It depends on four deductions: the attorney's fee set in your written agreement, case expenses, medical liens and reimbursement claims, and any amounts already advanced. Texas law limits what many health insurers can take back from a represented person, and liens are often negotiated down before the money is split.
Start with the gross amount and work down. The attorney's fee is a percentage of the recovery stated in the written contingent fee agreement, and the agreement also says whether expenses come out before or after the fee is calculated. Case expenses, such as records, filing fees, depositions, and experts, are listed separately on the closing statement.
Medical claims come next. A hospital that treated you after the crash may hold a lien against the recovery under Property Code Chapter 55, limited to reasonable charges. A health insurer that paid crash-related bills may claim reimbursement. Under Civil Practice and Remedies Code section 140.005, when you are represented by a lawyer, the share many insurers can recover is limited to the lesser of one-half of your gross recovery or the benefits they paid, in each case reduced by their share of attorney's fees and costs. Many employer self-funded plans follow their own plan terms under federal law instead.
Medicare is different. Under the federal Medicare Secondary Payer law, 42 U.S.C. 1395y(b)(2), Medicare's crash-related payments are conditional and must be repaid from a liability settlement. Medicaid and some other programs have their own reimbursement rules. These claims must be resolved before the client's share is paid.
Some things usually do not come out. Personal Injury Protection your own insurer paid generally does not have to be repaid from your recovery, because the PIP insurer has no subrogation right unless the at-fault driver lacked required insurance. Compensation for physical injuries is generally not federal taxable income under 26 U.S.C. 104(a)(2), though interest and punitive damages usually are.
The closing statement shows every line before any money is distributed, and you approve it. Owsley Law Firm walks clients through that math and negotiates liens to increase the net, with no fee unless it wins.
What to do, step by step
- Read the fee and expense terms in your written agreement.
- Get a list of every lien and reimbursement claim.
- Ask your lawyer which claims can be reduced.
- Review the closing statement line by line before signing.
The order of deductions matters. Whether expenses are subtracted before or after the fee is calculated changes the net, and the written agreement controls it.
Lien reductions are negotiated, not automatic. Documentation of the attorney's fees and costs, and of the client's other losses, supports a request for a lower payoff.
Mistakes that cost people money
- Signing a release before liens are identified.
- Assuming PIP must be paid back.
- Ignoring a Medicare conditional payment claim.
Related questions
Can a hospital take my whole settlement?
A hospital lien is limited to reasonable charges for crash-related care, and it can often be negotiated.
Does my health insurer get paid back?
Often, depending on the plan. Texas limits many insurers' recovery when you are represented, but self-funded employer plans may follow federal rules.
When do I get my money?
After the release is signed, the payment clears the firm's trust account, and liens are resolved, according to the closing statement you approve.
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