It's Insurance, Why Do I Have to Pay It Back? Subrogation By Health Insurers In Charleston, SC Personal Injury Cases.

Posted by Jay McMillian | Dec 11, 2017 | 0 Comments


It all starts innocently enough . . . you walking down of your local grocery store . . . or you are walking down a set of brick steps at someone else's home and . . . BAM! You hit a spill on the floor that you didn't see or you step on a loose brick and .  . . 3 seconds later you are sprawled on the ground with a broken leg or a fractured wrist. Ok, you do what any normal person would do if they have health insurance, you go the ER for treatment, you go to follow up visits for therapy and to have the cast removed. At each visit you verify your health insurance, probably Blue Cross Blue Shield or United Health Care, and youmake your co-pay and go about your business. In the back of your mind you don't let it bother you because you know that you will make a claim against the negligent party for your injuries and that eventually, they will be paying these medical bills.

You go and visit your competent Charleston, SC personal injury attorney. He is able to conclude that the 3rd party is negligent and you have a case. You are feeling great knowing that a settlement will be coming to compensate you for all your bills and your pain and suffering. Then your attorney ask you about any health insurance you may have and if they have paid for any services. You tell the attorney that you do have insurance and that they did pay some of your bills for treatment. THIS IS WHERE YOU ARE INTRODUCED TO THE WONDERFUL WORLD OF SUBROGATION!!

The McMillian Law Firm is known for compassionate and effective legal representation. Call us now at (843) 900-1306 or use the online form to schedule your free no-obligation case evaluation today.


Subrogation is the right of a third party – usually a health insurance company, or a federal program like Medicare and Medicaid – to be reimbursed money paid to or on behalf of an injured person from any amount the injured party received from the negligent party through settlement or a judgment.  Subrogation is based on the theory that an injured person should not recover twice for a single injury. The insurance company that fronted the money to pay for medical services for the injured party should be reimbursed for payments for these payments by the negligent 3rd party.  The "3rd Party" provides this reimbursement not directly but most often through the "recovery" of the injured party through the liability insurance of the 3rd party. In other words, the party responsible for causing your injury pays your health insurance company back through your settlement or award.

Health insurance policies include subrogation clauses that require you to reimburse the insurer for amounts they spent to cover medical costs to treat the injuries caused by the 3rd party.  Buried in the insurance policy are terms that require the injured person cooperate with the insurer, furnish information concerning the personal injury claim, and notify the insurer before filing suit or settling any claim.


If you suffer a personal injury caused by another party, and receive medical treatment that is paid for by your health insurance company they are going to send you a Notice of Subrogation.  The Notice will request that you send all information concerning the injury, including where it occurred, whom may be responsible, and if there is any available liability insurance on the party who caused the injury. In addition to the First Notice of Subrogation, your health insurer will send a second Notice of Subrogation that will state the amount paid by the insurer and a specific claim for that amount.  This notice is commonly provided to the insurance company for the responsible party.


In cases where there is limited liability insurance available to collect against, and the injured party has medical bills that push up to or exceed the available insurance that can be collected, the services of an experienced personal injury attorney become invaluable. When it is the appropriate time to reimburse your health insurer for the medical bills they have paid, your personal injury attorney should make the time and effort to negotiate a reduced repayment amount. In negotiating a reduced repayment to the health insurance provider, your attorney can at the very least make sure that all the bills are paid and that you come out of the ordeal without facing any future debts related to the accident. A very successful negotiation may even provide you with a modicum of compensation for your pain and suffering. 


In South Carolina, health insurance companies have addressed their position on subrogation through their policies, so that contract law is applicable to the enforcement of subrogation clauses. South Carolina courts have also recognized the doctrine of "equitable subrogation." This means that if an insurer satisfies the common law elements required for an authorized payment on your behalf, it can pursue subrogation rights even if it has not been agreed to in contract.

However, it is important to note that South Carolina Courts have been reluctant to allow health insurance companies to collect repayment through "equitable subrogation." Always check your health insurance policy to see if there is a subrogation clause. If there is not one, it is very likely that you may not have to reimburse your health insurance provider. 

South Carolina courts will also apply the “common fund” doctrine. This requires a health insurer asserting subrogation to pay a pro rata share of the attorney's fees and expenses incurred to obtain the settlement or judgment. In other words, the health insurance must take a discount on its subrogation claim in order to help pay for the personal injury attorney who secured your settlement or award from the at-fault 3rd party.  This is helpful in two ways . . . of course #1: it means your attorney gets paid, and #2, this amount is deducted off the top of the settlement and thus reduces the available amount of your settlement that can be used to satisfy the subrogation claim.  


If you have health insurance provided for by the Federal Government, either through Tri-Care, Medicare, Medicaid, or you are employed by a federal agency, your subrogation issues will be governed by Federal Law. In most cases, Federal law requires a full reimbursement of any monies paid on behalf of the insured as a result of 3rd party negligence. However, it is still recommended to have a personal injury attorney contact the proper channels and attempt to negotiate a settlement on these liens so that you can receive a larger portion of your damages award. 


Contact Jay McMillian at The McMillian Law Firm. Once you have obtained legal representation on your matter, the insurance company must cease direct contact and deal with your lawyer instead. Contact me as soon as possible so that I may conduct a site visit of the accident and begin to obtain witness statements, police reports, and all relevant materials I need to build your case towards an acceptable settlement or trial. 

It is never too early to contact me! Each and every day is a day the insurance company will try and short-change your claim. I am available for home visits, hospital visits, nights and weekends, just let me know what works for you. 

If you have been involved in a car accident and live in Charleston, Mt. Pleasant, North Charleston, Summerville, James Island, Johns Island, West Ashley, Goose Creek, Moncks Corner, Walterboro, Folly Beach, or any of the other fine communities of the South Carolina Low Country, contact The McMillian Law Firm now!! 843-900-1306 or email at [email protected]

About the Author

Jay McMillian

Background I chose to build my law practice in the areas of Car Accident and Personal Injury because these areas of the law are the most accurate reflection of my values and my upbringing. Being the son of a breakfast hostess and a retired US Army Sargent turned construction worker, the values instilled upon me by my par...


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The McMillian Law Firm

Attorney Jay McMillian operates a solo practice with an emphasis on two core principles. First, to provide competent legal advice in the areas of Auto Accident and Personal Injury Law to the people he is proudest to serve, the people of the South Carolina Low Country. Second, to provide the most personal and intimate service to each and every client and give them the attention and compassion that they deserve while going through the stress and strain of negotiating or litigating an injury claim. If you live in Charleston, Summerville, Mount Pleasant, Goose Creek, James Island, Walterboro, Moncks Corner, and you or someone you love has been injured by the negligence of another, please call Jay at The McMillian Law Firm today.

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