TL;DR
When a person dies due to someone else’s negligence, their estate is initially responsible for the medical bills incurred before their passing. A wrongful death lawsuit, specifically through a component called a “survival action,” seeks to recover the cost of these medical expenses from the at-fault party. Health insurance, Medicare, or Medicaid may pay the bills upfront, but they will place a lien on any settlement or court award to be reimbursed. Surviving family members are generally not personally liable for these debts unless they co-signed for the medical care.
Key Highlights
- The deceased person’s estate is the first entity legally obligated to pay outstanding medical debts.
- A survival action is the legal mechanism used to claim the medical costs the deceased incurred.
- A wrongful death claim compensates surviving family for their own losses, like lost income and companionship.
- Health insurers have a right of subrogation, meaning they can recover what they paid from the settlement.
- An experienced attorney can often negotiate with medical providers and insurers to reduce the total amount owed.
When a family is grieving an unexpected loss, the arrival of medical bills can feel like a secondary trauma. The costs associated with emergency services, surgeries, and intensive care can accumulate rapidly. In the United States, end-of-life medical care is a significant financial event, with studies showing that a substantial portion of a person’s lifetime healthcare spending occurs in their final year. When that final year is cut short by a preventable incident, the financial burden left behind becomes a central issue for the surviving family.
These financial obligations are governed by a combination of probate law and personal injury law. Legally, the person who received the medical services is the one who owes the debt. Upon their death, that obligation transfers to their estate. An estate is the legal entity that comprises all of a person’s assets and liabilities at the time of death. This means hospitals, ambulance companies, and other healthcare providers become creditors of the estate. They can file claims during the probate process to be paid from the estate’s assets, such as bank accounts, real estate, or investments.
The critical turning point in these situations is the reason for the medical treatment. If the injuries that led to the medical bills and subsequent death were caused by another party’s wrongful act or negligence, the dynamic changes. The family, through a representative of the estate, has the right to file a legal claim to hold the responsible party accountable. This legal action is not just about seeking justice; it is the primary method for recovering the immense financial costs, including medical bills, that were forced upon the deceased and their family. Understanding how this process works is the first step toward shifting the financial responsibility from the estate to the person or entity that caused the harm.
The Estate’s Initial Responsibility for Medical Debt
When a person passes away, their financial life doesn’t just disappear. Instead, it is consolidated into their estate. Think of the estate as a temporary financial container holding everything the person owned (assets) and everything they owed (liabilities). The responsibility for managing this container falls to a person known as the personal representative or executor, who is either named in the deceased’s will or appointed by a probate court.
One of the personal representative’s main duties is to identify all outstanding debts, which prominently includes medical bills. Healthcare providers are considered creditors of the estate. They have a legal right to submit claims for payment for the services they rendered before the person’s death.
How the Payment Process Works:
- Notice to Creditors: The personal representative typically publishes a notice to inform potential creditors that the person has died and that they have a limited time to file a claim against the estate.
- Filing a Claim: Hospitals, doctors’ offices, and other medical facilities will submit formal claims detailing the amount owed.
- Paying Debts from Assets: The representative uses the estate’s assets to pay these debts in an order of priority determined by state law. Secured debts (like a mortgage) are often paid first, followed by administrative fees, funeral expenses, and then unsecured debts like medical bills and credit card balances.
A common fear among surviving family members is that they will have to pay these bills out of their own pockets. In most cases, this is not true. Spouses, children, or other relatives are not personally liable for the deceased’s medical debt unless they specifically agreed to be. This could happen if a family member co-signed admission paperwork at a hospital, explicitly guaranteeing payment. Otherwise, the debt belongs to the estate. If the estate has no assets or not enough to cover all the bills, the creditors may be left unpaid. The debt does not automatically transfer to the family.
Wrongful Death vs. Survival Actions: Two Paths to Recovery
When a lawsuit is filed after a fatal incident, it’s often referred to as a “wrongful death case.” However, this is a bit of a simplification. In reality, there are usually two distinct types of claims that can be brought together: a wrongful death claim and a survival action. Understanding the difference is essential because it directly impacts how medical bills are recovered.
What is a Wrongful Death Claim?
A wrongful death claim is brought on behalf of the surviving family members (like a spouse, children, or parents) for the losses they have personally suffered due to their loved one’s death. This claim is meant to compensate the survivors, not the estate. The damages sought in a wrongful death action are unique to the family and may include:
- Loss of financial support: The income the deceased would have earned and provided to the family.
- Loss of companionship and consortium: The loss of the deceased’s love, affection, guidance, and society.
- Loss of services: The value of services the deceased provided, such as childcare, home maintenance, or accounting.
- Funeral and burial expenses: The direct costs associated with the final arrangements.
The money recovered from a wrongful death claim goes directly to the designated beneficiaries, as determined by state law. It does not become part of the estate and is not accessible to the deceased’s creditors.
What is a Survival Action?
A survival action is different. It is a claim that the deceased person could have brought themselves had they survived the incident. Essentially, the lawsuit “survives” their death and is carried on by the personal representative of their estate. This action seeks to recover the damages the deceased person suffered between the moment of injury and the moment of their death.
