QUESTION:
I want to know how much of the money needs to be paid to my healthcare provider which are Kaiser, as well as my brother’s which is Medicare if I settle with the other person’s insurance company for a house fire accident. Is there a maximum or will they take it all? The insurance company agreed to pay the maximum that is the reason why we didn’t have a choice but to settle. They will pay ¼ of our medical bills. However, we lost everything including income. What percentage shall be left for us, if any?
ANSWER:
According to the California State Law some insurance policies like Kaiser cover the insured’s medical bills, but give the carrier a right of reimbursement from the insured claimant in the event of recovery from a third party. Such medical liens or rights of subrogation reduce the net value of the potential claim and thus might make legal action economically impractical. In addition to subrogation and intervention rights, Medicare has specific rights to obtain reimbursement of benefits paid with respect to a Medicare beneficiary injured by a third-party tortfeasor: The beneficiary “or other party” who receives a “third party payment” is required to reimburse Medicare within 60 days [ Zinman v. Shalala (ND CA 1993)].
The lienholder is usually willing to reduce its lien to help close a settlement. Indeed, negotiations as to lien cuts are conducted in almost all these cases. They are usually a productive means of moving a case toward settlement because the lienholder is aware of the expenses it will have to incur if the case goes to trial in an effort to recoup some of the dollars it has already paid out. If plaintiff received compensation for the injuries from a workers’ comp carrier, Medi–Cal, Medicare, Kaiser Insurance or other benefit provider, that entity may be entitled to recover such payments from any settlement or judgment against defendant. Similarly, an injured Medicare beneficiary must reimburse any medical expenses paid by Medicare. If an insurer is involved in the claim, the insurer must report the settlement to Medicare; and if the beneficiary fails to reimburse Medicare, the insurer must do so. (Medicare may also assert reimbursement rights against plaintiff’s attorney.) Thus, as a practical matter, the insurer is not going to release the settlement proceeds unless Medicare’s reimbursement rights have been satisfied. Medicare is not bound by the parties’ settlement allocation between medical expense damages and other damages. This is so even where a court approved the allocation. However, Medicare normally defers to an allocation made through a jury verdict or after a hearing on the merits. It would be best to seek personal assistance from a lawyer in order to guide you with your personal injury case.
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