Hello there!
Lying down and waiting only works for when you are wounded and your health bar is painted red. You indeed lay down and let it recover until the red disappears and some green shows.
You can recover your health bar by using a Cure skill. You can get Cure skill from prey. Mostly bunnies but other prey also gives you Cure. Just look around the Wiki to find them. You can also buy them from the Skill NPC in Bazaar map.
Hope this helped.