This is where the medical bills come in. The damages in a survival action include:
- Medical expenses: All costs for treatment from the time of the injury until death. This is the primary mechanism for recovering money to pay those bills.
- The deceased’s pain and suffering: Compensation for the physical pain and emotional distress the person experienced before they passed away.
- Lost wages: Any income the deceased lost between their injury and their death.
The money recovered from a survival action is paid directly to the estate. Because it goes to the estate, this money is then used by the personal representative to pay the estate’s debts, including the very medical bills the lawsuit sought to recover. Any funds remaining after all creditors are paid are then distributed to the heirs named in the will or according to state succession laws.
The Role of Health Insurance, Medicare, and Medicaid
In many cases, the deceased had health insurance coverage, either through a private company, Medicare, or Medicaid. These entities often pay the medical bills as they are generated, long before any lawsuit is settled. This can provide immediate relief by stopping collection calls from hospitals, but it adds another layer to the financial recovery process.
Initial Payments and the Right of Subrogation
When a health insurance company pays for medical treatment related to an injury caused by a third party, it doesn’t just absorb the cost. The insurance policy contains a clause giving the insurer a “right of subrogation.” This is a legal term that means the insurance company can step into the shoes of the insured person to recover the money it paid out from the person who caused the injury.
In practice, this means the health insurer will place a lien on any future settlement or judgment from the wrongful death case. A lien is a legal claim to a portion of the settlement proceeds.
Understanding Medical Liens
A lien is a formal notice sent to the family’s attorney and the at-fault party’s insurance company. It states that the health insurer must be reimbursed from any money recovered before the family or the estate receives their share.
For example, if a person incurs $100,000 in medical bills before dying in a car crash, their health insurance might pay $80,000 of that cost. That insurance company will then place an $80,000 lien on the case. If the case later settles for $500,000, the lien must be paid from that amount. An experienced wrongful death attorney plays a crucial role here. They will:
- Verify the lien amount: Attorneys check to ensure the insurer is only claiming costs directly related to the fatal injury.
- Negotiate the lien: In many situations, an attorney can negotiate with the insurance company to reduce the lien amount. They might argue that without their legal work, the insurer would have recovered nothing. This can result in the insurer agreeing to accept a smaller percentage, leaving more money for the estate and the family.
Special Considerations for Medicare and Medicaid
If the deceased was covered by Medicare or Medicaid, the process is similar but often more rigid. These government entities have a powerful, federally protected right to reimbursement. Their liens are sometimes called “super liens” because they take high priority.
The Centers for Medicare & Medicaid Services (CMS) must be notified of any personal injury claim involving a beneficiary. CMS will then issue a “Conditional Payment Letter” detailing all the payments it has made that it believes are related to the injury. The final settlement cannot be distributed until Medicare’s lien is satisfied. Failing to pay back Medicare can result in serious penalties for the family, the attorney, and even the defendant’s insurance company.
Proving and Calculating Medical Expenses in Court
To successfully recover the cost of medical care through a survival action, the personal representative’s attorney must do more than just show the bills. They must build a clear, evidence-based case that proves the expenses were reasonable, necessary, and a direct result of the defendant’s negligence.
Gathering Essential Documentation
The foundation of this part of the claim is meticulous record-keeping. The legal team will collect a comprehensive file of all related financial and medical documents, including:
- Itemized hospital bills: These provide a detailed breakdown of every charge, from room and board to specific medications and procedures.
- Bills from individual physicians: This includes surgeons, anesthesiologists, emergency room doctors, and specialists.
- Ambulance and medical transport records: Invoices for ground or air transportation from the scene of the incident to the hospital.
- Pharmacy records: Receipts for all prescription medications.
- Explanation of Benefits (EOB) statements: These documents from the health insurer show what was billed, what was covered, and what amounts were paid or adjusted.
- Medical records: While not bills themselves, the corresponding medical records (like doctor’s notes, surgical reports, and diagnostic test results) are used to prove that each treatment was necessary for the injuries sustained.
The Importance of Expert Testimony
In complex cases, simply presenting the bills may not be enough. The defense may argue that some of the treatment was unnecessary or that the costs were inflated. To counter this, the plaintiff’s attorney may hire expert witnesses.
A medical expert, such as a physician in the same field of practice, can review the medical records and testify that the care provided was consistent with the standard of care for the types of injuries the deceased suffered. They can explain to a judge or jury why a particular surgery or course of treatment was medically necessary.
A billing and coding expert can analyze the itemized bills to confirm that the charges are reasonable and customary for the geographic area. This prevents the defense from successfully arguing that the hospital overcharged for its services.
Distinguishing Between Past and Future Medical Costs
In most wrongful death cases, all medical costs have already been incurred. However, in a situation where a person was injured and lived for a period of time with a life care plan in place before succumbing to their injuries, the claim might have originally included future medical costs. For a survival action, the claim is limited to the actual expenses incurred from the date of injury to the date of death. The attorney must clearly delineate and prove this specific amount.
