| By Matthew Clawson
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.