How Do Lawyers Negotiate Settlements?

Tuesday, September 10, 2024

How Do Lawyers Negotiate Settlements?

Written by Malman Law, reviewed by Steve J. Malman.

Negotiating a settlement is one of the most important skills for your personal injury lawyer to have. Dealing with a personal injury can be both physically and emotionally challenging. The medical expense of an injury can easily add additional weight to this already difficult time. The constant influx of hospital bills arriving every day while you are trying to focus on your recovery is a stressful distraction.

Many people who have suffered an injury are also unable to work, so facing lost wages on top of additional expenses makes the situation even more overwhelming. On top of all of this, the insurance companies will work to minimize the payout for your claim.

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For this reason, it is advisable to work with an experienced attorney who will handle the communication with the insurance companies or the other party so that you don’t have to.

A skilled personal injury attorney in Chicago will advocate on your behalf and work to negotiate a settlement for your claim.

Negotiating Medical Bills After a Settlement

There are many factors that go into negotiating a settlement, and an experienced attorney will have a process that works well for them. If your attorney is managing the negotiation process, information is key. The more evidence and detail that you can provide, the stronger their position will be to negotiate on your behalf.

Throughout the entire process, attorneys will look for documentation such as accident reports, doctor’s notes, and other evidence that they can use to support their claim and to negotiate the highest possible settlement.

Some of the steps that an attorney will consider when putting together their approach to negotiation include:

• Determining who is at fault – The first step is to review who is liable for the accident. In most cases, the party that is at fault will be liable to pay for damages that resulted from the accident. There are several ways that a party can be found at fault for an accident. One of the most critical pieces of information that an insurance company will rely on in the case of a motor vehicle accident is the police report. Other evidence collected at the scene of an accident or other documentation, such as medical reports, can also help.
• Determining the damages – Seeking both economic and non-economic damages is common when it comes to an insurance claim. Economic damages include concrete expenses that are easy to calculate, such as lost wages, medical devices and equipment, medical bills, and more. Non-economic damages are harder to calculate and are more common with catastrophic injuries. These include pain and suffering, loss of companionship, damage to a reputation, emotional distress, and more.
• Medical bills and other expenses – While medical bills are often categorized as economic damages, injury lawyers will take a close look at these when working to negotiate a settlement. There may be additional fees and other expenses that have not previously been accounted for. Lost wages due to time off work is another point of negotiating a settlement.
• Insurance policy limits – Insurance policies all have limits on the amount that they will pay out for a claim. These limits vary from policy to policy, but there are times when the cost of injuries is greater than the liable party’s insurance policy will cover. Every state has minimum liability insurance coverage requirements for insured drivers. The most common liability insurance requires that a driver maintains coverage up to $25,000 per person, meaning that the insurance company would need to pay a maximum of $25,000 to the injured party.

How Long Does it Take to Negotiate a Settlement?

After your attorney has taken a close look at all the evidence and has put together a negotiation strategy, the next step will be to begin the process of negotiating directly with the insurance company. Typically, this will start with your attorney sending a demand letter to the insurance company for a specific amount. Often this amount will be the maximum policy limit, but this varies from case to case.

Once the insurance company receives the demand letter, their team will review and respond with either an agreement or a lower settlement amount. It is common for an insurance company to offer a counteroffer to the initial settlement amount, although they are not required to do this.

Insurance companies are looking to maximize their profits and will attempt to find ways to minimize or dismiss your settlement request. This is one of the reasons that it is beneficial to work with a lawyer who is experienced in negotiation. If the insurance company offers an amount that is lower than your initial request, the settlement will go into a negotiation process.

Although it is not common, in some situations, an insurance company will refuse to negotiate. In this instance, your attorney will advise if it is in your best interest to go to trial in order to reach a settlement agreement.

The entire process, from the start of your case through the settlement, can take several months to complete. In some instances, especially if your case goes to trial, it could take even longer. It can be difficult to be patient during the negotiation process, especially if you are facing financial challenges such as lost wages and expensive medical bills.

Your attorney will keep you informed throughout the process and will do their best to reach a maximum settlement amount as quickly as possible. They are working on your behalf and advocating for just compensation to help in the event of your accident.

How Much Can Lawyers Negotiate for Medical Bills?

Usually, medical bills take up a significant portion of the settlement payment. In addition, medical bills can rapidly accumulate and become difficult to manage. Your injury attorney should negotiate a settlement that

Fortunately, you can significantly reduce medical bills with suitable planning and negotiation skills. A personal injury attorney can negotiate with medical providers and insurance companies to lower the amount owed for the settlement payment.

Here are a few strategies that an attorney can apply to negotiate for a lower medical bill:

Negotiating Before Treatment

If you’ve sustained a severe injury that requires urgent attention, it may be challenging to negotiate emergency room charges. Fortunately, there’s an opportunity to negotiate the cost of follow-up treatment.

A personal injury attorney has dealt with numerous injury cases and might have a network of healthcare providers that offer affordable rates for injury victims. Although billing is straightforward, an attorney can speak with the accounts or billing department to obtain a favorable rate for your treatment plan.

Request Discounts

Hospitals usually offer discounts to uninsured patients who pay cash, covering the difference from insured patients. Healthcare providers use cash discounts to improve their cash flow and reduce the burden of unpaid bills.

An attorney can negotiate a better discount rate depending on their relationship with the institution. Although most discount programs apply to patients who commit to paying the charge upfront, they can enter into an agreement based on trust.

Medical Lien

Some providers may place a medical lien on your settlement to guarantee payment for their treatment services. A personal injury attorney can negotiate the lien amount, leading to a reduction of the total deductions from the settlement.

