Who Pays Your Medical Bills
After an Auto Accident?
Who pays your medical bills after an auto accident?
Ultimately, the careless person that caused your auto accident will have to pay you the amount of all reasonable medical bills that you incur to treat the injuries that the accident caused.
However, it can be months or longer before you make a claim against the negligent driver, so who pays your medical bills in the meantime?
PIP Is The First Choice
The first place that you turn to have your medical bills paid after an auto accident is your own insurance. Unless you specifically waived it, you have a kind of insurance called PIP, which stands for Personal Injury Protection. Some insurance companies call this coverage by another name, such as Economic Loss Protection, but almost everyone refers to this coverage as PIP.
Your PIP insurance pays your medical bills and (85%) of your loss of income, up to the policy limit. You must have at least $2,500 of PIP coverage, and you may have as much as $10,000.
I recommend that you get as much PIP insurance as your automobile insurance carrier will sell you. It is relatively inexpensive and it can be invaluable if you are involved in an accident.
After you are injured, you can get PIP claim forms from the person who sold you your automobile insurance.
Usually, your insurance company will send you three forms. One is an application for the benefits, and you complete this form.
You give the second form, usually called Wage and Salary Verification, to your employer to complete and document any lost income.
You give the third form to your doctor who provides information about your accident caused injuries.
Send in the PIP forms as soon as possible. You do not have to wait until you collect all of your medical bills. You can send in supplemental claims as new bills are received – or as more time is missed from work.
Your insurer has up to 30 days to pay your PIP claims after satisfactory proof of the claim is received. However, most insurance companies pay these claims sooner than that.
Most Maryland drivers have PIP insurance. Unless you specifically rejected it when you purchased automobile insurance, you have it. Check the pull out page that is in your preprinted insurance policy, commonly called the Declarations Page, to make sure that you have the coverage and the amount of the coverage. You can also call your insurance agent to confirm your coverage.
If you later recover money damages from the driver who caused your accident, you do NOT have to repay your PIP insurer.
Health Insurance Is Next
What do you do if you don’t have PIP insurance or if you exhaust your PIP policy limit?
Next you turn to your health insurance policy, if you have health insurance coverage.
If your health insurer pays your medical bills, you may be obligated to repay part of the amount that they pay for your accident-caused injury treatment, if you recover from the careless driver that caused the accident.
Here’s how that works.
Say, for example, that you go to a doctor and receive a treatment that costs $90. Chances are that your insurance company has an agreement with that doctor that will reduce the amount that the insurance company pays. Let’s say the insurance company pays $60 (although it could be less or more).
When you recover from the careless driver’s insurance company, you will have to pay your health insurance company 2/3 of the amount that they have paid for your treatment, assuming that you have a lawyer representing you and you pay the lawyer a 1/3 contingent fee for representing you. Effectively, you and your lawyer are serving as a collection company for the health insurance company. That is why the insurance company has to reduce its claim by the percentage of the fee that you are paying. Your lawyer does not make any more, but your health insurance company contributes to paying your legal fees.
So, in my example, the full value of the medical procedure is $90, but, if your health insurance pays $60 for that service, you will have to repay your insurance company $40 (2/3 of $60) if you recover damages from the driver who caused the accident.
If You Don't Have Either . . .
The biggest problems that we see are when an injured person does not have PIP insurance or does not have health insurance.
When that happens, one possible solution is to give your physician an “assignment” of the proceeds of your settlement. This is a legally binding document which instructs your lawyer to pay any balance due to your physician when your case is resolved, even before you are paid.
Doctors don’t have to accept assignments of this kind, but some health care providers may be willing to accept an assignment and wait for payment until your claim resolves, particularly if your lawyer assures the health care provider that your claim is strong.
Summary
So, in summary, when you incur medical bills as a result of an auto accident, you first submit the bills under your PIP insurance. If you don’t have PIP, or if it is exhausted, you submit the bills to your health insurance company for payment. If you don’t have health insurance, you hope that your health care providers will wait for payment until your claim resolves.
Did you notice that PIP also pays you for lost income?
Therefore, especially if you have health insurance that will pay medical bills that are not covered by PIP, you should give priority to lost income when you submit claims to PIP – since there is no other place to turn for reimbursement of your lost income. That is, until you ultimately submit your liability claim against the at-fault driver’s insurance.
To learn more about getting your medical bills paid after an auto accident,
contact us.
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