The goal of a personal injury settlement is to maximize recovery, eliminate all risk to the client, and get the best medical result possible.
I recently gave a second opinion to a client and became aware of a substantial problem. I drove over an hour to her house for a face-to-face meeting. An out-of-town law firm who advertises heavily on TV originally sent an “investigator” to the client’s hospital room to sign up her case. The client never met the attorney.
The client had catastrophic, life-long injuries, multiple surgeries, and weeks of hospitalization. The amount of available insurance money for recovery was very small. Her attorney recommended settlement and the paperwork prepared by her attorney made her responsible for all medical bills, insurance liens, and to hold the law firm harmless.
Here is the problem.
Health insurance companies have a “subrogation lien”. In English, this means they’re entitled to payment from you if you recover from a third-party. For example, let’s say your health insurance company paid $100,000 in medical bills. The person who caused the accident did not have adequate insurance and you received a settlement of only $25,000 because that is all the coverage that the person who caused the wreck had. Under the subrogation lien, you face the risk of having to pay back to the insurance company up to $25,000 of your settlement money, leaving you with nothing. The attorney did not explain this to the client.
The client was responsible to pay back hundreds of thousands of dollars to the health insurance company, plus out-of-pocket co-pays and deductibles out of her small recovery.
The attorney was attempting to “stick her” with a huge problem and get his “quick and easy” fee.
The client has now fired that attorney and my office is in the process of finding out insurance liens, co-pays and deductibles, and what bills remain outstanding. We will attempt to negotiate the health insurance liens down and apply for charitable write off’s for outstanding bills.
Further, there is a concern her health insurance will be canceled because she will never be able to return to work. We will work with the client to keep her health insurance active as long as possible. Then the options are potential Cobra coverage under federal law and then helping her apply for Medicaid.
Other options include working with her to obtain Social Security disability for living maintenance in Medicare for long-term health care.
Beware of the attorney with the quick easy solution. Clients need full information with all their legal options. Sometimes complex problems require complex difficult decisions. Make sure your attorney is willing to do the time-consuming work, so you are not financially destroyed in the long term.