Health insurance vs. car insurance: Protection for claimants in car accidents

If you have been injured in a car crash, and have both motor vehicle insurance with medical payments coverage and have separate health insurance, a Virginia law may give you additional benefits and protection.

first responders load patient into the er

One Virginia statute impacts claimants and their health insurance carriers, as well as hospitals and doctors’ billing departments.  To fully understand your benefits, 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, yet signs away the rights of the patient. Obviously, when you are injured, you are unlikely to read all of the fine print required to get treatment.

Will my health insurance cover car accident injuries?

Sometimes the paperwork allows the hospital and doctor to refuse to bill your health insurance, and instead bill any auto insurance. Prior to a specific 2013 law addressing the issue, if the hospital had done this, you would’ve lost the benefit of the health insurance that you had paid for, without even realizing it. Why would the doctor or hospital do this?

signing complicated medical paperwork

It is because they would often 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 for 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, is that it’s relatively cheap coverage, and that – under Virginia law – the insurance company cannot raise your rates if you make a claim.

How can I avoid surprise medical bills in the ER?

Usually, while you are waiting for treatment in the ER or at a doctor’s office, you will be asked to fill out some paperwork. Included in that paperwork 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 in 2013 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 rightfully paid for.

firefighters helping a injured woman in a car accident

This law 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.  Therefore, 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.

What if my medical bill paperwork and coverage are too complicated to understand?

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 at 866-388-1307.