Expert Guide on Negotiating Medical Bills After a Settlement
One of the most critical and often overlooked aspects is negotiating your medical bills. After a settlement, you might expect your medical expenses to be automatically covered. However, the reality is that outstanding medical bills can still linger, potentially diminishing the compensation you fought hard to secure.
We employ practical strategies for negotiating medical bills after a settlement. Whether you’re dealing with hospitals, doctors, or insurance companies, not only will this guide provide you with the insights needed to reduce your medical debt and protect your financial future, but we can also step in on your behalf to get your medical bills lower.
Medical Bills in Personal Injury Cases
Understanding medical bills after a personal injury can be complex, especially if you don’t have a legal background.
There are three core areas to focus on here, which we’ll break down for you:
- Types of medical bills
- Subrogation
- Medical liens
Types of Medical Bills: Pre-Settlement and Post-Settlement
1. Pre-Settlement Medical Bills:
- Definition: Medical expenses incurred from the moment of injury until the settlement is reached.
- Coverage: Can include emergency room visits, diagnostic tests, surgeries, hospital stays, medication, and initial rehabilitation costs.
- Payment: Initially, these bills might be covered by health insurance, auto insurance (in the case of an auto accident), or workers’ compensation. In some cases, patients might have to pay out-of-pocket or arrange for payment plans with healthcare providers.
2. Post-Settlement Medical Bills:
- Definition: Arise after the settlement has been received and usually cover ongoing medical care.
- Coverage: Includes follow-up visits, continued therapy, long-term medication, and any other medical treatments required due to the injury.
- Management: Allocate part of your settlement for these future medical costs to avoid financial strain.
The Role of Health Insurance: Subrogation
Subrogation is the process by which an insurance company seeks reimbursement from the at-fault party’s insurance for the medical costs they have initially covered.
When your health insurance covers your medical bills after an injury, they retain the right to recover these costs from the settlement you receive.
This means a portion of your settlement will go to your insurance company to repay the expenses they covered. It’s essential to review and negotiate these subrogation claims to ensure they are accurate and fair, which is something a personal injury lawyer from our firm will do for you.
For example, if your insurance paid $20,000 for medical bills and you receive a $100,000 settlement, your insurer may claim a portion of the settlement to cover the $20,000 they paid.
Medical Liens: What They Are and How They Work
A medical lien is an agreement between you and your healthcare provider allowing you to receive medical treatment on credit, with the promise to repay the costs from your future settlement.
California Civil Code Section 3045.1 governs the creation and enforcement of medical liens in California. It ensures healthcare providers can claim their dues but also includes protections for patients.
When you can’t pay for medical services upfront, a healthcare provider might agree to a lien. This means they will provide the necessary treatment, and you will pay them from your settlement proceeds.
The provider must notify all parties involved in your case about the lien to perfect it legally. This ensures they are paid first from the settlement. Once you receive your settlement, the lien amount is deducted and paid to the healthcare provider before you receive the remaining funds.
As you might have guessed, medical liens have both advantages and risks:
- Advantages: Allows you to get necessary medical treatment without upfront costs, especially if you lack insurance or have high deductibles.
- Risks: If your settlement is insufficient to cover the lien, you may still owe the balance. This could lead to financial difficulties if not managed properly.
Post-settlement, it is often possible to negotiate the amount owed under a lien. Providers may agree to reduce the balance to ensure they receive some payment rather than risking none if the patient cannot pay.
Can a Lawyer Get a Reduction on a Medical Bill?
Yes, a lawyer can often negotiate a reduction on medical bills, leveraging their legal expertise and negotiation skills to benefit their clients. They do this by leveraging legal and negotiation expertise, relationships with medical providers, legal doctrines and protections, and practical strategies.
For more information on how we can help with medical bills after a settlement, get in touch with a Torrance personal injury lawyer
The Negotiation Process
Pre-Treatment Negotiation
- Request an Estimate: Before receiving treatment, ask your healthcare provider for a detailed estimate of costs. This can help you understand what charges to expect and provide a basis for negotiation.
- Compare Costs: Research and compare costs for similar treatments at different healthcare facilities. Websites like Healthcare Bluebook can help you determine fair prices for medical services.
- Negotiate Upfront: Discuss your financial situation with your provider and negotiate the cost before treatment. Many providers are willing to offer discounts or payment plans to secure payment.
Post-Settlement Bills
- Review Settlement Allocation: After receiving a settlement, review how much is allocated for medical expenses. Use this information to negotiate with providers, showing them the exact amount available for payment.
- Negotiate Lump-Sum Payments: If possible, offer to pay a lump-sum amount to settle the bill. Providers often prefer a guaranteed partial payment over the uncertainty of full payment.
Leverage These Tips For Negotiating After a Settlement in California
- Review Medical Bills for Accuracy: Carefully review your bills for duplicate charges, incorrect billing codes, and charges for services you didn’t receive. Upcoding and unbundling are common errors where providers bill for more expensive services or itemize bundled services to increase costs.
- Identify Non-Accident-Related Charges: Go through each charge to confirm it relates directly to your accident. Routine or unrelated medical care should not be included. Dispute any unrelated charges with your provider to reduce your overall bill.
