Subrogation in Auto Accident Cases

Subrogation has become a major issue when litigating car accident cases in Pennsylvania. Generally speaking, subrogation is the lawful substitution of a third party in place of a party having a claim against another party. Confused? Think of it this way, if Medicare paid your treatment bills from an auto accident, subrogation allows Medicare to step into your shoes and sue any party you could have sued in order to recover the money they paid. In this example, Medicare, as the "Subrogee" usually asserts a subrogation lien against the proceeds of any lawsuit you file against a negligent driver. Any valid subrogation lien must be paid out of the proceeds of a lawsuit.

In Pennsylvania, the Motor Vehicle Financial Responsibility Law (MVFRL) at 75 Pa.C.S.A section 1720 provides that there is no right of subrogation or reimbursement in automobile accident case with certain exceptions. The exceptions to this broad prohibition are significant and can have a tremoundous impact on your automobile accident case. Generally, it has been held that Federal Law pre-empts state law allowing Medicare, self-funded ERISA plans and other goverment payment programs to preserve their right to subrogate. It has also been held that Workers Compensation insurance carriers are generally entitled to subrogate. It is extremely important to evaluate whether any subrogation interests exist which could impact your recovery in a car accident case. For more information, call 570-718-4900 today.