When do I get my part of the settlement? How long does the process take? Does it matter if I have an attorney? These are questions asked by every client and by callers who have not hired an attorney. These are good questions but the answers are not as simple as hard and fast time tables and deadlines. Each case is different. The insurance companies issuing the checks have different procedures and policies. The medical providers don’t bill the same and don’t use the same methods to collect payment for services provided to injured victims. If you have Medicare, Medicaid, State Health Insurance, employer provided health insurance or privately purchased health insurance, then the process can take longer to determine what medical providers are owed and what , if any, has to be paid to any health plans.
I have accepted the offer
Once the offer from the insurance company is accepted the process to getting your settlement money in your pocket has started. However, it can be a long process and it is very important to remember that the insurance company must issue the check before your attorney can do anything with it. At this point, Riddle and Brantley reminds our clients of 3 important steps:
1) The insurance company must issue your check and mail it to us. Sometimes the insurance company requires the client’s execution of the release before issuing the check. If this happens, we try to get our client in as soon as we receive the release so it can be executed and returned to the insurance company. Once the release is signed, it may still take a few days for the insurance company to mail the settlement check to us. In some cases we have waited a few weeks to get the check because the insurance company delays its processing. In a lot cases, the insurance sends the check along with the release so we can deposit the settlement funds into your trust account once you have executed the release. This will result in a quicker time frame for you to get your part of the settlement.
2) Your settlement check must then clear the bank. What does this mean and why? Just because we have a check does not mean you have your money. First, once you endorse the settlement check, your funds will be placed into a trust account with our bank. Banks require that the check must be good before they will issue funds to you from it. This is referred to as the “check clears the bank.” Once this happens then we can issue payments to those receiving funds from the settlement, including you. We have our trust account with First Citizens Bank and it requires our funds to be held for 7 business days to insure that the check is good and has cleared. We apologize for this delay but it is required. The NC State Bar also requires that we not release funds held in our trust account until the funds have cleared. In some cases we need to wait more than seven business days but this is rare. We understand that this holding requirement does not seem fair but it is necessary to prevent writing bad checks on your account.
3) Determine what is owed to those claiming liens on your settlement funds or claiming reimbursement. Medical providers, health insurance companies, and even child support offices may claim that they are owed funds from your settlement.
a) Medical providers.
- Do I have to pay medical providers from my settlement? The answer is yes in most situations but is determined by whether the provider has a lien.
- Lien. Your doctors or medical providers (for example ambulance bill or bill for x-rays) have lawful liens if they provide records to us as your attorney free of charge. This will act like a lien on your settlement like a bank has a lien on the title to your car.
- No Lien. If your medical providers charged us for your records then they do not have a lien. This means we don’t have to pay those that charged for copying records to us from your settlement. This does not mean that you don’t owe the bill. It simply means that we don’t have to pay the bill from your settlement. We recommend paying all of your bills even those medical providers that charged for records.
Prorate my settlement between medical providers, attorney’s fees and my portion. In some cases the settlement is not sufficient to pay the medical providers and attorneys so that you get a fair amount in your pocket. When our clients are confronted with this situation we can consider a distribution of the settlement based on pro-ration which is permitted by North Carolina Statute 42-50. Under this law we pay 1/3 of the settlement to your medical providers that have a lien (divided based on proration), 1/3 of the amount to your attorney, and 1/3 to you. This may not pay all of your medical bills but it will ensure that you receive some funds and at least 1/3 of the settlement. We don’t necessarily recommend proration division except in extreme circumstances but it is there for your protection so that you receive something.
b) Medicare, Medicaid, and State Health Insurance. If Medicare, Medicaid or the North Carolina State Health Plan has paid your medical bills, then we must contact these entities and work out the amount that must be reimbursed to them for payment of your bills. This is not discretionary, it is required. Unfortunately, this will delay the date that you receive your funds. We cannot disburse funds until we know these amounts and in most cases we cannot get these amounts until we have notified these entities that your case has indeed settled. There is no set time frame for obtaining the amounts owed but we do everything possible to get the amount determined as soon as possible after settlement of your case. Sometimes the delay is a few days and sometimes it is weeks. We understand that this is frustrating but even if you have no attorney and settle your case, the insurance company will not issue checks until these amounts are determined.
