off the hospital lien before paying any funds to the victim(s) or the lawyer. In auto accident cases where the hospital bill is below $10,000, the personal injury lawyer will typically negotiate directly with the hospital to resolve the outstanding bill. 

Texas Civil Practices and Remedies Code Chapter 140

The Texas legislature has also enacted state laws to prevent hospitals and others from taking the entire settlement funds when the medical bills exceed the available settlement. For example, other payors like health insurance plans that generally have a subrogation right. The hospital lien is a statutory right while the subrogation right in the other hand comes from the health insurance contract. It may end up being that an injured victim accumulates a $25,000 hospital bill and will also owe her health insurance plan another $20,000 for additional treatment. 

In this situation, the Texas Payors’ Limited Recovery law states that all payors must share one-half of the injured victims’ gross recovery after attorney’s fees and expenses. In practice, the attorney receives 1/3, the injured victim receives 1/3, and the hospital and health insurance plan split the remaining 1/3. Without this protection, the medical bills exceed settlement amounts and the hospital and the health insurance plan would be able to take the full settlement amount of $30,000 leaving the injured victim with zero money.  

Hospital Liens and Subrogation Holders Have No Claim To UIM/UM Settlements        

Auto accident injury claims often have several insurance coverages that apply to the same collision. The most common additional policy is the underinsured motorist/uninsured motorist policy (UIM/UM). Reviewing the example above but now adding that the injured victim had valid UIM/UM coverage would result in a much better outcome for the injured victim because the hospital and the subrogation holder must release their claims to settlement funds by accepting the statutory limited amount. In that situation, any UIM/UM settlement money will go directly to the injured victim after attorney’s fees.

Conclusion

The auto accident injury lawyers of DeKeyzer Law PLLC have decades of combined personal injury experience handling auto accident injury cases. Auto accident injury cases have many legal hurdles to maximizing settlements, and our lawyers keep a diligent eye to ensure that clients receive the most money possible in their pockets. 

Contact DeKeyzer Law at (713) 904-4004 for a FREE consultation on your Personal Injury or Wrongful Death case. Our lawyers are available for consultation at our office located in Alvin Texas at 1612 W. Highway 6, Alvin, Texas 77511.