At first glance, the answer to the question “I have been injured in a car accident. Who will pay my medical bills?” is a simple one. Massachusetts is a “no-fault” state. At least initially, the car insurance is required to pay your medical bills and wage losses that resulted from the motor vehicle collision. There are numerous exceptions to the rule, many of which I will discuss in the body of this article. Some of the exceptions are intentional, such as the absence of the coverage for injuries resulting from the injured person’s drunk driving or drag racing and the lack of coverage for motorcyclists. Others derive from the fact that Massachusetts is not a pure no-fault system, but instead a hybrid system. Medical expenses need to be coordinated with private health insurance. Wage loss claims are subordinate to disability insurance and other payments, including payments by the employer. The most gnawing exceptions derive from complications involved in administering a hybrid system and the no-fault rules themselves. However, in the case in which there is no private health insurance and there are no no-fault deductibles, extraordinary exceptions or technical problems, the automobile insurance will pay your first $8,000.00 of medical bills, and wage losses regardless of whether or not you were at fault in causing the accident.
In Massachusetts, our “no-fault” coverage is called “Personal Injury Protection” or PIP. If you were to run a stop sign and hit another car so that the accident is unambiguously your fault, the PIP coverage is still available to pay your medical bills and wage losses. However, there may still be issues of paperwork, cooperation, and documentation. The insurance company also has the right to challenge and adjust your bills and even to have you examined by a doctor of their choice. As a result, even the “simple” case where there are no health insurance benefits to “coordinate” may not be so simple.
COORDINATION OF BENEFITS WHEN THERE IS PRIVATE HEALTH INSURANCE
What I have been described before is the “simple” case. When there is private health insurance, things get a lot more complicated. We have to engage in a process called “Coordination of Benefits”. Massachusetts has a ridiculous system in which the automobile insurance pays the first $2,000.00 of medical bills, and then the bills are submitted to health insurance. To the extent that health insurance does not pay because there is a co-pay, or a deductible, or the service that you received is simply not covered by insurance (e.g. acupuncture or massage therapy) then the bills go back to the automobile insurance for payment. The obvious problem is that it is not apparent, at least early on in the case, who the provider should send the bill to. The health insurers have done everything in their power to make this process as painful as possible. They will punish doctors who send them bills that should have gone to the automobile Personal Injury Protection carrier. However, the health insurers will also refuse to pay doctors’ bills if they are not submitted on time. So a doctor can get in trouble for billing the health insurance too early, before the Personal Injury Protection Benefits have been exhausted, and the doctor can also get in trouble for not billing on time when the Personal Injury Protection Benefits have been exhausted. This is a major reason why so many healthcare providers prefer not to deal with car accidents at all.
There is also the “Dominguez problem,” as in Dominguez v. Liberty Mutual, which changed our world when it was handed down in 1999. The Supreme Judicial Court held in Dominguez that if your health insurance does not pay your medical bills because you did not follow their rules, then Personal Injury Protection does not have to pay your bills either. This can be a problem when you have an HMO, because HMOs have so many rules. It is easy to violate them. For example, if you go to an out of network provider or fail to get the proper referral, Personal Injury Protection is not going to pay. This is a particular problem in automobile accidents. Even though you may be a person who has never had a problem staying within network or getting a proper referral, you may find that you are having exactly those problems in your auto accident case. Providers are not always so careful in accident cases to make sure that they make a proper referral. Primary Care Physicians do not always realize that you still need a referral, because they assume that the car insurance is paying for it. Chiropractors and physical therapy clinics, among others, may copy your health insurance card, even though they do not take your insurance. It is a big problem. Worse, you usually do not know, or even have a reason to suspect, that you have a problem until it is too late to fix it. An unscrupulous provider will then try to take part of your settlement (or come after you personally) after misleading you into thinking your health insurance will pay.
The problem of out of network providers opens up another unusual problem that is unique to a motor vehicle collisions. Ordinarily, providers such as doctors, physical therapists, and chiropractors will not see you if there is no insurance to pay them, unless you pay them up front. With most providers, they will not see you unless they have some understanding of how they are getting paid. If you have health insurance, they will turn you away if they do not have the proper referral, or are not plan providers. However, there are providers who would prefer not to accept your health insurance. They do not accept any HMOs or other such plans. If they told you that, and you chose to treat with them anyways, I would have no issue with that. However, when they take your health insurance card, copy it, and act like they are a plan provider, then I do have an issue. They are looking to get paid at settlement time. I believe that all providers are entitled to get paid for their work. As a matter of fact, my office probably works harder to get the providers paid than we work to settle most claims. The reason is that the coordination process is just that complicated. We often have cases settled before we have all the providers paid. However, I also believe that providers should be paid in the manner that the patient intended them to be paid. If the patient expects that the provider will be paid with the health insurance, then that is the way the provider should be paid. It is not appropriate for a doctor or a therapist to say at the end of the case that they do not accept the health insurance and that they want to be paid from the settlement. We have gotten into some nasty fights over the years with various providers, even some who outside of the office are friends of mine, over this very issue. In fact, there are some people who are no longer friends of mine because of this very issue.
