How Medical Bills Can Affect Your Maryland Car Accident Settlement

You were hit by a careless driver. After your injuries healed, you contacted an attorney to help you recover your medical costs. Your attorney fights hard for you and gets you a generous settlement. But when you get the check, you’re shocked to see that the amount is much lower than you expected. 

Most people expect lawyers’ fees and other related costs to be deducted from their settlement. But many people are surprised to learn that their settlement funds can also be used to pay medical costs. 

This article defines concepts such as liens and subrogation and when they apply. It also discusses how these legal doctrines can affect your settlement. Finally, it explains how a Laurel personal injury attorney can help you maximize your settlement. 

How Maryland Car Accident Settlements Work

A settlement is an agreement between the parties that ends the claim or lawsuit. Nearly 95% of personal injury cases end with a settlement.

Settlement negotiations can start or end at any point. Sometimes, the other driver’s insurance company makes the first offer.  But generally, the process begins when your Laurel injury attorney sends the other driver’s insurer a demand letter that outlines your medical and other costs. If the insurance company doesn’t offer a settlement right away – or makes an unfair offer – your lawyer will eventually file a document called a complaint. The complaint starts your lawsuit. The settlement negotiations will continue. In fact, settlements can continue until trial. It’s not uncommon for cases to settle on the first day of trial or even after a jury verdict. 

Once your settlement is approved, you’ll need to understand the difference between a gross settlement and a net settlement. The gross settlement is the total amount that the other driver agreed to give you. The net settlement is what you take home after deductions such as attorneys’ fees. So, assume that your attorney agreed to take 33% of your settlement as their fee. If your gross settlement is $120,000, your net settlement will be roughly $80,000. 

How Medical Bills Affect Maryland Car Accident Settlements 

Medical bills make settlements more complicated. The average cost of treating a non-fatal car accident injury is $6620, but the numbers can soar above $80,000 depending on the injury. Most people don’t have tens of thousands of dollars lying around. So, when they get medical bills, they either: 

• Use their health insurance  
• Ask the hospital to cover their costs

Both options can provide important financial help to injured people. However, these hospitals and insurance companies will eventually want their money back. 

Hospital Liens 

A hospital lien occurs when a hospital provides care to a person injured by a third party (such as an at-fault driver) and seeks to recoup its costs. Liens are allowed under Section 16-601 of the Maryland Commercial Code. To create a lien, the hospital must follow specific steps outlined in the Commercial Code, including filing notice with the appropriate court and giving you proper notice. If the hospital takes the required steps, it will have the legal right to recover money it spent on your care to the extent allowed by the law. 

A lien can greatly reduce your net settlement amount. Going back to the earlier example, again, assume a $120,000 settlement and a  33% fee. This leaves $80,000. If your hospital has a $20,000 lien, you’ll end up with a net settlement of $60,000. 

Liens might seem scary, but Maryland law limits the hospital’s lien rights. Currently, hospital liens are capped at a maximum of 50% of your gross settlement. 

Subrogation

Subrogation becomes relevant when an insurance company has paid most of an injured person’s medical bills. Insurance companies pay for your care up front. But once they learn that the medical bills were caused by someone else, they’ll want to get their money back. This often means taking part in your settlement. It may seem unfair, but from their perspective, the settlement gives you money for medical bills that you never paid. As such, subrogation can also shrink your net settlement.

How an Attorney Can Help You Maximize Your Maryland Car Accident Settlement

Liens and subrogation can reduce your accident recovery, but an experienced Waldorf personal injury attorney can help you in several ways. Your attorney: 

• Can renegotiate and lower your medical bills 
• Can convince the insurers or the hospital to reduce their fees
• Negotiate to make sure that your net settlement is fair 
• Verify that the hospital followed the appropriate steps to create their lien and push back if they did not 
• Argue that the hospital’s fees were not “reasonable and necessary” as required by Maryland law 

As you can see, an attorney plays a vital role in ensuring that your entire settlement isn’t lost to medical bills. If you need help with medical bills or other issues after an accident and need a Laurel injury attorney, contact the Law Offices of Thomas E. Pyles. We’ll make sure that you get the compensation you’re entitled to under the law. lies. Call 301-705-5006 or use our online contact form to schedule a free consultation.