Generally speaking, when an individual is injured due to another’s negligence and requires medical treatment for the injury, medical expenses incurred by the injured person are recoverable from the negligent party as damages in a lawsuit. And, where those medical expenses are paid by a third party, such as a health insurance carrier, a Workers’ Compensation insurance carrier, or the state or federal government, as is often the case, the third party is entitled to assert a subrogation lien on the proceeds of the injured party’s lawsuit to, in essence, get reimbursed for those expenses by the negligent party. From a practical perspective, this makes sense. The person whose negligence necessitated the medical treatment should bear the cost of that treatment.
In the world of medical malpractice, however, the rules are a little different. Under the Pennsylvania Medical Care Availability and Reduction of Error Act (commonly referred to as “MCARE”), which was enacted in 2003, there is limit on what medical expenses are recoverable in a medical malpractice lawsuit. In a medical malpractice suit, in which it is alleged that injury was caused by negligence on the part of a physician or other medical provider, only medical expenses that were paid by a public or governmental benefit or source are recoverable. Typically, this means medical expenses paid by Medicare, Medicaid, or the Pennsylvania Department of Public Welfare. Medical expenses that were paid by a private source, such as an insurance company, are not recoverable and a private insurance company is not entitled to reimbursement by way of subrogation.
One area to be wary of is Medicare Advantage Plans, or Medicare Part C. Under these plans, the medical coverage is provided by a private company, but is funded by Medicare. The reason these are tricky is that it may appear from billing records that private health insurance covered the expenses; it might not be clear that coverage was under a Medicare Advantage Plan and would, thus, trigger a right to reimbursement out of the proceeds of the medical malpractice lawsuit.