What Is the Point of Suing a Doctor If an Insurance Company Subrogates?

Subrogation of rights is when an insurance company asserts its right to collect money on payments it made on behalf of its insured. When your health insurer pays for medical treatment that occured as a result of malpractice, the insurer may recover its costs for your medical bills. However, subrogation is limited to payments made, and your actual damages may still warrant filing a lawsuit.

Subrogation for Payments Made

• Through the subrogation of rights clause, your insurer claims the right to recovery if any are owed. In a malpractice case, an insurance company retains the right to pursue recovery for payments that it makes to treat your medical condition caused by the doctor's malpractice. An insurance company retains the subrogation of rights only for payments actually made. Payments made by another party, including you or your employer, are not eligible for subrogation by an insurer.

Damages Beyond Payments Made

• In the event of a malpractice case, you may have financial damages beyond medical bills. If you miss work, are unable to return to work, have to buy special medical supplies, have to pay deductibles for prescriptions, or have other financial costs as a direct result of a doctor's negligence, you have a right to recover those costs. Additionally, some states give you the ability to recover for pain and suffering, loss of consortium or diminished value.

The Insurer Can't Subrogate Rights It Doesn't Have

• The important thing to remember about insurance subrogation is that an insurer can subrogate only rights that it retains. It can pursue recovery only for actual payments that it makes. In many cases, you have expenses above and beyond the cost of the medical bills an insurer has paid. You're still entitled to recover those costs on your own, regardless of an insurer's subrogation. If you file a medical malpractice lawsuit, you may receive a large settlement and be required to pay your insurer out of funds you receive, or your insurer may pursue the responsible party directly.

Medical Malpractice Subrogation Varies by State

• Medical malpractice subrogation laws vary significantly from state to state. Some states, such as California, don't permit subrogation at all in medical malpractice cases. Federal insurers, such as Medicare or Medicaid, may not fall under state laws and subrogation clauses may not apply to them. If you're considering suing a doctor, don't refrain because you think subrogation may prevent you from making a recovery. Consult a lawyer and find out what your state laws permit and whether you have additional damages high enough to make suing worthwhile.