"clawback" of health insurance payments

General question for you attorneys out there who deal with health insurance claims and "clawback" of expenses paid, if a legal settlement is reached

I was talking with someone a few weeks back, who had sustained some significant injuries in an auto accident that was the fault of the other driver. Her health insurance had paid significant amounts for medical bills. She was in the process of suing the at-fault driver.

I have heard that many health insurance policies require repayment if the injured party receives a settlement, but I don't know anything about it. I asked her if her attorney had mentioned any such thing, and she admitted she didn't know. So I have two general questions:

1. Is it in fact a common clause in health insurance policies to have some sort of "clawback" or repayment clause in the event of the injured party receiving a settlement?

2. If her attorney DIDN'T mention it, if there is such a clause, would this likely be some sort of legal malpractice? I mean, if the settlement is completely or nearly eaten up by clawback and legal fees, why would anyone go through the agony of a lawsuit?

Again, I freely admit I know nothing about all of this, so I my be asking stupid questions here, in which case, my apologies!

It's called subrogation and is very common. Some states prohibit insurers from subrogating, so often fully insured health plans are prevented from doing so. Self-insured health plans are not subject to state anti-subrogation laws, so usually can subrogate more freely. The plan materials (plan document, SPD, etc.) should address the plan's subrogation rights. Usually, personal injury lawyers will send ERISA document requests to the group health plan sponsor at the outset to confirm whether the plan can subrogate.

Ok, thanks! I was just curious.