In some cases, the amount we get from Medicare, Medicaid and the State Health Plan is just plain wrong. If this occurs, our clients want us to get the correct amount so as to avoid over payment. We are experienced in handling objections to the amounts proposed by these groups and we know how to appeal the contested amounts even against Medicare. The appeals process can drag out but it also protects you from overpayment. Most importantly if you have an attorney, these amounts can be negotiated down.
c) Health Insurance Plans. Some health insurance plans are trying to recover from your settlement funds the amounts they paid on your related medical bills. Whether you have to reimburse your health carrier depends on what type of plan you have.
If your employer provides your health insurance through a self-funded ERISA approved plan, then we may have to reimburse the plan. These are normally only associated with large companies that have self-funded or multi-employer grouped plans. Usually these amounts can be negotiated down if you have an attorney. We know how to handle these claims for reimbursement and we can help you determine if the plan has the right to make the claim against your settlement. This can be a very important part of your case if the plan is trying to claim reimbursement and your amount of settlement is limited because of the amount of coverage available under the at fault party’s insurance policy. Most importantly, just because a health plan claims status as a self-funded ERISA plan does not mean that it legally has this status. As with other claims for part of your settlement funds, this issue can delay your receipt of your funds but it is vital that you don’t pay what you don’t owe.
Private Health Insurance
If you have private health insurance and you pay the premiums, then we take the position that you don’t have to re-pay these claims. There is a North Carolina Insurance ruling that says that these types of policies may not claim reimbursement. We know this rule and we stop the attempt in its tracks.
d) Child Support. If you owe back child support then the county or even state where the arrearage is due may send notice of your arrearage to us in writing. If this happens and we are notified, then we must pay the amount. There is no exception. Failure to pay the amount could create some real issues for you, including being put in jail for failure to follow orders of the court. Remember, the only way the clerk or court knows about your accident is because you most likely informed the authorities collecting your support in an effort to explain why you have not paid and how you intend to use your settlement to pay in the future.
e) Lastly your attorney’s fees and advanced costs must be paid. In most cases, attorney’s fees are 1/3 of the total settlement but depending upon the type and complexity of your case, the fees may be 25% or even 40%. These fees are contingent upon getting settlement offers or winning at trial too. However, costs are required to be reimbursed to the attorney, win or lose.
What if you don’t have an attorney?
Even if you don’t have an attorney the process for getting your money will take some time. First, you have to come to an agreement or settlement with the insurance company. Second, the insurance company will not issue payment until you have executed and returned a release of your claim for the agreed upon amount and terms. Then the adjuster handling your claim must verify all medical providers including Medicare, Medicaid, and all health plans before issuing a check to you. This process will take some time too. Once the adjuster issues your check, your bank will still hold the funds until the check has cleared. Sometimes this takes as long as ten days.
Risks of not having an attorney
If you don’t have an attorney there is a lot of room for error and mistakes in dividing the proceeds from your settlement. The insurance adjuster will not investigate the amounts provided by your providers, or Medicare/Medicaid, Health Insurance or any other provider claiming interest against your settlement. Your attorney will do everything possible to make sure that only those who have valid claims and liens are paid from your settlement and he can even negotiate down some valid claims on your behalf. The attorney is there to protect your interests. The insurance adjuster has no duty to investigate any claim against your proceeds and may pay claims that are not really owed. At Riddle and Brantley we have three goals:
- We want you to get better or at least reach maximum medical improvement before settlement;
- We want all of your bills and liens related to your accident injuries paid or at least marked satisfied so that no one attempts to collect money from you after your settlement; and
- We want to put as much money as possible in your pocket.
Workers Compensation cases and Social Security Disability cases are much different
If you have a Workers Compensation settlement the above rules don’t apply. The Industrial Commission must approve each settlement or award before any checks are issued. Once approved, the insurance company will in most cases issue two checks, one to you and one to your attorney for his approved fees. The wait time for clearing the bank will depend upon your bank or whether we deposit the funds into our trust account. If we place the funds in our trust account then the wait time is usually 7 business days. If you are a Social Security client and we win benefits for you then your checks will be issued by the Social Security Administration for both your back pay and your upcoming monthly benefits. The attorney fees will be set, approved and issued by the judge that made the decision in your case.
We encourage everyone to at least consult with an attorney if you have been injured in a car crash, other type of accident, suffered an injury on the job or you are entitled to Social Security Disability. We look forward to your call or email.