WHAT HAPPENS IF I HAVE MEDICARE OR MASSHEALTH?
The coordination of benefits rules I described only apply to private health insurers. Medicare and MassHealth are not private health insurance. As such, we treat Medicare and MassHealth as if they do not exist. The automobile insurance is responsible for the first $8,000.00 of medical expenses. However, sometimes they pay even though they are not supposed to. Also, MassHealth will pay for your prescriptions and that is a good thing. PIP will reimburse Medicare and MassHealth, as long as the $8,000.00 has not been used up (exhausted). Besides the fact that your prescriptions get paid up front by MassHealth, and get reimbursed by PIP, there is another huge advantage to Medicare and MassHealth. If you have more than $8,000.00 of medical expenses, then Medicare or MassHealth kicks in like they ordinarily would. They need to be paid back when the case is settled, but at least your bills are being covered. What is more, if there is no settlement because the accident was your fault, your bills are still paid.
PRIVATE HEALTH INSURANCE EXCEPTIONS
There is also an important exception to the role of private health insurance. Some large companies have what are known as “self-funded plans.” These are commonly misidentified as “ERISA plans.” Calling them “ERISA plans” is not accurate. The difference between a self-funded plan and employer provided health insurance is that with employer provided health insurance, the health insurer itself pays the bills and carries the risk that you will get sick and the benefit if you stay healthy. With the employer self-funded plan, the health insurer is merely the plan administrator and ultimately it is the employer that pays the bills. My office is small, so we have regular health insurance. If everyone in my office were to get very sick and require hundred of thousands of dollars of medical treatment, that would be a problem for me on a number of levels, but I would not be paying any of those bills. If all my employees stay healthy and never see a doctor, that would be good for me on a number of levels, but it would not save me any money on medical bills. If I were to have a self-funded plan, then the first scenario would result in my bankruptcy and the second scenario would save me a lot of money. This is why we only see self-funded plan among large companies.
Another big problem is that a lot of doctor’s offices do not like working with automobile insurers, and thus refuse to. I have encountered family doctors in the City of Lowell who refuse to see their own patients when their patients have been injured in motor vehicle accidents. There are any numbers of doctors who will turn away new patients who have been involved in automobile collisions. Not only are healthcare providers put off by the unreliability of auto insurers as actual payers, but there is also the issue of the automobile insurers imposing paperwork and documentation requirements on the providers that the health insurers do not. As a result, while they may be very comfortable taking a case in which they only have to deal with Blue Cross or Harvard Pilgrim, they will turn away that same patient, or charge that patient up front, if there is a necessity of dealing with the automobile insurance.
Sometimes the problems may even be created by the lawyers themselves. I have had a number of providers accept cases from my office after they have told their patients that they do not treat motor vehicle accidents. We have been advised that they have stopped taking collision cases because they are not getting paid. However, they will take my clients because they have not had that problem with me. There are many ways for a lawyer who is not experienced in this field to mess up. It is unsurprising that the doctors get fed up with that. It is extremely easy for a patient who does not have an attorney to run afoul of this system, so it is certainly understandable when the provider insists that the patient get an attorney. I have also had providers who refused to treat collision injuries accept my clients for a different reason. I believe that it is unethical for doctors to refuse to treat, or at least refer, their own patients when they have been injured. I also believe that it is a violation of their contract with the health insurer. Generally speaking, when I make clear to the providers that I am prepared to check my belief with their licensing board and with the health insurance carrier, they understand that it is easier to take the risk of not getting paid than it is to deal with all of the trouble that I am prepared to create for them. This is especially true when a doctor has an easy way out. All they have to do is to give my clients the proper referrals and they do not need to see their patients at all.
Although there are many things that could go wrong, it is a general rule that if you are injured in a motor vehicle accident, your medical bills will all be paid. I hope someday to discuss the issue of special investigations as well as the issue of abnormally large medical bills, but this article is running a little long. The takeaway from this article though is that the process is more complicated than it should be. The solution is simple. First, it is very important if you are going to have significant medical expenses arising from a traffic accident that you obtain an attorney who has considerable experience in this area. It is not necessary that they have handled ten thousand such cases, as I have, but you do not want somebody who has only handled a few hundred either. You definitely do not want a lawyer who dabbles in the area of motor vehicle accident law.
Second, you want to contact your family doctor as soon as you can. These cases simply run better when your primary care provider is making all the right referrals. Although these cases can be complicated, I tell my clients that they should just worry about treating and getting better, and let me worry about the rest. If you are working with a good accident lawyer and treating with your family doctor, the problem of “who pays my medical bill,” should solve itself.