- State Laws and Patient Rights: California Health and Safety Code Sections 127400-127446 require providers to offer reasonable rates and payment plans to uninsured or low-income patients. Hospitals must negotiate payment plans and provide discounts to eligible patients under state law.
- Request Discounts: Ask for a discount on your bill, especially if you are paying out-of-pocket or have limited insurance coverage. Many providers offer discounts for prompt payment or financial hardship.
- Set Up Payment Plans: Negotiate a payment plan that spreads out the cost over several months. This can make large medical bills more manageable.
- Use Legal Representation: Consider having your attorney negotiate on your behalf. Our lawyers have experience and relationships with providers that can lead to more significant reductions.
For example, our San Bernardino personal injury lawyers are experts in personal injury settlements and seasoned negotiators.
By How Much Can Lawyers Reduce Medical Bills?
Lawyers can often significantly reduce medical bills, sometimes by as much as 50% or more. The extent of the reduction depends on various factors, including the specifics of the case, the total amount of medical bills, and the negotiation skills of the attorney.
Here are some further insights and examples:
Billing Errors
Upcoding, duplicate billing, and unbundling are common issues that attorneys can identify to argue for lower bills. By demonstrating that certain charges were incorrectly billed, we can convince providers to reduce the billed amounts.
Medical Necessity
Our lawyers may be able to argue that some treatments or procedures were unnecessary for the recovery, leading to significant reductions. For example, if a hospital billed for multiple diagnostic tests that were not directly related to the injury, we would negotiate to remove these charges.
Insurance and Liens
We can also negotiate with insurance companies to reduce the amount they seek to recover through subrogation. Negotiating with medical providers holding liens can also lead to substantial reductions, especially when settlements are limited.
State Laws and Legal Doctrines
There are a couple of laws and legal doctrines we can use to our advantage for negotiation even after a settlement has been reached:
- Made Whole Doctrine: Ensures that you are fully compensated before insurers can reclaim their costs. We can use this to argue for reduced subrogation claims.
- Common Fund Doctrine: Ensures that the costs of obtaining the settlement are shared, which can reduce the amount claimed by medical providers and insurers.
How Long Will the Negotiations Take?
Even with our years of experience, we’re unable to give you a definitive timeline of how fast negotiations would be.
The length of time required to negotiate medical bills after a settlement can vary widely depending on several factors, including the complexity of the case, the total amount of medical bills, and the responsiveness of the healthcare providers and insurance companies involved.
- Simple cases with fewer medical bills can take a few weeks to a couple of months.
- Complex Cases with extensive medical bills and multiple providers can take several months to a year.
Here are some key points to consider:
- Complexity of Medical Bills: If the bills are extensive and require a detailed review to identify errors or unnecessary charges, the process can take longer.
- Amount of Medical Bills: Larger bills may take more time to negotiate, especially if multiple providers and significant sums are involved.
- Healthcare Provider and Insurer Responsiveness: Providers may need time to review and approve reductions, which can add to the overall duration.
- Legal and Procedural Requirements: Completing necessary documentation and meeting legal requirements can also add to the time needed. In some cases, court approval may be required, further extending the timeline.
Benefits of Having an Experienced Lawyer on Your Side
Our team here at Feher Law stands out for a number of reasons:
- Expert Negotiation Skills: We have the expertise to negotiate with healthcare providers and insurance companies effectively, often securing significant reductions in medical bills.
- Navigating Legal Complexities: Our team understands the legal frameworks and can ensure all procedural requirements are met, protecting your rights and maximizing your settlement.
- Access to Resources: We have access to a network of medical professionals and experts who can support your case, providing necessary documentation and testimony.
To find out more about how we can help you after your settlement or verdict, or even before it gets to that stage, maximizing your settlement amount, get in touch with us today.
Additional Tips and Considerations For Medical Bills After a Settlement
These are some additional areas to explore after your personal injury claim has been settled:
Seeking Financial Assistance
The following government assistance programs and non-profit organizations might be available to you:
- Medicaid: Provides healthcare coverage for low-income individuals and families. Medicaid can help cover medical bills and ongoing healthcare needs.
- Medicare: Available for individuals over 65 or those with certain disabilities. Medicare can cover hospital stays, medical supplies, and some rehabilitation costs.
- Patient Advocate Foundation: Offers co-pay relief and financial aid for various medical expenses.
- HealthWell Foundation: Provides financial assistance to cover insurance premiums and other out-of-pocket healthcare costs.
Frequently Overlooked Costs
- Transportation: Costs associated with traveling to and from medical appointments, including fuel, parking, and public transportation fees.
- Home Modifications: Expenses related to making your home accessible, such as installing ramps, handrails, or modifying bathrooms.
- Lost Wages and Earning Capacity: Not only immediate lost wages but also the long-term impact on your earning capacity should be considered.
Rehabilitation and Therapy
Ongoing rehab and therapy include physical therapy, occupational therapy, speech therapy, and psychological therapy, which are essential for full recovery. However, these also come at great expense, so consider these negotiation tips:
- Bundling Services: Requesting bundled services at a discounted rate can reduce costs.
