Do You Have To Pay Your Medical Bills from a Personal Injury Settlement?

You always have a legal obligation to pay your bills. If you do not, you could receive letters and calls from collection agencies.

But medical bills are handled differently. Healthcare providers have an ethical duty to treat you regardless of your ability to pay. In exchange, healthcare providers and insurers have several tools at their disposal to collect their fees if you get injury compensation.

Here are some of the issues involved in answering the question, “do you have to pay your medical bills from a personal injury settlement?”

Personal Injury Settlements

Most accidents are covered by liability insurance. When an accident happens, the insurer for the party who caused the accident is liable for the damages from the accident.

The party’s liability coverage compensates accident victims injured in the accident. This compensation covers the victims’ economic and non-economic losses.

Economic losses include all of the financial costs of the injuries, including:

  • Medical bills for treatment, surgery, therapy, and medication
  • Lost income from missed work
  • Diminished earning capacity due to physical disabilities

To recover economic losses, you must prove that you incurred them and how much they cost you.

Non-economic losses include all of the ways your injuries diminished your quality of life, including:

  • Physical pain
  • Mental suffering
  • Inability to perform tasks
  • The inconvenience of being injured
  • Reduced enjoyment of life

A jury or claims adjuster can infer your non-economic losses based on the severity and duration of your injuries.

Do You Have to Pay Your Medical Bills from a Personal Injury Settlement?

The answer to this question has two parts. The first part of the answer addresses your legal and ethical duty to pay your medical bills. The second part of the answer addresses the tools healthcare providers use to force you to pay.

If you received a personal injury settlement, you received economic compensation based on your medical expenses. For example, suppose that you have $11,000 in medical bills and received an insurance settlement for $25,000. 

You only received $11,000 of your settlement because of the medical bills you submitted to the insurer. If someone else paid those bills, like your health insurance, or you leave those bills unpaid, you have been unjustly enriched.

You received valuable medical treatment. When you receive compensation based on the value of that medical treatment, you have both legal and ethical duties to use that compensation to pay for the medical treatment you received.

Tools Available to Healthcare Providers and Insurers

Rather than focusing on the question, “do you have to pay your medical bills from a personal injury settlement?” insurers, hospitals, and doctors focus on how they can get paid.

When you get injured in an accident, you have several paths to receive medical treatment, including:

Fee for Service

If you lack health insurance, you might get your medical services as an out-of-pocket, fee-for-service, or cash patient. When you obtain medical services this way, you usually get treatment and receive a bill for the services.

Fee-for-service patients can receive emergency treatment after an accident. The hospital will send a bill. If you do not pay the bill, your account will get sent to collections.

In California, a hospital can place a medical lien against your personal injury claim. If you receive a personal injury settlement, the hospital can collect on the lien from your settlement check. 

Typically, the hospital will notify your personal injury lawyer of your lien. Under California law, your lawyer is supposed to pay the lien first, then give you the remaining balance of your settlement.

Health Insurance

Many people rely on their health insurance to pay their medical bills after an accident. The drawback to using your health insurance is that you will probably need to pay a copay or meet a deductible before your health insurer pays any medical expenses. 

The benefit is that your healthcare providers will usually provide all of the treatment, surgery, therapy, and medication you need because they know your health insurer will pay.

California grants health insurers the ability to subrogate (seek reimbursement) if you receive compensation for medical expenses. The insurer must notify you of its intent to subrogate so you can dispute or negotiate any of the expenses.

Paying Your Medical Bills from Your Personal Injury Settlement

As you approach the end of your personal injury case, you should review any liens or notices of subrogation you have received with your lawyer. 

Many lawyers will help you negotiate the amounts you owe to your healthcare providers and insurers. This will keep more of your settlement in your hands for future medical expenses and other needs.

Since 1992, our personal injury attorneys at the Pines Salomon Injury Lawyers, LLP. have been fighting for the people of San Diego. Now, when those injured in automobile accidents – including car, truck, and motorcycle accidents – need financial help, or for the families that need to know that the loss of a loved one could have been prevented, there is a personal injury law firm in San Diego that is on their side. If you or a family member has been injured, call the lawyers at Pines Salomon Injury Lawyers, LLP. There’s never been a better time than right now to speak to a personal injury attorney—FREE of charge. Call us at 858-551-2090 or request a free consultation online today!