Paying Medical Bills After a Car Accident

If you’ve been in a car accident, you know all to well that managing your finances can be very difficult while you recover from any injuries. Aside from your injuries from an automobile accident, the next most stress filled issue is how do you get the medical bills paid? Most of us want the one that caused the accident to pay for those bills. In fact, most of us don’t even want to involve either our health or automobile insurance companies. Since it was not our fault, why should we pay anything? The answer lies in tort and contract law.

The Law of Torts

In an automobile accident tort law applies. There are four elements to a tort: duty, breach of that duty, causation and damages. Even if you are not at fault, you must still prove the tort. That means you must establish the duty owed to you by the other driver. For example, the other driver who runs the red light and hits you breached her duty by not stopping at the red light. Once duty and breach are proven, you must show that any injuries or damages you suffered were directly and proximately caused by the other driver’s negligence.

All of this must be proven by a preponderance of the evidence. You will have to get all documentation supporting your medical treatment, loss wages and any other damages you suffered as a result of the accident. Because of this, insurance companies generally won’t pay for any of your outstanding medical bills or for that matter any damages until the case is either settled or tried to a jury. If tried to a jury and you lose, you will still have to pay back the outstanding medical bills.

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The Average Cost of a Non-Fatal Accident

$ 0

Economic Loss

$ 0

Property Damage

Insurance Contracts

A contract is a legally enforceable agreement between two or more parties. It may be oral or written. A contract is essentially a set of promises. Typically, each party promises to do something for the other in exchange for a benefit. The required characteristics of an agreement must have all the following; a legal purpose, mutual agreement, consideration and competent parties. Any deviations could void the contract. Contracts can be oral or in writing depending on the type of the contract. Nearly all policies of insurance – whether health or auto – are governed by the terms of a written insurance policy.

Generally, as a condition of employment, your employer will often offer health insurance coverage. If accepted, you will enter a contract with the insurance company to cover your medical bills. You will pay a portion of the premiums in exchange for the coverage. It does not matter if the medical bills are caused by the accident. Under the contract, they will be paid. However, once you settle your case or you win at trial, the health insurance company will want to be reimbursed for what they paid out. This is called subrogation or reimbursement of the medical bills. If not paid back, the health insurance company can sue you for the outstanding amount.

Medicaid and Medicare

This coverage is established by both state and federal statutes. Again, if you qualify for either coverage, both will cover your medical bills irrespective of being caused by an accident. Due to contracts that are entered between the health care providers and Medicaid/Medicare, the portion that is paid to the health care providers is usually very low.

Again, by statute, those balances must be paid back when the case settles or by a successful jury verdict. Again, if not paid back you can be sued for the unpaid balance. Due to recent legislation, the liability insurance company is put on notice of these liens. They will issue the payment directly to Medicaid or Medicare.

Medical Bills Piling Up?

Automobile Medical Payment Coverage

In many automobile insurance policies medical payment coverage is available for a premium. This coverage will pay only those medical bills that are directly and proximately related to the accident. That type of coverage called “medpay” will typically carry limits of between one to five thousand dollars. Again, your automobile insurance company will look to you for reimbursement under this coverage upon successful resolution of the case.

Health Care Provider's Choice of Payment

When you go to the hospital after an accident to get checked out the hospital staff will usually ask if you were in an accident. Sometimes they will not even take your health insurance, Medicaid or Medicare if they know you got hurt in an accident. The know that if they can get it from the other driver’s insurance company, they will get reimbursed at a rate of one hundred percent of the charged amount. This forum shopping by health care providers has been frowned upon by the Courts. Class action lawsuits for inappropriate billing of liability insurance represent a growing threat to hospitals across the nation. When an injured party comes to the hospital for medical treatment due to an automobile accident, the hospitals across the country have insisted that they give them the information of the liability carrier. This conduct incorrectly interprets the contracts related to liability insurance billing for accident claims.

In Dorr v Sacred Heart Hospital, the Wisconsin Court of Appeals, held that a provider agreement’s “hold harmless” clause prohibits the pursuit of liability insurance primary to the patient’s health insurance. The court found that a hospital should only seek payment for services rendered from the insurer in accordance with the terms of the provider agreement rather than from the liability carrier. In 2009, in an Oklahoma case, a provider health system was named in a class action alleging that providers within the health system were filing liens against the patient’s liability carrier rather than billing the patient’s health insurance company. The parties ultimately settled the litigation. However pursuant to the settlement, the defendant health system agreed to cease pursuing liens against the liability claims for patients with health insurance unless expressly allowed by the terms of the insurance policy.

In all these cases, the courts held that pursuing the liability insurance proceeds when health insurance is available is an attempt to seek recourse against the patient because the claim belongs only to the patient.