During an initial client meeting, we sometimes hear the client
say something like, “The other insurance company has accepted
liability, but they are now refusing to pay the medical bills I
send them.” Or - “I gave the other driver’s insurance information
to the emergency room billing department, but now they’re telling
me payment has been denied.” This view, while not uncommon,
reflects a misunderstanding about how the insurance claim process
works.
Assume that you are rear-ended at a red light and the insurance
company for the driver that struck you has accepted liability. In
Maryland and DC, there is still NO obligation for the other
insurance company to pay your medical bills as they are incurred.
The other insurance company, even if they agree that they are on
the hook for your injuries, will typically make but ONE payment
on your bodily injury claim, and that comes at the very end,
after all your medical care is done. At that point, they either
make a settlement offer that is acceptable or they lose at trial
and have to pay a judgment. A traditional settlement offer is
supposed to take into consideration the medical bills incurred by
the victim, lost wages, and a sum for pain and suffering.
If the other insurance company doesn’t pay until the end of the
case, how does the victim deal with the medical expenses that can
pile up long before the case is over? These are the typical
options -
1. Health insurance
We usually recommend that clients who have
their own health insurance try to run their accident visits
through health insurance. That way, the bulk of the bill is paid
for through insurance, and the victim is only responsible for co-
pays. This is not a perfect solution, however, as large
deductibles may mean none of the bills get paid until the
deductible is met. And, most health insurers can put a lien on
your accident case forcing you to reimburse their payments at the
end of your case. And, your choice of medical providers may be
limited to only those that accept your insurance.
2. Personal Injury Protection (PIP)
This is easily the best option for getting bills paid after a crash, BUT, the victim had
to have purchased PIP on their auto policy. We strongly recommend
this. PIP is sold by your auto insurer in increments of $2,500.
If you have PIP on your own auto policy, this coverage is
available pay early medical expenses, like your e/r bill or
therapy, until the benefit is used up. There are no deductibles
or co-pays that the victim must contend with. And the insurance
company who paid the PIP benefits cannot seek reimbursement for
those payments at the end of the case, so you keep more of a
settlement or judgment.
3. Pay Out of Your Own Pocket
Medical care is expensive and
this is not really an option for most people. But for those who
can afford it, paying a bill when it arrives at your house keeps
the creditors off your back. Send copies of the medical invoices
to your attorney to include in your claim, as well as a record of
any payments. A settlement offer at the end of a case
technically “reimburses” you for the medical expenses you
incurred/paid after a crash.
4. An Assignment If an attorney is involved in your case, some health care providers will agree to render medical care to you and then await payment until the end of the case. This is called an Assignment and Authorization. This allows you some access to injury care even if you can’t immediately pay the physician’s bill. You and your attorney sign a document agreeing to pay the doctor’s bill out of any funds recovered by settlement or trial. The downside of this option is it may limit the choice of health care providers who will treat you, and, worse, it increases the amount of bills to be paid out of your settlement or judgment, leaving you with a much smaller recovery.
While no one wants believe this is the month they get into a car
crash, collisions are inevitable. Medical debt can ruin a
household. Which of the 4 options would be the best option for
you if you were in a collision?