The law allows a personal injury attorney to call for a medical lien reduction to cover other costs, such as litigation and attorney fees. The medical lien should not be fulfilled based on property lien but on a just and equitable basis.

Therefore, any factor that reduces the settlement value must likewise reduce the amount of medical lien.

Factors that may affect the medical lien include:

• Doubt of liability or comparative negligence
• The applicable insurance coverage
• The outcome of the trial that reduces the settlement award

Here are a few ways that an attorney can reduce the medical lien:

Reduce the Recoverable Medical Bill

The attorney can inspect the bill and flag any entry unrelated to the settlement offer. An attorney usually notifies the lien holder and asks them to exclude it from the lien claim.

In other instances, the victim may have a substantial wage loss or pain and suffering with a limited defendant’s policy. An attorney can demand a reduction of the actual bill proportionate to the settlement award.

Narrow the Claim

Each health insurance plan has parameters the company uses to determine parties eligible to make a claim. An attorney may check to ensure the lien holder has a right to make a claim and establish the amount of settlement they can obtain.

Reduce Unreasonable or Unrelatable Charges

In most cases, a healthcare provider may use a third-party company to recover the medical lien. An attorney may contact the contracted agency and request an itemization of the claim for reimbursement.

An attorney will check any irrelevant charges or double billing and have these charges struck out. Most importantly, you’ll need an attorney’s help to ensure the charges are reasonable.

Negotiating With Out-of-Network Health Providers

You will likely face a high bill if you obtain treatment services from an out-of-network health provider. An attorney can negotiate for a lower medical bill by getting involved at the inception of the treatment services.

How am I Supposed to Pay My Medical Bills after a Car or Truck Accident?

If you’ve been in an accident, you might be wondering how to pay for your doctor visits, hospital stays, and additional treatment. Here are some options:

• Use your health insurance: If you have health insurance, it can help pay for some of your medical costs.

• Car insurance: Your car insurance or the other driver’s insurance might cover some of your bills.

• Personal injury protection (PIP): Some states require this type of no-fault car insurance. It can help pay for medical bills no matter who caused the accident.

• Med Pay: This is another type of car insurance that can help with medical costs.

• Sue the person who caused the accident: If someone else caused the crash, you might be able to get money from them to pay your bills.

• Payment plans: Some hospitals and doctors will let you pay your bills over time instead of all at once.

• Legal help: A lawyer who knows about car accidents can help you figure out how to pay your bills and maybe get money from the person who caused the crash.

Your Insurance Might Not Fully Cover Your Medical Bills

It’s important to know that your insurance might not pay for all of your medical bills. Here’s why:

• Insurance Limits: Your insurance might only pay up to a certain amount. If your bills exceed this limit, you will be responsible for paying the remaining balance. 

• Deductibles: This is the amount you must pay out of pocket before your insurance starts covering your medical expenses. Deductibles can range from hundreds to thousands of dollars.

• Co-pays: These are small, fixed amounts you must pay each time you visit a doctor or purchase medication. Co-pays can add up quickly, especially if you require frequent medical attention.

• Out-of-network Care: If you receive treatment from a doctor or hospital that is not within your insurance network, you might have to pay significantly more, as out-of-network services are often covered at a lower rate or not at all.

• Denied Claims: Sometimes, insurance companies may refuse to pay for certain treatments or procedures. You might have to appeal these decisions or provide additional documentation to get them to pay.
• Policy Exclusions: Some insurance plans do not cover certain types of care or injuries. It’s crucial to understand what your policy excludes so you can plan accordingly.

If your insurance doesn’t cover everything, you might end up owing a lot of money. That’s why it’s important to explore all your options for paying medical bills after an accident, such as payment plans, financial assistance programs, or consulting with a financial advisor to manage the costs effectively. 

An experienced car accident lawyer can safeguard your rights and ensure you get the compensation you deserve to pay your medical bills. 

How To Negotiate A Medical Bill

If you’re left with big medical bills after an accident, you might be able to lower them by negotiating. Here are some tips:

• Ask for an itemized bill to show every charge in detail. Sometimes there are mistakes you can fix.

• Check for errors. Look for things like wrong dates, duplicate charges, or services you didn’t get.

• Research fair prices. Find out what other hospitals or doctors charge for the same care. You can use websites that compare medical costs.

• Offer to pay cash. Some providers will give you a discount if you pay the whole bill at once in cash.

• Ask about financial assistance. Many hospitals have programs to help people who can’t afford their bills.

• Propose a payment plan. If you can’t pay all at once, ask if you can pay a little bit each month.

• Get help from a medical billing advocate. These are people who can help you understand your bills and negotiate for you.

• Don’t ignore your bills. Talking to the hospital or doctor’s office is better than not paying at all.

• Be polite but firm. Explain your situation and ask if there’s any way they can lower your bill
• Get everything in writing. If you make a deal, make sure to get it in writing so there’s no confusion later.

Remember, it’s okay to ask questions about your medical bills and try to get them lowered. Many people do this, especially after an accident that wasn’t their fault.

Talk with a Skilled Chicago Personal Injury Attorney Right Away

If you have been in an accident or suffered a personal injury and believe that another party is at fault, it is advisable to speak with an experienced lawyer as soon as you can.

At Malman Law, our team is dedicated to helping our clients, and we understand how frustrating and painful the aftermath of an injury can be. We also know it can be difficult to choose the right legal representation, so your first meeting with us is free, and there is zero obligation. Contact us today to schedule an appointment and see how we can help.