Who Pays My Medical Bills? Colorado Injury Subrogation Explained.

A common question we receive from injured clients relates to who will pay their medical bills. Does the responsible party pay them directly? Or their insurance company? What happens if my medical bills are higher than the available insurance coverage? All great questions and all the more reason seriously injured victims need legal representation to ensure their claim is handled appropriately. 

What Is Subrogation and How Does it Apply in Colorado?

Subrogation is the health insurance company's right to reimbursement for the medical benefits they paid on your behalf if you were injured by a third party. By way of example, if you are severely injured in a car accident and your medical bills are $100,000 and your health insurance company covered those bills, the health insurance company can subrogate against any settlement you receive in a personal injury claim. 

A few important points: the health insurance company can only get reimbursed for the amounts they actually paid, not the full billed amount of the medical charges. Health insurance companies have contracts with hospitals and medical providers that allows them to pay a reduced amount from the total bill. For instance, if the emergency room charge for x-rays, MRI's, and other scans totals $50,000, the health insurance company may only pay 50% of the bill. In Colorado, an injured victim can claim the billed amount as part of their economic damages but the health insurance company can only get reimbursed for the amount it actually paid ($25,000). Each plan is different, however, and an experienced injury attorney will need to investigate all aspects of the plan and what the client owes in subrogation before they receive any compensation via settlement or judgment. 

Finally, a health insurance company can only subrogate against an actual recovery the injured person receives from a third party. 

How Do My Medical Bills Get Paid?

The medical bills are paid after there's a settlement or recovery via a jury verdict or judgment. They are paid from the gross amount the injured person receives. If there's a settlement with the at-fault party's insurance company, the insurance company will tender the settlement check to the plaintiff attorney's trust account. Then, the attorney will satisfy all subrogation payments with the health insurance companies or other medical providers directly on behalf of the client.

That is one key reason it always makes sense to hire an experienced personal injury attorney if you've suffered serious injury. The lawyer will negotiate and handle all subrogation claims for you. 

What If My Medical Bills Exceed The Insurance Coverage?

Unfortunately, we've seen this scenario all too often, especially with clients who have suffered life-altering injuries. There are a few options available to lessen the impact of this kind of financial shortfall. Depending on the type of health insurance plan the injured person has, Colorado's Made Whole Doctrine may apply. Under C.R.S. 10-1-135, an insurer cannot pursue subrogation against an injured victim unless that person has been "made whole." If the plaintiff recovers the full amount of all available insurance proceeds from the liability and the underinsured/uninsured ("UM/UIM") carriers, it is presumed that the injured party has not been made whole. 

In other words, if someone suffered serious injury and they receive a settlement for the full extent of all insurance, the law states that their injuries exceeded the recovery and the health insurance companies cannot pursue subrogation.

However, certain health coverage plans (ERISA, Medicaid, Medicare, and others) are federally protected and will preempt Colorado's state law. Again, that's why it's important to retain experienced counsel if you've sustained significant injuries.

Finally, even if the health insurer can subrogate against the plaintiff's recovery, your lawyer can often negotiate a reduction in the subrogation amount on your behalf. 

If you or a loved one has suffered a severe or life-altering injury, contact Kane Trial Law in Castle Rock for a free consultation. 

Frequently Asked Questions

What is subrogation in a Colorado personal injury case?
Subrogation is the right of a health insurance company to seek reimbursement for medical bills it paid on your behalf if you later receive compensation from the at-fault party in a personal injury claim.

Do I have to repay my health insurance after a personal injury settlement?
In many cases, yes. If your health insurer paid for treatment related to the injury, it may seek reimbursement from your settlement. However, they can typically only recover the amount they actually paid, not the full billed amount.

When are medical bills paid in a Colorado injury claim?
Medical bills and subrogation claims are typically paid after a settlement or jury verdict. The funds are usually placed in the attorney's trust account, and the attorney distributes payments to insurers and medical providers before the client receives their portion.

What happens if my medical bills are higher than the available insurance coverage?
Colorado's Made Whole Doctrine may protect injured victims in some situations. If the available insurance does not fully compensate you for your injuries, certain insurers may be prevented from pursuing subrogation.

Can a lawyer reduce the amount owed in subrogation?
Often, yes. An experienced personal injury attorney can negotiate with insurance companies or medical providers to reduce the subrogation amount, helping maximize the compensation the injured person ultimately receives.