For years, our firm has encouraged clients to evaluate their automobile insurance policies and to consider adding or increasing various coverages. Among the coverages we typically advise clients to consider adding or increasing is medical expense benefits coverage, which is commonly referred to as “med pay.” Med pay is an invaluable part of any insurance package because it pays medical expenses for you and any passengers in your vehicle during an accident. The coverage extends to the named insured and certain family members residing in the insured’s household if they are injured while they are passengers in other non-owned vehicles, or if they are injured as pedestrians in a vehicular accident. Med pay benefits are payable regardless of who is at fault in the underlying accident triggering the benefits. Perhaps the most appealing feature of med pay coverage, however, is that the benefits are to be paid directly to the injured party asserting the claim. This is the case even where the injured claimant is covered under a health insurance plan. In those instances, any claim for med pay is limited to those expenses actually incurred by the health insurance company, plus any out-of-pocket expenses incurred by the claimant.
When it comes to med pay, the most glaring trap for the unwary (besides neglecting to purchase the coverage altogether) is unwittingly allowing medical providers to usurp the med pay instead of billing a claimant’s health insurance as they would in the ordinary course of business. Why is this a problem? It’s simple. Hospitals, physician groups, physical therapy facilities and other healthcare providers are often required to discount or “write down” treatment charges to satisfy contractual obligations with health insurance companies. It should come as no surprise that while these healthcare providers enjoy the large network of patients derived from these relationships, they can be reluctant to reduce their charges, particularly when med pay is available and tapping into it circumvents their contractual obligations to reduce treatment charges. Consequently, over the years, some healthcare providers implemented deceptive practices to avoid or limit these reductions. The primary method that healthcare providers have used is to require patients to agree to relinquish their med pay to the provider by executing an assignment of benefits.
An assignment of benefits is a contractual agreement under which a patient permits a healthcare provider to submit medical treatment charges to the automobile insurance company directly under the patient’s med pay coverage. Although entirely legal, assignments of benefits are often one-sided contracts. They are non-negotiable. Some providers refuse to treat patients who balk at accepting these agreements. This can be quite disruptive to the continuity of medical care which is absolutely essential in personal injury litigation. Assignments of benefits can deprive a patient of the benefit of his or her health insurance and the additional benefits afforded by the med pay coverage itself. In some cases, the patient is even left with out-of-pocket expenses which would not have been incurred had health insurance been billed.
Further compounding the problems with assignments is the regular practice of providers burying them within pages and pages of patient intake documentation. This tactic is intended to make them more inconspicuous, thereby increasing the likelihood of an unsuspecting patient signing them and handing over his or her med pay without issue. In fact, clients are often unaware that they have signed over their med pay in this fashion until they consult with an experienced personal injury attorney and are advised of the existence of a valid and enforceable assignment and the legal ramifications associated with it. In some instances, those consequences can reduce a personal injury client’s overall net recovery in a personal injury rather substantially.
At Allen and Allen, we viewed this practice as abusive, deceptive and in some instances, predatory. Members of our law firm lobbied the Virginia General Assembly to enact legislation to end to the unfair use of assignments of benefits. We are proud to have played a crucial role in the General’s Assembly’s decision to change the law to afford greater consumer protection in this area.
In July of 2013, the Virginia General Assembly modified Virginia Code § 38.2-22, the med pay statute, to impose rules governing the use of assignments of benefits. Under the current statute, an assignment of benefits is valid only if it is in writing, is signed and dated by the patient, and is provided to the med pay insurance carrier, the liability insurance carrier, and the claimant’s attorney via certified mail. Additionally, if the claimant does not have health insurance and the procedural requirements mentioned above have been satisfied, then the healthcare provider can bill the med pay carrier directly pursuant to an assignment of benefits and it must be honored. On the other hand, if the patient has health insurance and provides that information to the healthcare provider, and the provider is within the patient’s network, then the provider must bill the patient’s health insurance before billing the med pay carrier. If the patient has health insurance but has sought treatment outside the network, then the out-of-network provider is free to bill the med pay carrier without limitation.
If you are seeking medical treatment following an accident, here are some important things to know:
- Always provide your health insurance card to any and all medical providers involved in your medical treatment. Some providers will try to convince you that your health insurance should not bear the expense of treatment made necessary by someone else’s carelessness. Disregard this advice and use your health insurance unless your attorney has recommended otherwise. More often than not, anyone who tells you not to avail yourself of your health insurance is misleading you. Be skeptical.
- Where possible, seek medical services from in-network providers. Obviously, this will not always be possible, particularly if an injury occurs far from home or if the emergent nature of the injury requires that medical attention be sought as quickly as possible.
- Carefully read all patient intake forms and contact an attorney for advice concerning any forms or contracts which appear unclear or confusing. Do not sign anything you do not understand. You may be giving up some important rights. In fact, we strongly encourage our clients to call us immediately with any such questions. I have personally had clients call me from a provider’s waiting room to ask questions about a document before signing it. More often than not they are glad they made the call.
- Promptly review all explanations of benefits (EOB’s) from your health insurance company. This will not only allow you to confirm the proper billing of your treatment, it will also provide an understanding of any charges that were denied, the basis of the denial, and any time period for appealing a denial.
Med pay remains an important part of your insurance package. If you do not have it on your policy, contact your insurance agent and add it. If you have it, consider increasing the coverage. Most of all, be mindful of any deceptive billing practices aimed at separating you from your med pay coverage.
About the Author: Derrick Walker is an accomplished and experienced trial attorney in the Richmond, Virginia office of Allen & Allen. He has a solid track record in a wide array of personal injury matters including multi-million dollar awards in cases involving wrongful death, tractor trailer accidents, traumatic brain injury, and medical malpractice.