Who pays the medical bills – a peek behind the curtain

May 03, 2014

Imagine you have just been injured in an automobile collision as a result of someone else’s negligence. You have incurred medical expenses. Who is responsible for these bills? Most people believe the person responsible for the collision is responsible for paying the medical bills. This is where legal theory and reality part ways.

Legal theory dictates that you are responsible for the medical bills you incurred. This is due to the fact that you sought the medical treatment; not some insurance company or the person responsible for your injuries. As such, you in essence “contracted for” the medical care and you are the one responsible for the medical bill.

The person responsible for the crash has a legal obligation to pay you your damages which includes the amount you paid for medical care. Their legal obligation is directly to you, not all of the medical providers who treated you. It can take time to finish treating and add up all of the medical bills that need to be reimbursed.  During this time however, medical providers want to be paid.

You may have health insurance to pay these medical bills. You also may have medical payment coverage in your automobile insurance to pay medical bills you incurred as a result of a collision. These contracts of insurance provide that these insurers will pay medical bills on your behalf . Their legal obligation is to you to perform under the contract with you. The medical provider’s contract is also with you to be paid by you for the medical services. Usually this process works and your insurer pays the bills on your behalf. Many medical providers offer to submit your bill directly to your insurer.

However, with medical providers charging more and more and insurers paying less and less we are seeing failures in this system. Some medical providers are refusing to accept payment from your insurers in an effort to gather a greater payment directly from you or even the responsible person’s insurer. Hospitals are becoming especially aggressive about pursuing a higher reimbursement through auto insurance.  Sometimes they submit it to multiple insurers in an effort to see who will pay the most. Sometimes hospitals get paid by multiple sources. This multiple billing and payment process can cause you problems because your insurers will all want to be reimbursed for their payments but the responsible party’s insurer will only want to reimburse you for the bill once. 

Sometimes, despite multiple layers of insurance that are supposed to protect you, this mad dash for dollars will cause a bill to fall through the cracks and begin hurting your credit.

Some medical providers want to bill your automobile insurance medical payment coverage as opposed to your health insurance. That however is not in your best interest as it depletes the relatively small amount of medical payment coverage you have in comparison to the large health insurance coverage you have. We hear excuses from medical providers that the health insurance companies will not pay if it’s a result of an automobile collision. That’s not true. We have yet to see a health insurance policy that says we will pay your health coverage unless you’re involved in a motor vehicle collision. What is going on in reality is the medical provider is attempting to get out of the discount rate they contracted for with the healthcare insurer and go directly to the automobile insurer where they can get paid the full amount of their bill.

Oftentimes, we have clients come into our office months after a collision occurred and we discover that their medical payment coverage on their auto policy has been used up by healthcare providers who treated the client in the front end. Now the client needs to have some diagnostic procedures performed which is not covered by their health insurance. Since the medical payment coverage has already been used up, the client is now responsible for the payment on these bills.

If at the beginning of the case we’re able to manage who pays what bill, we can maximize the coverages offered through health insurance and automobile insurance. In other words, the coverages should be coordinated to the benefit of the injured client, as opposed to the benefit of the billers.

But most insurance policies have a provision that allows the insurer to get their money back from the injured client if the injured client obtains that money from another party, in this case the person at fault for the collision or incident causing the injury. Sometimes that can be a perfunctory practice of reimbursing the insurer for the monies they’ve expended. Sometimes, however, there’s not enough funds to pay both the insurance company and the client, and the fight becomes who should be paid first? Obviously we side with paying the client first. Our view is that the health insurer or auto insurer has been paid a premium to provide coverage. The mere fact that their insured may be able to recover some money is not factored into the premiums that they charge nor any discounts they provide to the insured. Therefore any money that an insurance company recovers is a pure windfall profit. Since the insurance company did not suffer the actual injury or any of the hardships that follow from the injury, their interest should be behind the injured client. If we collect $1,000,000.00 for client A and have to turn around and pay out $1,000,000.00 to reimburse insurance companies then client A ultimately received $0. If however client B collects only $10,000 but has to pay out no monies then client B is better off than client A. As such, the hardest-fought battle in these cases can become where in line does the health insurer or medical payment insurer stand in relationship to the injured party. Do they stand in front of them to collect money first or do they stand behind them to be paid only if there’s enough money to pay the injured party? We view our job currently as a two front war. One front consists of collecting money on behalf of the client and the other consists of ensuring that this money actually benefits the client.

As that second war over keeping the money can be as intense or more intense than the original battle to collect the money, we see numerous situations where lawyers abandon their clients in those claims. We have had success defending our clients in those claims from local county courts all the way to the United States Supreme Court. 

Willis & Willis Co., L.P.A.
670 West Market Street
Akron, OH 44303

Local: 330-535-2000

Fax: 330-434-5248

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