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Navigating healthcare

By Diane L. Marolla, LICSW

What is Subrogation?

The world of health insurance has become complicated from when I first began my career in the health care field. When I first began my career, health insurance was typically provided free to individuals. The rules that a consumer had to follow seemed simple compared to what the rules are today. Of course, we all know that healthcare remains unaffordable. Out of pocket expenses for consumers continue to rise. Although I have never been a professional claims biller, I have been around claims payment issues for over 32 years both professionally and personally. I have learned more about why a healthcare claim will or will not pay than honestly, I care to know. With that said, I feel that with all this knowledge that I have accumulated about how a health care claim gets paid or why it might not get paid, that I will do what I can to share what I do know. Healthcare costs are burying people in this country. And if you think when you get sick or injured, your health care claims will automatically get paid because you have health insurance, you are wrong. Health insurance companies are in the business of trying to deny payment of claims. They are sophisticated and they are very difficult to fight once you do have a claim that you may be disputing.

Recently, I had dinner with two colleagues who I have known over the years, where we have become longtime friends. Because we all continue to work in the healthcare field, we naturally talk about healthcare and what is going on. As we were updating each other as to what is new, my friend and former colleague proceeded to talk about a subrogation issue she was dealing with. Coincidentally enough, I had dealt with the same issue regarding a healthcare claim that same day at my job at a local health center. Before I tell you what subrogation is, let me first explain what happened to my friend.

Last year, my friend slipped and fell outside of an establishment. After her fall, she needed emergency surgery. After her surgery, she had many hours of physical therapy. She also was prescribed medication. She also had many follow up visits with her doctors. My friend’s health insurance company paid thousands of dollars in claims related to this injury. My friend did pursue legal action because the fall and the injury were due to the negligence of the establishment. Because she was seriously injured, and still suffers long term issues as a result of this fall, she was awarded a monetary settlement. Her health insurance company found out that she received this money, therefore, they are taking from her monetary settlement all of the money they paid out to hospitals, doctor’s, pharmacies, and other health care professionals. Yes, they are taking it back. After reading this, you may say, this is not fair, but this is something that they can do and it is called subrogation.

What is subrogation? According to HRS (Healthcare Recovery Solutions), “subrogation is the recovery, from a third party, of medical costs that were originally paid by a benefits plan.” This means that if you are involved in an auto accident or a work related accident, or as in the case of my friend, a slip and fall, and your health insurance pays any cost related to such injuries, they can get the money back that they paid in medical claims. According to Healthcare Recovery Solutions “once those payments have been made, and your case is finished, your insurance company may be able to seek reimbursement for those medical payments made on your behalf.” Ultimately, your insurance company has a right to be “indemnified or paid back.” Simply stated, your health insurance company paid your bills, and they have the right to take the money back because you received a settlement.

And if you think your insurance company does not have the right to do this, think again. When you sign up for health insurance, you are agreeing to this when you sign on the dotted line. Health insurance companies are very savvy in mining data. They know everything about you as your information is shared to them through claims data and through your medical record. If you are saying that your health care providers do not have a “right” to share all this information, again, you are wrong. When a healthcare provider “contracts” with a health insurance plan, they also have to follow their rules which means if your health insurance company asks for your medical record, your healthcare provider has to give it to them.

My best advice to you is if you receive an injury either in a car accident, or at work, or if like my friend in an establishment, you should consult with an attorney on this topic. They will know the rules and will have your best interest in mind. Keep in mind, however, that the attorney will need to be paid as well.