Know Your Subrogation Rights With MedPay and PIP

Subrogation recovery can be anything but straightforward, especially when cases involve MedPay and PIP. Given the complexities, our latest Ask a Pro webinar brought together a panel of subrogation experts who know the ins and outs of subrogation recovery, particularly in the states of Ohio, Pennsylvania, New Jersey, Indiana, Kentucky, and Michigan. Shareholder Tiffani Palmer and attorneys Michael Chapman and Thomas (Tom) Duquette discussed anti-subrogation laws, the key differences between PIP and MedPay, how to prove and settle injury subrogation claims and so much more. The panel was moderated by our firm’s Subrogation Group chairperson, Ted Traut. 
 

Watch the full webinar here.

Take a look at some of the top takeaways from this engaging webinar!

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What’s the difference between PIP and MedPay?

PIP is comprehensive coverage that goes beyond traditional medical bills to include housing, transportation, food, funeral, rehabilitation, guardianship, conservatorship, work loss services, and more. It is mandatory in most states where it's available. On the flip side, MedPay is usually optional and is designed to supplement standard liability coverage and covers only medical-related expenses. 
 

Fault vs. no-fault states: How do subrogation laws vary?

In a no-fault system, each party’s insurance company pays for their own medical expenses and other losses, regardless of who caused the accident. These laws aim to reduce the costs associated with resolving car accidents. There are 12 no-fault states in the U.S., although three of those are “choice no-fault” (i.e. Kentucky, New Jersey, and Pennsylvania). In these regions, it’s essential to carry PIP coverage as part of the automotive insurance policy. 

While traditional tort states typically allow for border compensation through the legal process, but require proving liability, no-fault states prioritize swift payouts for medical expenses through mandatory PIP coverage, aiming to reduce litigation and expedite recovery. However, this can sometimes limit compensation for more severe injuries unless certain conditions are met.

As with many nuances related to subrogation, the fault system at play impacts recovery chances. Having an experienced subrogation expert on your legal team is of the utmost importance.
 

What states have anti-subrogation provisions?

The Anti-Subrogation Rule is a common law defense to subrogation. It boils down to this: a subrogated insurance company cannot bring a subrogation action against or sue its own insured. Of course, it’s more complex than the previous statement due to the varying application across all 50 states in the U.S. 

The states of Arizona, Connecticut, Georgia, Kansas, Missouri, New York, New Jersey, North Carolina and Virginia do not allow subrogation, for the most part, although there are some exceptions. Some of the concessions to the law include federal medical benefits and military benefits. Other states have different rules that act as anti-subrogation rules. In Indiana, there is a rule where the insurance company cannot pursue a subrogation claim unless the insured party has filed a personal injury lawsuit.
 

Does my insured need to present a bodily injury claim before I subrogate for MedPay benefits?

Like other answers, it depends on your state. In Ohio, an insurance company can subrogate or seek reimbursement from a third party for amounts paid to an insured individual under MedPay coverage, even if the insured hasn't filed a bodily injury claim. However, the "Made Whole Doctrine" in Ohio (more on this later) may affect your subrogation rights.  

In Indiana, the insurance company loses the right to subrogate if and only if the insured pursues a personal injury claim. If they don’t pursue this claim, you can move forward with subrogation. If personal injury is filed, then you consolidate and put everyone on notice—the insured, the insured’s attorney, etc. 

In Kentucky, a carrier can subrogate against the tortfeasor's carrier without a bodily injury claim as long as the insured signs an affidavit stating they’ve been made whole. If the carrier can't get this information, they can resubmit the arbitration claim closer to the statute of limitations’ expiration date. Once the statute expires, the carrier has presumptive evidence that the insured has been made whole.
 

Do you need a medical expert in subrogation cases? 

Oftentimes, expert testimony is used to help a judge or jury understand complex or technical issues within the case. When it comes to subrogation claims, you may not need a medical expert if you only need to establish that medical bills were already paid or if have an adjuster’s testimony that authenticates business records. But, in more contested cases with complex issues (i.e. if you are contesting the injuries being caused by the automotive accident), you may need a medical expert’s opinion to establish injury timeline or the extent of the injury. 

An attorney will be able to advise whether or not you need a medical expert to testify for the case. 
 

What are the most common defenses to MedPay and PIP subrogation claims?

Typically, you need to demonstrate negligence in fault states. In no-fault states, you have to make sure you meet the requirements to have the subrogation right. For PIP states like Michigan, you need to demonstrate that the tortfeasor was uninsured to pursue subrogation. Another defense can be showing a debt has already been paid.

An uncommon defense, but one you may encounter, is the right of subrogation being waived by the insured. Sometimes, the insured settles a claim yet do not realize they’ve waived the right to subrogation.
 

What is the Made-Whole Doctrine?

Many states have a version of this doctrine but nearly all of them treat the doctrine different from one another. Like its name, the doctrine says that the policy holder needs to be “made whole” before the insurance company can take away any money from the insurance funds. The insurance company cannot reimburse itself for payments made to the insured. 

In Ohio, the Made-Whole Doctrine states that until the insured party is fully compensated, the subrogation right is diminished. However, there is always room for argument and negotiation. 

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Watch the full episode today.

To have more questions answered about subrogation recovery with MedPay and PIP, watch the entire webinar. If you want to speak with one of our attorneys to understand your rights or discuss an issue, contact Tiffani, Michael, Tom or Ted today.

This blog is not a solicitation for business, and it is not intended to constitute legal advice on specific matters, create an attorney-client relationship or be legally binding in any way.