Why Medical Bills From Your Car Accident Should be Submitted to Your Group Health Insurance

"The bottom line is to submit the medical bills from your car accident case to your group health insurance carriers for immediate payment."

If you think you have a personal injury case resulting from a recent car accident, please contact the car accident injury attorneys at Lipkin & Higgins. We will work quickly and responsively to address your situation. There is no cost to you for a consultation with us.

You're Involved in a Car Accident. Fortunately you have Insurance

You’re involved in a car accident caused by another driver’s negligence. Your leg is broken. You need surgery. Five days later you are discharged from the hospital.  In a couple of weeks you begin physical therapy to increase the strength and range of motion in your leg. Therapy lasts four months. The medical bills start coming in, and you can’t believe how much they are: $78,000.00. Fortunately, you have health insurance benefits through your employer. You also have medical payments coverage (of $5,000.00) from your own car insurance policy.  But primarily you are thinking that since the car accident was caused by the other driver’s negligence, HIS insurance ought to pay your medical bills as they come in. Worse yet, you begin to receive collection letters seeking payment of your medical bills. What should you do?

The Bills are Your Responsibility

First, you must recognize that regardless of the reason for your medical bills, doctors provided service to you, and to no one else. The bills are 100% your responsibility. And doctors, like everyone else, do not want to wait 2 years for your legal case to resolve before they are paid. The negligent driver’s auto insurance company will NOT pay your bills for a number of reasons:

  • They won’t make payments in advance of a personal injury settlement or a jury verdict in your favor.
  • They are under a duty to compensate you only when the defendant is found liable for the car accident. This means trial (unless settlement is reached.)

Moreover, the defendant’s auto insurance company will not pay your doctors/hospital directly. Rather, the jury will decide the value of your case and the insurance company will pay that amount (same thing for settlement.)  How that money is divided is not the business of the defendant’s insurance company. Lastly, don’t expect defendant’s insurance company to make your life easier by paying your bills. Your financial struggles work to their benefit. Many a person has settled a personal injury case far below actual value because they need money sooner rather than later.

Submit Your Bills to Your Health Carrier

  • So, if the defendant’s auto insurance company is not an option, do you submit your medical bills to your car insurance company, under the medical payments provision? 
     
  • Or do you withstand the collection efforts of your doctors/hospital, and just wait until the end of the case when you receive compensation, before paying your bills?

NO! If you do, you will wind up paying more out-of-pocket for your medical bills than you have to.  What you should do is submit your bills to your group health insurance carrier.

Your group health insurance plan (eg. BlueCross, Aetna, Humana, etc.) provides you with a benefit you’ve likely never considered in paying your medical bills. It’s called a negotiated fee plan, under which your doctor or hospital agrees to provide service at a rate below billing charge. That is, your insurance company will say to your doctors and hospital “we will provide you with our insureds as patients, but at pre-approved rates.”  Once the doctor agrees to accept this negotiated, lower insurance company payment, you may not be billed for the difference between the negotiated rate, and the doctor’s billing rate.

[Note: If this is getting deep, please contact us. There is no cost for a consultation.]

To illustrate using the $78,000 figure from above: let’s say your health insurance company pays $40,000.00. Assuming your deductible/co-pay has been met, your $78,000 in bills have been satisfied for $40,000.  How does this benefit you?  Let's say the defendant has a $100,000 insurance policy, your damages are worth $100,000 and you don't have Underinsured Coverage greater than $100,000.

Common Fund Doctrine

Your insurance company will have a right to be repaid if your auto accident case is successful and you receive compensation (to prevent a double recovery).  But you will not repay $40,000, only $26,666.66, 2/3 of the total amount. Under the Common Fund Doctrine, the insurance company must pay your attorneys a 1/3 fee for legal services benefiting the insurance company in receiving them money from the defendant. The final result: you will have received credit for $78,000.00 in medical bills for your legal case, for which you will have paid $26,666.66 (in this example.) Your attorney's fee will be $33,333.33 (1/3 of proceeds) and you get the balance of $40,000.00.

Worst Case Scenario - Leave Your Bills Unpaid

You don’t obtain the same benefit by submitting your medical bills to your car’s insurance company under the medical payments provision of your policy. This is because medical coverage does not entail a negotiated fee payment plan. Medical payments coverage will pay your bills on a dollar for dollar basis. The worst scenario is to leave your medical bills unpaid until the end of your personal injury case, in which event your doctor/hospital have the right to seek 100% reimbursement of their bills (subject, possibly to the Illinois Lien Act.)  If you submitted bills to your car insurance company under Medical Payments, they will pay $5,000.00, you will have to repay them $3,333.33 (2/3) and then pay your  medical providers $73,000.00.  With a $100,000.00 settlement, your attorneys would still be entitled to their fee, leaving you with nothing.  Same result if you didn't submit any of your medical bills to an insurance company.

The Bottom Line: Submit Your Medical Bills for Payment

The bottom line is to submit the medical bills from your car accident case to your group health insurance carriers for immediate payment.  Your bills will be promptly paid, at a discount to you, and you will be able to claim the entire amount billed by your medical providers in your personal injury case.

If you have suffered injury due to the result of other's actions, please contact the personal injury lawyers at Lipkin & Higgins at (312) 857-1710.