Oregon Health Plan Reimbursement After a Car Accident: Full Compensation First

By the FigureMyTax Editorial Team · How we calculate

For a person injured in a motor vehicle accident, an Oregon insurer may not be reimbursed for personal injury protection or health benefits from the recovery unless you first receive full compensation, and then only from the recovery above that amount. Contract terms that allow more are void.

What the statute says

ORS 742.544 says an insurer may not receive reimbursement or subrogation for personal injury protection or health benefits from your recovery except to the extent that you first receive full compensation for your injuries and the reimbursement is paid only from the total recovery in excess of the amount that fully compensates you. The total recovery counts underinsured motorist benefits, other parties' liability insurance, PIP or health benefits, and any other payment from the party at fault.

The presumptions

It is presumed that a judgment is the amount that fully compensates you, that you are fully compensated if your recovery is less than the coverage available from the other driver's liability policy, underinsured benefits, PIP and other sources, and that you are not if you recover an amount equal to that available coverage. A policy provision that permits reimbursement other than as the section provides is void.

How much the insurer gets from the excess

ORS 742.538 says an insurer entitled to recovery gets the benefits it furnished less its proportionate share of expenses, costs and attorney fees, allocated by the ratio of its benefits to the rest of the recovery. We did not find a statute for health plan reimbursement outside motor vehicle accidents; a law-firm compilation of Oregon subrogation law reports that the made-whole rule applies and that the common fund rule applies, citing decisions we did not read.

A worked example

Say a health plan paid $9,000 after a car accident and your injuries are worth $250,000, but you recover $100,000. You are not fully compensated, so the plan gets nothing. If you recover $260,000, the $10,000 above full compensation could go to the plan, less its share of fees and costs, up to its payment. The Oregon medical lien calculator applies that.

Provider liens and Medicaid are different

Hospitals and physicians have a statutory lien (ORS 87.555) and Medicaid has its own statutes; see how provider liens work and the Medicare and Medicaid post. A self-funded employer plan is governed by federal law, so ask for the plan document.

This is general information, not legal advice, and the state comparisons above are illustrative, not an exhaustive survey. Confirm how Oregon's rules apply to your specific case with a licensed Oregon attorney.