- Payment Plans: Negotiating extended payment plans can make ongoing therapy more affordable.
Medication Costs
- Generic Alternatives: Ask your healthcare provider if a generic version of your prescription is available, as they are typically cheaper.
- Bulk Purchasing: Purchasing medications in larger quantities can often result in discounts.
- Pharmacy Assistance Programs: Many pharmaceutical companies offer patient assistance programs that provide medications at reduced costs or even for free.
Home Healthcare
- Negotiating Rates: Directly negotiate with home healthcare providers to reduce hourly rates or overall service costs.
- Using Licensed Home Health Aides: Hiring licensed home health aides through an agency can sometimes be more cost-effective than hiring private nurses.
- Insurance Coverage: Check if your health insurance or long-term care insurance covers home healthcare services. Some policies provide partial or full coverage.
Potential Consequences of Not Negotiating
In our experience, failing to negotiate medical bills after a personal injury settlement can have several serious financial and legal consequences:
- High Out-of-Pocket Costs: Without negotiation, you may end up paying the full amount of your medical bills, leading to significant out-of-pocket expenses.
- Accumulation of Debt: Large, unpaid medical bills can quickly accumulate, resulting in substantial debt that can affect your financial stability.
- Reduced Net Settlement: This means less money is available for other needs like lost wages, rehabilitation, and future medical care.
- Late Fees: If you cannot pay your medical bills on time, providers may charge late fees and interest, increasing the total amount owed.
- Collections: Unpaid bills may be sent to collections, which can further increase costs and damage your credit score.
- Enforcement of Liens: If not negotiated, these liens can claim a significant portion of your settlement.
- Legal Action: If you fail to pay the medical liens, providers may take legal action to recover the debt, potentially leading to wage garnishment or other legal consequences.
- Full Reimbursement to Insurers: Without negotiation, insurance companies can claim full reimbursement through subrogation, leaving you with less of your settlement.
- Litigation: Insurers may pursue legal action to enforce their subrogation rights if you do not pay the amount they claim.
- Credit Score Impact: Unpaid medical bills can be reported to credit bureaus, significantly impacting your credit score and making it more difficult to obtain loans, credit cards, or favorable interest rates in the future.
- Emotional and Mental Stress: Managing large medical debts can cause considerable stress and anxiety, affecting your overall well-being and recovery from the injury.
Additional reading: what happens when you reject an insurance settlement offer
How California’s Laws Impact Negotiations
California has several laws and regulations that specifically address the negotiation and settlement of medical bills following a personal injury. These laws provide protections for patients, ensure fairness in billing practices, and establish guidelines for healthcare providers and insurers:
1. California Civil Code Section 3040
California Civil Code Section 3040 limits the amount that health insurers can recover through subrogation and reimbursement from personal injury settlements. Insurers cannot recover more than the amount the injured party received from their settlement This ensures that the injured party is fully compensated for their losses before insurers can claim reimbursement.
2. The Made Whole Doctrine
The purpose of the “made whole” doctrine is so that injured parties are fully compensated for their losses before an insurer can exercise subrogation rights. Effectively, insurers are limited in their ability to claim reimbursement if the injured party has not been made whole.
The case of Sapiano v. Williamsburg National Insurance Co. reinforced the application of the Made Whole Doctrine in California.
3. California Health and Safety Code Sections 127400-127446
California Health and Safety Code Sections 127400-127446 require hospitals to provide discounts and reasonable payment plans to low-income and uninsured patients:
- Reduced rates for patients whose income is below 350% of the federal poverty level.
- Hospitals are required to negotiate payment plans that are reasonable and affordable.
4. The Common Fund Doctrine
This requires that attorneys’ fees be deducted from the total amount recovered before insurers can claim subrogation. It ensures that the costs of obtaining the settlement are shared by all beneficiaries of the fund, including insurers.
Serrano v. Priest (1977) established that beneficiaries must share the cost of legal fees if they benefit from a lawsuit.
5. California Civil Code Section 3045.1
California Civil Code Section 3045.1 governs the creation and enforcement of medical liens in California. It allows healthcare providers to secure payment for services through liens on personal injury settlements.
Providers must notify all parties involved to perfect the lien, ensuring they are paid first from the settlement.
In California and Need Expert Guidance?
If you’re navigating the complexities of medical bill negotiations after a personal injury settlement, it’s essential to have expert guidance. The laws and regulations in California can be intricate, and having a knowledgeable attorney by your side can make a significant difference.
Don’t navigate this challenging process alone. Reach out to an experienced personal injury attorney who can provide the guidance and support you need.
Contact us today for a free consultation to discuss your case and explore your options for negotiating medical bills.
Why Choose Us?
- Proven Track Record: Our team has successfully negotiated significant reductions in medical bills for many clients, ensuring they receive the compensation they deserve.
- Expert Legal Team: Our attorneys are well-versed in California’s personal injury laws and have extensive experience in handling complex cases.
- Client-Focused Approach: We prioritize our clients’ needs and work diligently to protect their financial interests.
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