Do Medical Bills Come Out of the Pain-and-Suffering Part of a Georgia Settlement?

Attorney Answer

A settlement is not usually split into a medical portion and a pain-and-suffering portion. It is one sum, and your lawyer pays certain things out of it before you receive the rest. Your unpaid medical bills are among them. Georgia law limits who can take what from that sum, and two rules are worth knowing before you sign anything: how provider liens work, and when a health plan can be repaid.

What comes out, in general. From the gross amount, your lawyer's fee and case expenses come off under your fee agreement. Then come any valid medical liens, any health-plan reimbursement the law allows, and any medical bills still owed. What is left is yours. Your lawyer should give you a written settlement statement showing each item before you sign the release.

Provider liens. A hospital or medical practice that treated you can hold a lien, but it attaches to your claim, not to you. O.C.G.A. § 44-14-470(b):

The lien provided for in this subsection is only a lien against such causes of action and shall not be a lien against such injured person, such legal representative, or any other property or assets of such persons and shall not be evidence of such person’s failure to pay a debt.

The lien has to be perfected by notice and filing within set times, and under O.C.G.A. § 44-14-471(c) it is not enforceable at all unless the provider first billed your health insurance and was turned down.

Health-plan reimbursement: the made-whole rule. If your health insurance paid medical bills, it may ask to be repaid from the settlement, but Georgia limits that. O.C.G.A. § 33-24-56.1(b):

(b) In the event of recovery for personal injury from a third party by or on behalf of a person for whom any benefit provider has paid medical expenses or disability benefits, the benefit provider for the person injured may require reimbursement from the injured party of benefits it has paid on account of the injury, up to the amount allocated to those categories of damages in the settlement documents or judgment, if:

(1) The amount of the recovery exceeds the sum of all economic and noneconomic losses incurred as a result of the injury, exclusive of losses for which reimbursement may be sought under this Code section; and

(2) The amount of the reimbursement claim is reduced by the pro rata amount of the attorney’s fees and expenses of litigation incurred by the injured party in bringing the claim.

In plain terms, the plan is repaid only if the settlement more than covers all your losses, and its share is cut by its part of your attorney's fees. Some employer plans are governed by federal law instead. Your lawyer will know which applies to yours.

If $25,000 is not enough. If that figure is the other driver's policy limit and your losses are larger, ask your lawyer whether your own uninsured or underinsured motorist coverage can add to it before you sign a release.

What you can do

1. Ask your lawyer for a written settlement statement listing the fee, expenses, liens, reimbursements and the net to you, before signing.

2. Ask which medical bills are being paid from the settlement and which you will still owe.

3. Ask whether any health-plan reimbursement claim meets the conditions in O.C.G.A. § 33-24-56.1(b).

4. Ask whether underinsured motorist coverage on your own policy applies.

⏱ Time limits apply. If the claim is not finally resolved, the deadline for a lawsuit for your injuries is two years under O.C.G.A. § 9-3-33, which provides that “actions for injuries to the person shall be brought within two years after the right of action accrues”. Your lawyer will be tracking it.