The Legal Process for Recovering Medical Costs
Securing compensation for medical bills is not an automatic process. It requires navigating a formal legal process that begins long before any money is paid. The personal representative, guided by their attorney, must take specific steps to pursue the claim.
Filing the Claim and the Statute of Limitations
The first official step is filing a lawsuit in civil court. This legal complaint names the at-fault party (the defendant) and outlines the basis for the claim, including the negligence that led to the death and the damages being sought.
Every state has a strict deadline for filing a wrongful death lawsuit, known as the statute of limitations. This time limit is typically two or three years from the date of death. If a claim is not filed within this window, the family forfeits its right to seek compensation forever. This makes it critical to speak with an attorney as soon as possible after a loss.
The Discovery Phase: Uncovering the Facts
Once the lawsuit is filed, the case enters the discovery phase. This is the formal process where both sides exchange information and gather evidence. It involves several key activities:
- Interrogatories: Written questions sent to the other party, which they must answer under oath.
- Requests for Production: Requests for documents, such as police reports, internal company records, medical records, and insurance policies.
- Depositions: In-person interviews where attorneys question witnesses, the defendant, and experts under oath. A court reporter creates a transcript of the testimony.
During discovery, the plaintiff’s attorney will use these tools to officially gather all the medical bills and records needed to prove the extent of the medical damages.
Settlement Negotiations vs. Going to Trial
The vast majority of personal injury and wrongful death cases are resolved through a settlement before they ever reach a courtroom. A settlement is a formal agreement where the defendant’s insurance company agrees to pay an agreed-upon sum of money in exchange for the plaintiff dropping the lawsuit.
Negotiations can happen at any point during the legal process. The plaintiff’s attorney will present a “demand package” to the insurer, which includes all the evidence of liability and a detailed accounting of all damages, including the medical bills. The insurer will then respond with a counteroffer, and negotiations will proceed. If a fair settlement cannot be reached, the case will continue toward trial, where a jury or judge will decide the outcome.
How Settlement Funds Are Distributed to Pay Medical Bills
Once a case is resolved, either through a settlement or a court verdict, the process of distributing the money begins. The settlement check is not given directly to the family. It is typically sent to the plaintiff’s attorney, who deposits it into a special trust account. From there, the funds are disbursed in a specific order.
The Settlement Check: Where Does the Money Go First?
Before the estate or the beneficiaries see any money, several obligations must be paid directly from the settlement funds held in the trust account.
- Attorney’s Fees: The attorney is paid for their work. Most wrongful death lawyers work on a contingency fee basis, meaning they receive a percentage of the total recovery (typically 33-40%). They only get paid if they win the case.
- Case Costs: The attorney is reimbursed for all the out-of-pocket expenses they paid to advance the case. This can include court filing fees, expert witness fees, deposition costs, and costs for obtaining records.
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Negotiating and Satisfying Medical Liens
After fees and costs, the next step is to address all outstanding medical liens. This is a critical stage where a skilled attorney can provide significant value. As mentioned earlier, the attorney will work to negotiate down the amounts owed to health insurance companies, Medicare, and Medicaid. They may also negotiate directly with any hospitals or providers that have not been paid and have their own liens. Every dollar saved in lien reduction is a dollar that goes back to the estate and the family. Once the final lien amounts are agreed upon, the attorney pays them directly from the settlement funds in the trust account.
Final Distribution to the Estate and Beneficiaries
Only after all fees, costs, and liens have been fully paid is the remaining money distributed. The funds are allocated based on the two types of claims:
- Wrongful Death Portion: The money designated for the wrongful death claim is paid directly to the surviving family members as outlined by state law.
- Survival Action Portion: The money designated for the survival action (including the amount for medical bills and the deceased’s pain and suffering) is paid to the estate. The personal representative then uses these funds to pay any remaining debts of the estate. Any money left over is distributed to the heirs.
Conclusion
The financial pressures that follow the loss of a loved one can be intense, and a stack of unpaid medical bills only adds to the distress. While the deceased’s estate is the initial legal entity responsible for these debts, a wrongful death case provides a clear path to shift that burden to the negligent party who caused the harm. The legal framework, through a combination of a survival action and a wrongful death claim, is designed to make the victim and their family whole again, both emotionally and financially.
The process involves careful documentation of all medical expenses, strategic management of insurance and government liens, and assertive legal action. The distinction between a survival action, which recovers costs for the estate, and a wrongful death claim, which compensates the family for their personal loss, is fundamental to ensuring that all obligations are met and that the family receives the support they deserve. Because of the strict deadlines and the complexities of dealing with powerful insurance companies and government agencies, time is of the essence.
If your family is facing this difficult situation, the most important step you can take is to consult with a qualified wrongful death attorney. An experienced legal advocate can protect the estate from creditors, handle all communications with insurance adjusters, and build a powerful case for full compensation. Taking decisive action allows your family to focus on healing while a professional works to secure the financial stability and justice your loved one deserves. Contact our qualified wrongful death attorney to protect your rights, ensure your story is told accurately and fight for the justice your family deserves.