It is really bad luck to be injured—but be aware that you will suffer
even more as you navigate the insurance systems that are supposed to pay
for your medical treatment.
If you have been injured in a car accident, you probably have “medical
payments” (med pay) coverage on your auto policy. All auto insurance
policies written in Colorado are required to provide a minimum of $5,000
in med pay coverage in case of an accident—unless the auto owner
declines the coverage in writing. Colorado law provides that “first
responders” (paramedics, ambulance and hospital emergency rooms)
have the first claim to your medical payments coverage. They will get
paid directly from your auto insurance. This means that their bills will
not be submitted to your health insurance first—so these bills,
amounting to thousands of dollars, will not count toward your health insurance
deductible.
Well, you say, the striking driver was at fault for the collision, therefore
his insurance should pay for my medical bills as they pile up. Then you
are in for the next surprise: the striking driver’s insurance company
will not pay the bills piecemeal. That insurance company will only pay
the bodily injury claim one time, in one lump sum. So you can’t
make a claim for compensation until you have recovered from your injuries—months
or years after you were injured. After that, you have to make your claim
for compensation to that insurance company, negotiate the amount they
will pay and, only then, will you receive the money (hopefully) to pay
off your medical bills. That process can take years. Your medical providers
won’t wait that long—they want to be paid now.
Once your med pay is exhausted, you should ask your medical providers
to bill your health insurance. Often they will agree to do that (of course,
that means that you are still responsible for those bills that come within
your annual deductible amount, whether or not you have the funds). But
sometimes they refuse to bill your health insurance, since they don’t
want to take a discounted amount for their services that they would have
to accept if they bill your health insurance. Instead, they may choose
to notify the auto insurance company of the car that hit you and demand
payment in full for your medical bills. It is true that the striking driver
and his insurance are ultimately responsible for your medical bills because
the driver was at fault for the collision. But, as noted above, the striking
driver’s insurance company will not pay the claim in pieces (certainly
not separately to each medical provider). It will pay only once and only
in one lump sum. This is where it can become crazy. Your medical providers
continue to submit their bills to you, demanding payment, at the same
time that they are submitting them to the striking driver’s insurance
company demanding payment.
If you find yourself in this crazy situation, you can submit your medical
bills for your auto accident on your own to your health insurance company
and hope that your policy requires them to pay your medical bills even
when they were caused by the negligent act of another person. Be aware,
though, that your health insurance company has a time limit for the submission
of bills, sometimes as little as a few months after the bills are incurred.
If they don’t get the bills within the required time limit, your
insurance company can refuse to pay your medical bills!
Even if your health insurance company pays your medical bills from the
car accident, your health insurance contract requires that, once you receive
the lump sum settlement from the striking driver’s insurance company,
you must pay your health insurance back the amount that they “advanced”
to pay for your medical bills.
The nightmare of trying to sort out the payment of all your medical bills
at the same time you are trying to recover from a car accident injury
will probably mean, for many people, that medical bills go unpaid. Then
you will get the calls asking for payment. If you don’t make some
arrangement to pay those bills, even on a very nominal monthly payment
plan, the bills will go into collections. If you are a typical law abiding
middle class citizen, this will be devastating to you as you consider
the effect this will have on your credit rating.
More than half of bad-debt collections on credit reports are associated
with medical bills, dwarfing other categories of collections according
to a study by the Federal Reserve Board. That affects about 43 million
consumers.
Very recently the national credit reporting agencies have agreed to provide
relief for these cases. In early March of 2015, the major national credit
reporting agencies reached an agreement with the New York attorney general
in a consumer fairness action filed against them. These agencies have
agreed that bad medical debts won’t be reported on the consumer’s
credit report until after a 180-day waiting period to allow time for insurance
payments to be applied. The agencies now acknowledge that the insurance
claims process takes time to work—sometimes many months. The agencies
have agreed to not penalize the consumer because of the delays in the
insurance process.
Further good news: even if the medical debt is reported delinquent after
180 days, the national agencies have also agreed to delete medical debts
when they finally do get paid—whether paid by the insurance company
or by the patient. This means that the fact of your medical bill going
to collections will not stay on your credit report after it has been paid
off. So medical debt, once resolved, won’t drag down your credit
rating and credit score for years.
You can protect yourself from the crazy nightmare of medical bills from
a car accident injury by consulting with an experienced professional injury
attorney. The attorneys at Clawson & Clawson LLP have years of experience
in navigating the crazy road of medical bills and insurance after a car
accident. Having experienced attorney representation in a car accident
injury will assist in getting your medical bills timely paid—and
obtaining the best monetary recovery possible for your injury.
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