The True Cost of Medical Expenses in Personal Injury Settlements

Thinking about what you’re going to do with all the money? If not, then you’re doing it wrong.

Medical expenses can be some of the most overwhelming aspects of a personal injury case. Injury victims face mountains of bills while waiting months and years for their case to settle. It’s a situation no one enters with eyes wide open.

There are a few problems with this reality:

• Many injury victims accept settlements without a full understanding of medical costs and liabilities. This leads to surprises and much less take-home money.
• Many injury victims don’t understand the medical-legal process at all and have no idea what’s coming.
• Without planning and guidance, medical costs can and do swallow up entire settlements.

When you don’t plan for it, medical expenses can eat up the entirety of your settlement.

The good news is that with some insight into the medical side of things, you can ensure that you account for every last expense and walk away with thousands more. This is why partnering with seasoned and established personal injury lawyers from the onset of your case is a must.

In this guide, we’ll cover everything you need to know about medical expenses in a personal injury case.

What You’ll Learn:

• The ins and outs of medical expenses and their impact on personal injury settlements
• The specific process of how medical bills are addressed in a settlement
• The additional hidden costs most people forget or are unaware of
• Proven strategies to ensure that as much of your settlement money as possible is in your pocket

Understanding Medical Expenses in Settlements

Medical expenses typically make up the core of any personal injury settlement.

Here’s how to think about it. Medical bills serve two functions in a personal injury claim. First, they help to establish treatment costs. Second, they help to establish the severity of your injuries in the eyes of insurance companies.

Here’s the secret that most folks don’t know…

Medical expenses are often the second-most important factor in calculating your case’s value, right behind the injuries you’ve been diagnosed with. That’s because these costs show exactly how much medical care you needed and how bad your situation truly was.

In fact, according to recent industry data, medical records themselves are the single biggest expense category in personal injury claims. Once you start thinking about it, that makes perfect sense.

Your medical expenses can include:

• ER visits and hospital stays
• Surgeries and follow-up treatments
• PT/Physical Therapy/rehabilitation
• Prescriptions
• Testing (MRI, CT scans, etc.)
• Ongoing future medical treatment

Accounting for past and future expenses is the tricky part. Past expenses are easy because you’ve already got the receipts. Projecting future expenses requires an eye on your prognosis and estimated recovery timeline.

How Medical Bills Get Paid From Your Settlement

Medical bills don’t vanish into thin air when your case settles. There’s a specific process that impacts how much of your settlement money you actually get to keep.

Let me explain…

Your total settlement amount is supposed to account for medical expenses, lost wages, pain and suffering, and other damages. But before you see a penny, any outstanding medical expenses need to be dealt with first.

Healthcare providers and insurance companies often have liens on your settlement. A lien is basically a legal claim that they get paid back for the services they provided during your case.

These liens can come from a variety of sources. Hospitals and doctors you were treated by on lien may also have a lien with an expectation that they’ll be paid directly out of your settlement. Your health insurance company will have subrogation rights to seek reimbursement for what they paid out during treatment.

Negotiating down your medical liens is one of the most important steps to ensuring that you get to keep as much of your settlement as possible.

The average attorney will take the bills at face value. This means if you have $100,000 in medical bills, you’re likely to pay that exact amount (or slightly more with interest and administrative fees). But experienced medical lien negotiators can drive that bill down to $70k or less.

That difference ends up in your pocket rather than paying exorbitant bills.

The Hidden Costs Most People Miss

Most personal injury victims account for the obvious medical expenses like hospital stays and doctor bills. But there are hidden expenses that can quickly eat into your financial recovery if you don’t account for them.

Here’s what most people miss:

• Transportation costs for medical appointments pile up quickly and are frequently forgotten. Keeping track of mileage and rideshare expenses is worth the effort.
• Medications, medical supplies, and other over-the-counter treatments are seldom documented accurately.
• Home modifications for ongoing injury needs may be necessary but often not included in initial settlement projections.

Future medical expenses are another area that can trip people up. If your injuries require ongoing or future treatment, you must project those costs into the future before you settle. You can’t go back for more money after signing a settlement agreement.

This is where things like life-care planning can come into play. Medical experts evaluate your condition and estimate the necessary future care. This documentation helps ensure that you account for every last expense before settling.

Approximately 95% of personal injury cases settle before reaching trial. That means your negotiation skills and documentation determine your results. Settling a case too early or without accounting for all expenses is an incredibly expensive mistake to make.

Strategies To Protect Your Compensation

Protecting your settlement and medical compensation from being swallowed up by medical bills requires a plan and attention to detail.

Start keeping meticulous records.

Document every single expense related to your injury. This includes the expected, like medical bills, and the subtle, like parking costs at your doctor’s office. Keep a pain journal documenting your pain levels, emotional state, and how injuries are impacting your ability to work and live life. This subjective information can be invaluable in the case of non-economic damages.

Know what your health insurance covers.

Review what your insurance policy says about accidents and injury settlements. Some policies have specific language that impacts how settlements are handled. If your insurance company paid significant treatment costs, the at-fault party’s insurance may only be liable for what you owe on the tail end.

Never accept a settlement offer until your medical costs are completely understood.

Insurance companies are experts at convincing victims to take early settlement offers. Settling before you have a full understanding of your medical prognosis can leave you on the hook for later bills.

Partner with a law firm that understands the process.

There are so many moving parts when it comes to medical expenses in a personal injury case. Everything from medical lien law to negotiating with healthcare providers to understanding your insurance policy and settlement documentation must be coordinated correctly.

Wrapping It Up

Navigating medical expenses and making sure they don’t leave you with nothing is all about planning and understanding the process. These costs form the basis of your settlement value and play a critical role in how much of that value you actually receive in your pocket.

Don’t make the mistake of not planning for it. By understanding what medical bills are going to do in a personal injury case, you can plan for every last expense, make sure every last penny of the settlement money that should be in your pocket is there, and leave with thousands more.

It’s not just about winning a settlement. It’s about making sure that settlement is worth the fight.