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Posted On June 16, 2015 Personal Injury

How Revictimizing Victims Became a New Industry

This Man Is the Reason Insurance Companies Can Take Money From You (Again!)

My job is to protect accident victims from the overreaching insurance companies who try to wriggle out of paying victims what they deserve. This guy has the opposite claim to fame: he “protects” insurer’s profits at the expense of injured victims.

After all, in his own words, “Why isn’t this money going back to who it belongs to?”

George Rawlings is, as Bloomberg dubbed him, “the lawyer who invented a way to take cash from accident victims.” I’m not talking about a doctor or attorney who provided medical or legal services to injured individuals, and who deserves a paycheck for that work. Rawlings pioneered the industry of helping health insurers take a cut out of accident victims’ legal settlements. The enterprise targets injured individuals to pad the pockets of what’s already a multi-billion dollar industry.

If you have to reimburse your health insurer for covering your medical bills, how did you benefit from purchasing insurance in the first place?

How it’s Supposed to Work

You pay insurance premiums so that if something happens – a covered event, be that a car crash covered by your auto insurance or an injury covered by your medical insurance – the costs become your insurer’s responsibility.

Insurance is a gamble, really. You agree to pay a set amount of money now for the promise that you won’t have to face a massive financial fallout later on, if that event ever happens. The insurance company takes your money with the understanding that they owe you nothing unless a covered event occurs – but if it does occur, the company must provide the economic protection it promised.

Here’s the thing. If you go your entire life without being in any kind of car accident, you don’t get back the money you paid all those years for auto insurance. Same thing for health insurance – if you never go to the doctor or hospital all year, you generally don’t get a refund. You paid for the promise of coverage, not for the services you actually received.

In theory, the insurance industry should be on the same terms. If an insurer has to pay out on a claim, the company knew the risk. It simply lost the gamble.

How Insurance Actually Works

Many of these insurers are changing the rules of the game, thanks in large part this growing industry. If these health insurers have to actually pay for your medical bills after an accident – which is, after all, their sole function and the reason you pay them thousands of dollars a year in the first place – then they want their money back out of your settlement. This is called healthcare subrogation, and yes, it’s legal.

If a clause in the contract you agreed to when you purchased insurance allows an insurer to do this, it doesn’t matter how much you need the money or how badly you’ve been hurt. Even in cases like paralysis, where there’s nowhere near enough insurance coverage to offset the costs of treating permanent injuries, the insurer can come in and take from the already insufficient funds, shrinking a settlement even smaller.

It was Rawlings who “invented a way to identify” personal injury claims and track down claimants, he told Bloomberg. He reported getting 20 percent of whatever he collects on behalf of major health insurance companies – enough money that his once small company swelled to 1,100 workers. While it’s not uncommon for auto insurers to all but stalk claimants, the lengths that the subrogation services firm’s employees go to is startling. “Motivated by cash bonuses tied to how much they recover, they dig through court filings, scour newspaper articles and search Facebook, Twitter and Instagram for clues about how people were injured,” Bloomberg reported.

Does it seem unfair that you can never get your premiums refunded, but your insurer can take money from you? It does to us. And it’s getting worse.

The View from the Front Lines

“When I started out, companies didn’t come after this money or they at least would consider the human element,” Bloomberg reported one attorney as saying. But times have changed. Today, “it is just all about the money.”

As personal injury lawyers, my colleagues and I have seen this firsthand. After all, we’re on the proverbial front lines of the fight with insurers, and we’ve seen plenty of foul play. Perhaps the worst thing about it is that there’s little that policyholders can do to protect themselves or prevent this from happening to them. Insurers increasingly add subrogation into the fine print of their contracts.

How Lawyers Handle Healthcare Subrogation

If it’s not possible in many cases to avoid health-care subrogation, what can you do? Your best bet is to have an attorney on your side after an accident. We’re prepared for the possibility of subrogation from the start, and we always make sure you get the largest settlement you can – especially if we know that you’ll be stuck paying some of your money back to a health insurer.

More importantly, personal injury lawyers typically negotiate with the health insurer to bring costs down. Bloomberg cited the example of a case where the attorney’s negotiations shaved off more than half of the $33,000 the insurer insisted it was owed. The victim had to pay just $15,000 and got to keep the other $18,000 where it rightfully belonged – in his pocket. At our office, we’ve repeatedly saved individual clients thousands or tens of thousands of dollars – and sometimes more – just by negotiating how much they owe.

An attorney can minimize the damage, but there’s still nothing fair about one set of rules applying to the insurance industry and another applying to the rest of us.