What is “SUBROGATION”?

QUESTION:

WHAT IS “SUBROGATION”?

AND THE ANSWER IS:

As soon as the medical provider’s billing code shows your treatment resulted from a wreck, you will likely receive paperwork to fill out explaining what happened, identifying the liability carrier, and identifying your attorney. We can complete that paperwork for you.  They will assert their right of subrogation, which means they want their money back.  But all is not lost.  Let’s talk about the best way for you to handle this situation.  When you go to the hospital, give them only your health insurance information.  Never give them the liability insurance information.  More on that in the next item. Your health insurance company has negotiated a contract with that hospital where they have agreed by contract to accept less than the billed price for their services.   You will later have to pay back your health insurance carrier on their subrogation claim.

Here’s how this can work to your benefit.  Say the hospital charges $100.  The health insurance contract price is $62.  In resolving your case we can, under South Carolina law (not North Carolina), submit the entire $100 bill to the liability carrier.  They pay the $100.  Then we negotiate down your health insurance company’s subrogation from the $62 they paid to $40.  In the end, you only pay $40 on the $100 hospital bill. The hospital got what they contracted for ($62).  The health insurance company got back what they negotiated for ($40). And liability carrier paid what they were required to pay ($100).  All negotiated, and all legal and above board.  You may ask:  What if my health insurance carrier never contacts me about their subrogation claim?  Not all carriers are aggressive about pursuing them.  If they don’t put you on notice of their subrogation claim, don’t go looking for one.  The exceptions are ERISA plans and any state or federal medical plan such as Medicaid or Medicare.