If you have been injured in Florida and received a settlement, one of the biggest concerns is how your medical bills will be handled. Do they come out of your settlement? What happens if the bills are more than the settlement amount? At Abrahamson & Uiterwyk, we see these questions often. While the answers are not always straightforward, here’s some basic information about paying medical bills after a car accident settlement or other type of personal injury settlement in Florida.

Key Takeaways

  • Medical bills are typically paid out of your settlement before you receive your portion.
  • Abrahamson & Uiterwyk negotiates with medical providers to reduce bills and maximize what clients take home, using strategies like proportional reductions, pre-settlement negotiations, and challenging excessive charges.

Do I Have to Pay Medical Bills Out of My Settlement?

Yes, in most situations your medical bills are paid out of your settlement. When the insurance company issues the check, it goes to your attorney’s office. From there, attorney fees and costs are deducted, then medical providers are paid, and finally the remainder is distributed to you.

This means if you owe hospitals, doctors, or chiropractors for treatment, those bills are typically satisfied from the settlement before you receive your portion.

What Is a Letter of Protection?

A letter of protection (LOP) is an agreement with a medical provider that allows you to receive treatment without paying upfront. The provider agrees to wait for payment until your case settles. In return, they charge their private pay rates, which are usually much higher than what health insurance would have paid.

Florida law changed in 2023 and now requires extensive disclosure when treatment is provided under an LOP. Insurance companies can use this information against you by claiming that doctors are biased because they only get paid if you win. Because of this, many doctors and law firms no longer use formal LOPs. Instead, there may be informal agreements to delay collection until the case is resolved.

Does My Lawyer Have to Pay My Medical Bills?

Your attorney’s office typically handles distributing settlement funds to make sure those bills are taken care of. At Abrahamson & Uiterwyk, once the settlement check comes in, we deduct our fees and costs, negotiate with medical providers to reduce the bills, and then pay medical providers. This ensures bills are addressed and clients are protected from collection actions.

Negotiating Medical Bills After Settlement

Medical providers often charge far more than what is reasonable. We negotiate aggressively to bring those bills down.

Case Example 1: $200,000 in Bills, $60,000 Settlement

One client had more than $200,000 in medical bills after treatment. The case ultimately settled for $60,000. Without negotiation, every dollar would have gone to providers, leaving the client with nothing. We approached the doctors and explained that unless they agreed to significant reductions, the case could not be resolved. After tough negotiations, we were able to cut the medical bills down enough so the client still received a meaningful portion of the settlement.

Case Example 2: Proportional Reductions

In another case, multiple providers submitted bills that together far exceeded the available settlement funds. We proposed a prorated system. For example, if the total bills made up 100 percent but only 25 percent of that amount was available from the settlement, each provider would receive 25 percent of their bill. Some accepted this as full and final payment, while others reserved the right to pursue the client for the balance. Without this strategy, the client would have walked away with nothing.

Case Example 3: $100,000 Surgery with a Limited Settlement

We once represented a client who underwent a surgery costing $100,000. The insurance company offered $150,000 to settle the case. After attorney’s fees and costs, there would have been very little left for the client. We were able to negotiate directly with the surgeon to reduce the bill drastically. That reduction ensured the client kept a meaningful amount of the settlement rather than seeing it consumed entirely by one provider.

Strategies for Reducing Medical Bills After Settlement

There are several strategies we use to protect clients from overwhelming medical debt:

  • Negotiating before settlement is finalized. In some cases, we approach providers ahead of time to secure their agreement to reduce bills, making settlement possible.
  • Requesting prorated distributions. When there are multiple providers and limited funds, we divide what is available proportionally. This ensures that no single provider consumes the entire settlement.
  • Challenging excessive charges. We regularly push back on inflated medical bills. Even when a settlement is large enough to cover them, we negotiate because providers often bill far above reasonable amounts.
  • Securing verbal agreements. We avoid written promises of reduced payments until settlement is finalized, keeping the option to present full bills if the case goes to trial.

What If the Settlement Is Not Enough?

It is common for settlements to be smaller than expected or for bills to be higher than the available funds. When this happens, we work directly with doctors to reduce what is owed. Providers often agree because they know otherwise the case cannot be settled.

Negotiation is critical in these situations. Even in cases where the recovery is fair, we negotiate because medical providers frequently overcharge. In many cases we are able to cut bills nearly in half, which ensures clients receive more of their settlement.

If you are facing medical bills after a Florida accident settlement, having an experienced attorney on your side can make the difference between walking away with little-to-nothing or keeping a meaningful portion of your settlement.

FAQ About Paying Medical Bills After Settlement in Florida

What happens if I refuse to let my attorney pay medical bills from the settlement?

Attorneys generally make sure medical bills are paid, but if a client insists otherwise, the provider can pursue collection directly. This could lead to lawsuits or damage to credit. While rare, clients sometimes try to block payment, but it is usually not in their best interest.

What happens if a medical provider refuses to reduce their bill?

It does happen. In those cases, the provider might agree to accept partial payment and still pursue the client for the balance. Others may refuse reductions altogether. Having an experienced attorney handle negotiating medical bills after a settlement is critical, since most providers prefer some payment over risking none.

Can creditors take my personal injury settlement in Florida?

Once you receive your portion of the settlement, creditors may be able to pursue it to collect on debts you owe. This is one reason it is important to work closely with an attorney to ensure medical bills and liens are properly resolved.