If you have been injured in a car crash, and have both motor vehicle insurance with medical payments coverage and also have health insurance, a new Virginia law that took effect on July 1, 2013, may give you additional benefits and protection. This new statute will impact claimants and their health insurance carriers, as well as hospitals and doctors’ billing departments. To understand how you may be affected, you first need to understand the interplay between health insurance and motor vehicle insurance under Virginia law.
People who are injured in a motor vehicle crash and taken to the hospital emergency room often sign a lot of paperwork on admission or before being discharged. Some of this paperwork is unrelated to medical treatment, but signs away rights of the patient. Obviously when you are injured, you are unlikely to read all the fine print required to get treatment. Sometimes the paperwork allows the hospital and doctor to refuse to bill your health insurance, and instead bill any auto insurance. Prior to this new law taking effect, if they did this, you lost the benefit of the health insurance that you had paid for, without even realizing it. Why would the doctor or hospital do this? Because usually they would get paid more on your bill from auto insurance than from your health insurance. So the doctor or hospital would wait for full payment of the bills out of the settlement rather than receive less money from your health insurance. Since many times you do not have to pay back your health insurance when you make a recovery from the person who injured you (or from their insurance company), you end up with less money if the doctor or hospital gets paid from your settlement instead of from your health insurance.
In addition, many people have on their own auto insurance policy a type of coverage known as “medical benefits” or “medical expense” coverage; this is also more commonly known as “medical payments” coverage. This coverage pays the medical expenses of you, your family, and anybody injured in your car, as a result of a motor vehicle accident. This coverage pays regardless of any other insurance, and regardless of whether anyone is at fault in causing the accident. Maybe the best part of this coverage is that it’s relatively cheap coverage, and that - under Virginia law – the insurance company cannot raise your rates if you make a claim.
Usually while you are waiting for treatment in the ER or at a doctor’s office, you will be asked to fill out some paper work. Included in that paper work is often an assignment of benefits (“AOB”) contract. An AOB contract allows the hospital or doctor to file a medical expense benefit claim on your behalf with your insurance company so that the benefits are paid directly to the doctor or hospital. Fortunately, with strong backing from our Firm, other law firms, and the Virginia Trial Lawyers Association, the legislature passed a law to curb these abuses and prevent Virginia consumers from being denied the benefits of both the health insurance and the auto insurance that they have paid for.
The new law that went into effect on July 1, 2013, changes how health care providers are allowed to communicate with and handle claimants and their medical bills. One part of the statute states that when a claimant is injured and receives treatment from a doctor, hospital, or other health care provider, then a provider who is in your health insurance plan cannot unilaterally refuse to bill your health insurance. Therefore, in-network providers can no longer refuse to bill your health insurance company, denying you the benefit of the health insurance you have paid for and the contract reduction of the bill which your health insurance has negotiated. Usually your health insurance plan or contract will have a time limit on how long you have to submit your medical bills to them (1, 2 or 3 years). Under this statute, if you as the patient provide your in-network provider with information to verify your eligibility under your health plan, and give this information to your provider not less than 21 business days before the plan’s deadline for filing a claim, then your provider must submit the claim or you will not owe the bill. So the in-network provider must submit a claim for the bills to your health insurance company or they might not get paid at all.
Another part of this same law specifies that an in-network provider under your health insurance plan cannot submit the bills to your health insurance under an assignment of benefits (AOB) agreement. If you have medical payments coverage, then you can submit the claim to your auto insurance directly, and the benefits will be paid to you. This new law could make a big difference in your net recovery from a personal injury claim. If your health insurance pays the in-network providers’ bills, at the reduced rate that has been negotiated by your health insurance plan, even if your health plan has a valid provision requiring you to reimburse them, that will still be less than having to pay the provider in full from your settlement or medical payments benefits. And sometimes your health insurance is not allowed to make you reimburse them if you make a recovery for the bills from an auto insurer or someone else responsible for causing your injuries.
All of this can be very complicated and daunting for a person to handle on their own. At the Allen Law Firm, our car accident attorneys are knowledgeable, trained and experienced in handling these types of issues that arise in a personal injury claim, and in the operation of the laws that affect settlements. If you need help, please give us a call.
 For an fuller explanation of Medical Payments Coverage, see blog post “UNDERSTANDING A MOTOR VEHICLE INSURANCE POLICY: MEDICAL PAYMENTS COVERAGE (VIRGINIA)”.
 See Va. Code § 8.01-27.5.B., at http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+8.01-27.5.
 See Va. Code § 8.01-27.5.B.(iii), at http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+8.01-27.5
 Unfortunately, if you have Medicare, are applying for Medicare, or may apply in the next 2 years, then your auto insurance company may be required to hold the funds until Medicare’s interests are taken into account. See “Federal Medicare, Medicaid, and SCHIP Extension Act of 2007” (as amended), applicable sections at 42 U.S.C. §1395y(b) at http://www.ssa.gov/OP_Home/ssact/title18/1862.htm and 42 C.F.R. §411.24 at http://www.law.cornell.edu/cfr/text/42/411.24. Similarly, if you receive treatment at a state hospital or through Medicaid, then your medical payments carrier will have to make sure that your bill has been paid before they will release the funds to you, because the state has lien against your medical payments benefits. See Va. Code §8.01-66.9 “Lien in favor of Commonwealth, its programs, institutions or departments on claim for personal injuries” at http://lis.virginia.gov/cgi-bin/legp604.exe?000+cod+8.01-66.9, and Va. Code §8.01-66.2 “Written notice required” at http://lis.virginia.gov/cgi-bin/legp604.exe?000+cod+8.01-66.5.