Subrogation. Reimbursement. What do these concepts mean for personal injury cases? At its most basic, these concepts mean your health insurance carrier (or government plan) has certain rights to be “paid back” if you win or settle your case. While it sounds simple, the issues can be complex. And, an understanding of the rules can make a huge difference in your case.

Yet, many attorneys do not fully understand these issues. Some of these attorneys even advertise for personal injury cases. Their clients can pay a big price for that lack of understanding.

Case in point — A local attorney was recently discussing a wrongful death case he settled. During the discussion, he mentioned his reimbursement to Medicare for medical bills it paid. I wish we could have spoken before he settled. He could have saved his client that money.

In Alabama, wrongful death claims are very different from normal personal injury claims. If a lawsuit is only filed after a person’s death in Alabama, our law only allows punitive damages. Our law does not allow compensatory damages, which includes recovery for medical costs, for wrongful death. Since a wrongful death claim does not involve a recovery for medical costs, you should not be required to “pay back” the health insurance company or plan.

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. The local attorney relating his recent wrongful death settlement was not alone in his lack of understanding. If he had understood these issues, his client’s settlement would have been much better.