Suppose you are injured in an auto accident caused by another driver. Your medical bills are paid in part by your auto insurance company (Medical Payments Coverage), and in part by your health insurance company. Both insurance companies will want to be reimbursed when you settle your claim against the driver at fault (or his/her insurance company). That is called subrogation. It essentially means that whoever paid your medical bills (or other losses) wants to be reimbursed when your case settles.
The above scenario is an example of contractual subrogation. There also is statutory subrogation: For example, if you are eligible for Medicaid or Medicare and get your bills paid that way, the state and federal government are entitled to subrogation by statute.
Regarding Medicaid subrogation, RC 5101.58 governs the state’s subrogation rights. If an injured party’s medical expenses are paid by Medicaid, the injured party must notify the Ohio Department of Job and Family Services that s/he is pursuing a claim against the third party tortfeasor. After attorney fees and case expenses are deducted from the settlement amount, the ODJFS is entitled to 1/2 of the remaining amount, or the actual amount of the benefits paid (whichever is less). Thus, as a general rule of thumb, you can expect to receive no less than about 1/3 of the settlement in these situations.
In Blue Cross & Blue Shield Mut. of Ohio v. Hrenko (1995), 72 Ohio St.3d 120, the Ohio Supreme Court held:
In Ohio, there are three distinct kinds of subrogation: legal, statutory, and conventional. Legal subrogation arises by operation of law and applies when one person is subrogated to certain rights of another so that the person is substituted in the place of the other and succeeds to the rights of the other person. State v. Jones (1980), 61 Ohio St.2d 99, 100-101. Statutory subrogation is a right that exists only against a wrongdoer. Conventional subrogation is premised on the contractual obligations of the parties, either express or implied. The focus of conventional subrogation is the agreement of the parties. Id. at 101.
This decision was authored by Justice Wright, and agreed to by Justices Moyer, Douglas, Sweeney, Pfeifer, and Cook; Justice Resnick concurred in judgment only. To my knowledge, no Ohio court prior to this recognized these three separate types of subrogation, and I have no idea where this definition of “statutory subrogation” came from (no citation is given). The Jones case referenced in Hrenko does distinguish betweeen legal/equitable subrogation and conventional/contractual subrogation, but I’m not sure where Justice Wright’s definition of “statutory subrogation” came from. Under most subrogation statutes, the statutory subrogee may assert a subrogation claim against both the tortfeasor and the claimant, which seems contrary to the definition provided in Hrenko.
Conclusion
A trial lawyer understands the law, and knows your rights. We often must challenge the subrogation liens when there isn’t enough liability insurance to pay the claims, and this is another way we can help you maximize your recovery in the event of an injury.
Jeffrey Beausay
