Why Is My Auto Insurance Paying My Medical Bills?

By Joyce Novotny-Prettiman, Esq.

After an auto accident, many of our clients are surprised to learn that their own insurance company pays their medical bills regardless of who caused the accident.

In Pennsylvania, all auto insurance policies must provide at least $5,000 of coverage for medical bills, known as first-party coverage. You should check your policy to see how much medical coverage you have purchased. If you do not have personal health insurance, for example Blue Cross, HealthAmerica, or Medicare, you should consider purchasing no less than $10,000 of medical coverage.

If your injuries require extensive treatment, you may use up the coverage available under your policy; this is known as "exhaustion of coverage." At that point, your personal health insurance (Blue Cross, etc.) will take over payment of your medical bills. If you do not have personal health insurance, your unpaid medical bills become part of your claim against the driver at fault. However, it may take months or years to recover this money, and in the meantime you must pay these bills out of your own pocket. That is why first party medical insurance coverage can be so important – your medical bills will be paid quickly by your own company and no time needs to be spent determining who is at fault.

In an ordinary automobile accident case, how do your bills get paid? Shortly after the accident, your insurance company will assign an adjuster and claim number to you. This information is all that your health care providers (doctors, hospitals, etc.) should need for billing purposes. The law in Pennsylvania limits the amount that health care providers can charge for various services, which helps to stretch your medical coverage. If a hospital or other health care provider is not informed that you have been in an auto accident, you may receive a bill for the difference between the amount charged and the payment made by your auto insurance carrier (often called a balance bill). You should not have to pay this charge; instead, you should call or write the health care provider to advise that this bill results from an auto accident.

Does this procedure remain the same if your car is not involved in the accident? Yes! If you are in a car owned by a friend or family member, or if you are a pedestrian injured by a car, your auto insurance pays your medical bills. If you don't own a car, who pays your medical bills? Any auto insurance policy that covers a relative with whom you live is the first source of payment. What if no one in the household owns a car? You would next turn to the policy of the vehicle you occupied at the time of the accident.

Payment for prescriptions can cause confusion. Some pharmacies require that you pay for prescriptions out of your pocket, and then seek reimbursement from your auto insurance carrier. If you do this, you will only receive an 80 percent reimbursement from your insurance company. It is better to shop around for a pharmacy that will agree to bill your insurance carrier directly, leaving you with no out of pocket expense.

Usually, the payment of medical bills proceeds smoothly. Sometimes, however, your insurance company does not pay the bills. A procedure known as a "Peer Review" allows an insurance company to question and refuse payment of your medical bills if the insurance company can show that the treatment is not reasonable or necessary. If the Peer Review results are in favor of the insurance company, the bills in question will not be paid. The doctor or hospital cannot bill you for any treatment that a Peer Review finds to be unreasonable or unnecessary. You can dispute an unfavorable Peer Review. We have often helped our clients successfully overturn the Peer Review. To do this, we file a lawsuit on your behalf against your auto insurance carrier. We usually request the help of the medical provider who was refused payment. If you and your doctor believe that a Peer Review is wrong, you should consider taking such action.

In handling automobile accident cases, we at QR routinely endeavor to assure that all of the medical bills of our clients are properly paid by the appropriate insurance companies. If you have any questions about payment of your medical bills following an automobile accident, contact the personal injury department at QR.

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