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Subrogation. Reimbursement. What do these concepts mean for personal injury cases? When you suffer a personal injury, your health insurer (or plan) pays your medical bills. For many people in Alabama, this means Blue Cross. It may also mean government programs like Medicare, Medicaid or Tricare. These health plans pay your bills. But, they usually have rights to recover their payments from your personal injury settlement. Their rights vary between private and government plans. I’ve addressed that issue in other articles.

The legal issues can be complex. And, understanding the rules (which differ between private and government plans) can make a huge difference in how much money you actually keep. This is an area where a skilled lawyer can really help you save money and maximize your final recovery.

What about wrongful death cases? Do health plans and programs have rights to reimbursement from wrongful death settlements? Does Medicare have reimbursement rights in Alabama wrongful death cases? I mention Medicare specifically because it covers so many people and also carries the weight of the government. While these insurers and plans do have reimbursement rights in personal injury claims, they don’t have the same rights in wrongful death claims.

Many attorneys do not understand these issues. Many attorneys do not understand the differences between a case claiming an injury versus a case claiming a death. Their clients can pay a big price for that lack of understanding.

I’ll give you an example. Recently, a local Huntsville attorney called to discuss a wrongful death cases he settled. During the discussion, he mentioned that he reimbursed Medicare for medical bills it paid related to the death. He paid Medicare a huge chunk of his client’s settlement! I wish we had spoken before he settled the case. He could have saved his client that money.

In Alabama, wrongful death claims are very different from normal personal injury claims. In a normal personal injury case, compensatory damages are recoverable. Compensatory damages include medical costs. So, health insurers and plans have specific rights to be reimbursed out of the recovery. A wrongful death claim is different in Alabama. Alabama wrongful death law is unique. By unique, I mean different from other states. In other states, compensatory damages are also recoverable in wrongful death cases. Those compensatory damages include medical costs related to the accident causing the death. Not so in Alabama! In Alabama, ONLY punitive damages are recoverable in wrongful death cases.

The issue of wrongful death damages in Alabama has been debated for years. I’m not writing today to argue the pros or cons of our law. Whether you agree with this limit on recoverable damages in Alabama, it is the current law. Compensatory damages are NOT recoverable for a wrongful death claim in Alabama. So, your family cannot claim damages for things like the deceased’s medical costs or lost wages.

The unique nature of Alabama law creates many issues. No compensatory damages means no recovery for the lost income provided by a sole breadwinner to his or her family. That’s a big negative. But, it also generally means the plans and insurers who paid final medical bills have NO rights against the money recovered. That often means Medicare. In many serious and fatal accidents, the final medical bills can be huge.

In this post, I’ve mentioned Medicare much more than private plans like Blue Cross. Why? Medicare is a Federal government program. A private plan must follow state law. Since Medicare is a Federal program, can it simply overrule state law issues? No. Not necessarily. Medicare must consider what damages are actually recoverable under state law. That is the current law. I addressed this issue in a prior post titled A Federal Court Limits Medicare’s Reimbursement Rights. You can find that prior article on this blog. It provides additional information on this issue. If you cannot recover for the deceased’s medical costs, then these health programs should not have any right to reimbursement from your settlement.

Subrogation and reimbursement rights related to medical bills are a huge issue in personal injury litigation. Right here in Huntsville, we have advertising attorneys on television and billboards begging you to call. If you are hurt in a wreck, they want your case and they promise quick money. Through the years, I’ve heard countless horror stories of personal injury and wrongful death cases these settlement mill lawyers quickly settled but failed to really help their clients. These settlement mill lawyers often take a quick settlement that could have been much, much higher with some real work. Then, these settlement mill lawyers often close the book on the case too quickly instead of working to reduce or eliminate subrogation / reimbursement claims. They just pay these claims from your settlement money, often without question. It’s all about high volume and quick settlements. You deserve better. At the end of the day, the clients at these billboard firms often receive far, far less.

If you have a personal injury claim yourself or a wrongful death claim for a family member, these issues are important. In Alabama wrongful death cases, the unique nature of damages (punitive only) changes everything. For a skilled attorney, this changes the way the case is prepared, the way the client’s story is presented, and the way recovered proceeds are handled.

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From its office in Huntsville, the Blackwell Law Firm handles serious personal injury and wrongful death claims across Alabama. On our website and blog, we have numerous articles discussing Alabama wrongful death law. We are happy to answer your questions. Consultations are always free and confidential.