How To Avoid Subrogation Pain


Subrogation is an equitable doctrine in Maryland and nationwide to prevent unjust enrichment by ensuring reimbursement and relief against loss and damage to a creditor who has paid the debt of another. For instance, if you were injured in an accident and a party other than the at fault party paid for your medical bills - example your health insurance - that party can pursue you for a reimbursement of the actual amount of money they paid out to settle your medical bills. Hence, subrogation serves as an exception to the collateral source rule.


The reasoning behind this legal theory of subrogation is to discourage getting paid twice for the same medical bill resulting from an accident - keep in mind that the at fault insurance company makes a settlement offer partly on the basis of medical expenses incurred. Further, the public policy justification for this theory is to control / reduce the actual cost of healthcare by discouraging 'double dipping'. Therefore, Maryland law requires the 'victim' to reimburse or compensate the insurance company for the money that they spent.


So is there a solution or do you simply turn over all or part of your share of settlement money to your health insurance? The good news is in most cases your health insurer or their subrogation agent are usually willing to negotiate a reduction of amounts owed and accept an amount much lower than the final bill. There are no hard or fast rules but typically reductions of 30% to 40% are common and in extreme cases where you are able to show financial hardship, you may be able to obtain a higher reduction amount. In any event, we are experienced in dealing with subrogation related matters, hence for additional information contact us for a free consultation.