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Can an Injured Plaintiff Recover for Medical Costs Not Paid Out-of-Pocket?

When I have initial consultations with personal injury clients, many are confused about how their case is valued. One of the most common misconceptions is the rule for recovering medical expenses. Suppose Jane was injured by a reckless driver, requiring a hospitalization that cost $100,000. Jane’s health insurance covers her hospitalization. After Jane pays her deductible of $5,000, the hospital bills her health insurance provider $90,000, but because of a contractual arrangement between the insurer and the hospital, the hospital accepts a discounted payment of $70,000. So how much can Jane recover for medical expenses if she sues the negligent driver?

In this scenario, Jane generally has a right to recover from the defendant driver (or his liability insurance carrier) the full $100,000 gross cost of her hospitalization. Jane’s recovery vis-à-vis the defendant is not limited to what she paid out-of-pocket or otherwise affected by her health insurance coverage. However, Jane’s health insurer does have a right to receive some reimbursement out of Jane’s settlement or judgment, the extent of which depends on whether her health care plan is governed by federal or state law (an issue which will be addressed in a later article). Jane’s attorney should negotiate with the insurer to minimize this reimbursement amount, thereby maximizing Jane’s recovery.

Of course, in addition to recovering gross medical care costs, Jane also has a right to recover compensation for physical and mental pain and suffering, future medical care, lost wages, and other incidental expenses. If Jane has competent representation, and assuming the defendant has sufficient liability insurance or personal assets, Jane should be able to recover total damages far exceeding the $100,000 gross medical care costs.

Authored by Stacey A. Carroll, Esq.

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