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Value of Your Maryland Auto Accident Case, Part 7: Health Insurance and Medical Reductions

BCBS.jpgPayment of your medical bills is an important issue in a Maryland automobile collision case. There are a few possibilities:

  • You pay out-of-pocket
  • You pay with health insurance, Medicare or Medical Assistance
  • You pay with PIP (personal injury protection)
  • You don’t pay, and the bills are still outstanding
  • Some combination of these

The reason payment of medical bills is important is that you will get one dollar in your pocket for every dollar already paid, after taking into account case fees and attorney expenses.

Also, there is a rule in Maryland called collateral source. This means that the negligent driver’s insurance company cannot avoid paying your medical bills at settlement simply because those bills have already been paid by PIP, health insurance, or any other source. If the bills are reasonable and caused by the accident, a negligent driver is typically going to have to pay for them. There are good policy reasons behind this–the negligent driver should be punished, and should not receive the benefit of your preparation. If you pay health insurance premiums, and that reduces your medical expenses, it would be unfair for the defendant to reap the advantages.

If your health insurance pays for injuries caused by an accident, it is likely entitled to be paid back (per your contract with the health insurance company). Shortly after an accidental injury, you may receive a questionnaire from your insurance company looking for more details–this is their effort to determine if someone else was responsible for your injuries. Likewise, Medicare and Medical Assistance, if they make payments, are entitled to be paid back.

Here’s how paying medical bills with health insurance works to your benefit. Your medical providers issue a bill for services. Your health insurance has a contract with them that permits them to pay a lower rate. A statute permits you to pay back your health insurance company with a reduction of one-third of what they paid–sometimes we can even negotiate more. Part of the rationale is that you have to pay attorneys’ fees to get a recovery, so they should have to pay, as well. So here’s an example of how the math works:

  • Hospital bill: $2,000.00
  • Health Insurance pays: $1,250.00
  • Your obligation to reimburse: $833.33

So, when the negligent driver’s insurance company pays the full $2,000 in settlement, and you only have to reimburse $833.33, you “earn” an additional $1,166.67. This increases your take-home from an auto accident settlement.

If you don’t have health insurance, it may be possible to request reductions from your health care providers. Many orthopedists, physical therapy groups and chiropractors are willing to reduce the medical expenses when requested. Other health care providers can be reasonable as well–they understand the value of keeping their patients happy, and maintaining good relationships with lawyers.

The goal in any Maryland automobile accident settlement is get your medical expenses paid, and get you a suitable amount of money for your non-economic damages. Reduction of medical expenses is one tool we use to get you as much as we can.