Negotiating a settlement with an insurance company after an accident can be a long, tedious process. It’s exciting when your settlement case finally concludes and your long-awaited check arrives in the mail, but that excitement is often eclipsed by an immediate sense of worry.
Now that you have a check in hand, there are probably quite a few other interested parties waiting to get paid themselves.
As long as you’re working with an attorney, your lawyer should be able to help you prioritize who gets paid first. There is, after all, a certain pecking order to paying bills and debts after a settlement concludes.
Your attorney may even pay some of those parties on your behalf so you don’t have to worry about it (though that’s more out of a legal obligation than a professional courtesy). Still, it helps to understand who you’re obligated to pay after receiving your settlement, and in what order you’re expected to pay them under Arizona law.
Medical Bills and Liens
So, who pays for medical bills after a car accident in Arizona? While the party responsible for the accident is ultimately paying the bill through your settlement, it’s up to you to actually pay the bill when the funds come through.
Some people believe that the insurance company pays the hospital directly, but that’s a common misconception. Hospitals get paid by health insurance companies, but they don’t get paid by auto insurance companies.
The auto insurance company pays you, and you’re responsible for paying the hospital and other medical providers.
However, whether it’s your job to cut a check or your attorney’s job to pay them depends on another question: are there any health insurance liens attached to your personal injury settlement?
In Arizona, the law allows medical providers to file a lien against your insurance claim with the county recorder’s office — just as a creditor may place a lien against your house or other property for unpaid debts. This protects the medical provider’s right to collect unpaid medical bills so they don’t have to send the bills to a debt collector.
If one or more medical providers have filed a lien against your claim, their names may actually appear on the settlement check (along with your name and your attorney’s name). In this case, your attorney is obligated to pay them immediately upon cashing the check, before distributing the remaining funds to you.
That relieves you of the obligation to pay them directly, but keep in mind that only applies to the medical provider behind the lien. If you have any other medical bills that don’t apply to the lien, you must pay those bills as soon as possible when you receive your portion of the settlement check.
Legal Fees and Costs
Many people assume lawyers get paid before before medical bills, but it’s actually the other way around. Only after paying the outstanding medical bill liens against your case can they pay themselves and cover the firm’s expenses related to your case.
Personal injury attorneys usually work on a contingency fee of 20% – 50%, so they’ll take the appropriate amount based on your contract.
That may seem like a lot of money — especially now that you actually have a check with your name on it — but a higher contingency fee is excellent incentive for your attorney to get you as much money as possible. It also compensates them for the risk of potentially not getting paid should your settlement case fail.
As for legal costs, these are separate from the contingency fee and include court filing fees, courier services, paying expert witnesses, mediation costs, etc. Your attorney likely covered these expenses through their law firm, so a portion of your settlement will probably go to the firm to recoup those expenses. In some cases, they may actually cut a check to an outside party who agreed to bill for services and wait to be paid.
How Long Does it Take to Receive the Remaining Balance?
Now that everyone with a legal stake in your settlement has been paid, it’s your turn to take your piece of the pie. The total process from reaching a settlement agreement to getting your personal check may take anywhere from 2-6 weeks, but once all interested parties are paid it should be a matter of days for a direct deposit or wire transfer to your bank.
You could also request a check from your attorney if you don’t want to wait for electronic processing.
If you have any outstanding medical bills, now is the time to pay those. You don’t necessarily have a legal obligation to pay them immediately, but it’s generally a good idea to rip the bandaid off and clear the bills as soon as possible.
Doing so avoids the chance of unintentionally spending the money set aside for medical bills, stops the interest from accumulating on your outstanding bills, and prevents them from going to collections.
Once all outstanding bills have been paid, the amount left over represents your personal damages in the case. This includes lost income, pain and suffering, etc. This money is intended for you, so it’s up to you do decide how to use it.
Negotiating Medical Bills After a Settlement
Most personal injury attorneys recommend negotiating with medical providers before you reach a settlement, not after. This is especially true in Arizona, where medical providers can file a lien against your case.
You can’t negotiate a lien amount once your attorney has the settlement check in hand, so it’s critical to negotiate a lower amount before reaching a settlement agreement.
If the medical provider hasn’t filed a lien against your case, you can technically wait until after the settlement but it’s still a good idea to start negotiating beforehand. Oftentimes, a simple phone call early in the process can save you a lot of money in interest and collection fees.
When you’re ready to pay the bill, many medical providers offer a discount for paying the balance in a lump sum payment. Otherwise, you can negotiate to pay the full amount on a payment plan over a set period of time.
Keep in mind, though, that your health insurance should cover the majority of your car accident injuries. So, are only responsible for medical bills after your insurance pays their portion.
Receive Help With a Personal Injury Lawsuit in Arizona
If you are injured in a car accident in Arizona, filing a personal injury lawsuit with an experienced attorney will not only help cover your medical expenses, but gain you extra compensation for lost income, lost wages and pain and suffering. Our personal injury team offers several different personal injury services and specializes in helping Arizona car accident victims.
Call our Personal Injury team at (480) 467-4392 to discuss your case today.