How do I properly handle medical bills and health insurance subrogation claims during a California personal injury case?

To properly handle medical bills and subrogation, you must track all costs, notify your insurer of the claim, and negotiate a reduced reimbursement amount from your settlement based on specific California laws. Here is a step-by-step guide to managing this process: Step 1: Track All Medical Costs From the day of your injury, keep a complete file of every medical bill, prescription receipt, and Explanation of Benefits (EOB) from your health insurer. These documents are essential to prove the value of your medical damages. Step 2: Notify Your Health Insurer Formally notify your health insurance provider in writing that you are pursuing a personal injury claim. They will then send you a notice of their subrogation interest, which is their right to be reimbursed for the bills they paid on your behalf. Step 3: Calculate Your Recoverable Damages In California, you can only recover the amount that was actually paid or is still owed for your medical care, not the initial, higher amount that was billed by the provider. Review your EOBs to see the amounts your insurer actually paid. Step 4: Negotiate the Insurance Subrogation Claim Once you have a settlement offer, you must negotiate with your insurer to reduce their reimbursement claim. Under California Civil Code Section 3040, if you are represented by an attorney, your insurer's recovery is limited to one-third of your total settlement. Their claim must also be reduced to account for their share of your attorney's fees and costs (the "common fund doctrine"). Step 5: Resolve Hospital Liens If you received emergency care, the hospital may place a lien on your settlement under California’s Hospital Lien Act. This lien is separate from your health insurer's claim and must also be negotiated and paid directly from the settlement proceeds. Important considerations: Always get the final, negotiated reimbursement amount in writing from the insurer or hospital before you pay them. This document is called a final lien release. Do not finalize your settlement until all subrogation claims and liens are resolved. Warnings and limitations: Ignoring a valid subrogation claim can lead to your health insurer suing you. Health plans governed by federal laws, such as ERISA, Medicare, and Medi-Cal, are not bound by California's reduction laws and have much stronger reimbursement rights. These cases are significantly more complex. This is general information and does not constitute legal advice. For complex situations, especially those involving large medical bills or federally-funded insurance plans, consult with a qualified California attorney.