Should My Health Insurance be Paying My Medical Bills, Especially When I am Not at Fault for the Accident?

Concerned woman trying to understand car accident medical billsOften times clients will ask who should be paying their medical bills, especially if they have health insurance.  I often hear, “why should my health insurance company pay my medical bills, when I’m not the one at fault.”  Or “why isn’t their (at-fault driver) auto insurance paying for my medical bills?”  The short answer is that by billing a client’s health insurance for their medical bills they incur from the accident, it usually puts more money in the client’s pocket at the time of settlement.  

Your other options at the time of injury (may) include:

  1. Medical Payments coverage from your own personal auto policy;
  2. Medical payments coverage from the owner's policy that owns the vehicle you are a passenger in (if you are not the owner.)
  3. A LIEN from the medical provider.

When health insurance is billed, they usually don’t pay the entire billed amount.  They have a previously bargained deal/contract that pays a percentage of that billed amount.  If the medical provider accepts that contractual amount, the provider also agrees to forgive or reduce the remainder balance of the bill that was not covered by your health insurance provider.  This leaves the bill either zero, or a small deductible or co-pay amount that is determined by one’s policy.  For example, let’s say a client has Blue Cross Blue Shield of TN health insurance, and they have a $5,000 hospital bill for the emergency room on the day of the accident.  Blue Cross Blue Shield would actually pay maybe $1,500 of that bill.  Then the hospital would maybe adjust off $3,500, making the balance due $0.  

This Puts More Money in the Client’s Pocket  

When we prepare and send a demand package on the client’s behalf with copies of all your medical records and bills, we are submitting the full bill to the insurance company for compensation.  We get to submit that entire bill, and the insurance companies are supposed to make their offers based on the full amount of medical bills.  BUT we only have to pay back the health insurance company the amount that was ACTUALLY paid.  So, in the above example, we would be getting the client compensated on the full $5,000 bill, but would only have to pay back Blue Cross Blue Shield the $1,500 that was actually paid.  

This puts more money in the client’s pocket. However, the insurance companies we negotiate claims with are fully aware of the reduction, and oftentimes assume the reduction is much greater than it is.   This is the reason why insurance companies typically make lowball offers.  They do not wish to pay the full bill, even if it is owed 100% in the case of people with no health insurance.  

Many medical providers, when presented with a personal injury patient, may oftentimes refuse to accept health insurance from third party providers, such as car insurance liability companies.  These third-party denials are becoming increasingly more common.    The doctors and hospitals prefer to deny third party claims, or go through medical payments coverage.   Why?  Because the power of the deals negotiated by carriers such as United Health Care, Cigna, Blue Cross Blue Shield, have reduced their reimbursements to next to nothing and they want to take the option that provides more money for their services.  There is no law that says they cannot bill your health insurance.   It is simply a choice, or a business decision by the medical provider as to how they want to get paid. 

Think about it this way, had you been involved in a single car accident where you ran off the road into a tree, your health insurance would pay your medical claims.  Why is it any different when the facts are slightly different and you have had the same injuries due to another car running you off the road?  It should not be.  Some providers believe that they must accept third party claims from the car insurance companies.  This is simply not true.  They can bill your case just as they would do had you been hurt falling off a ladder.  

Use Your Own Med Pay Coverage for Your Out of Pocket Deductibles and Co-Payments

I want you to use your own med pay coverage for your out of pocket deductibles and co-payments.  You should check your own private auto policy to see how much medical payments, or “medpay,” coverage you have.   However, be aware that you have to pay that medpay coverage back out of your settlement. 

If you have health insurance, we prefer the bills be presented to them immediately as opposed to leaving the balances in full, or having any MedPay coverage pay that might be available.  MedPay coverage through automobile insurance usually has to be paid back in full with little to no discounts.  If medpay pays $5,000, then they want $5,000 returned at the end of your case.   Think of medpay as more of a loan, than actual coverage which you paid a premium to obtain.   At the end of the day, we are wanting to put as much money in your pocket as possible, and using your own health insurance is one way of doing that.

The at-fault auto insurance is still “paying” for the medical bills incurred by the client at the time of your settlement.  They are supposed to make settlement offers based on the full amount of the medicals, but they cut corners and rarely ever do.  From the settlement offer, we pay the health insurance company’s claim, which is a process called “subrogation.”

Problems with LIENS

Lastly, hospital liens are formally filed documents that demand payment and are considered “notice to the world” if they have been properly filed with a courthouse.   These are called “Statutory Hospital Liens.”   In Tennessee, these liens are limited to 1/3 of the gross recovery of your case.  If you have a $100,000 hospital lien, but there is only $50,000 of insurance coverage, the lien may have to be reduced to $16,666.66, or 1/3 of the available recovery funds.  This is a very tricky situation and is something that deserves special attention in your case.  

There are also separate agreements called “Provider Liens” which are contractual obligations reinforced in writing between patient and provider, and sometimes the patient’s attorney.  These Liens bind you to pay for the doctor’s care at the time of settlement.  These are usually sought by chiropractors to secure payment for their bills at the time of settlement.  

Occasionally, some attorneys will miss liens.  If you miss a statutory provider lien, the attorney may become personally responsible.  Liens should always be taken seriously by you and your attorney.  They must be addressed, and not ignored. 

Get Legal Help From Our Personal Injury Attorneys

A big problem I see with people who try and settle their own cases without an attorney is that the injured person forgets, or is not aware, they owe their medical payments coverage back.  So you have, for example, $3,000 in medical bills which are paid by your own auto insurance company.  You settle with the other insurance company for the drunk guy that hit you for $2500 in your pocket.  You spend all of that money, then one day you get that letter in the mail that you were never expecting, from your own insurance company, that threatens to sue you if you do not repay them that $3000 that they paid on your behalf.   What do you do?  Well, it is too late at that point.  You owe the money.   There are things you can do to try and cut your losses, but the bottom line is… you got hurt, and after you settle, you owe money. 

Don’t let this happen to you.   If you are injured and have questions about third party denial claims, or how your bills are going to be paid after your car wreck, give us a call at (615) 807-7900 and let us make sure you come out on top. 

 

By John Griffith and Adam Selvidge

Be the first to comment!
Post a Comment