How Medical Bills Are Paid (with and without insurance)?

When you or someone you love has been injured in an accident, one of the most common questions is, "How will the medical bills be paid?". 

Unfortunately, there’s no clear cut answer that applies to all, or even most, cases. Even if you have health insurance or Medicaid, it still may not be straight forward. The answer depends on a number of factors such as the state you’re in, whether you are pursuing a legal case, what type of existing medical coverage you have, how much out of pocket you can afford, and more. 

Health Insurance

If you have health insurance and they’re willing to cover treatment this is often your best option. That’s because many providers, especially hospitals, have strong negotiated rates for treatment that make health insurance the most cost-effective option. However, there are some drawbacks. Using health insurance may mean being subjected to deductibles, copays and/or coinsurance. For many common orthopedic issues treatment may be required two to three times per week lasting for a few months, so the out-of-pocket expenses can add up quickly. That is not an option for everyone. It also may be a good reason to seek financing to help pay these deductibles. Your personal injury law firm may be well positioned to help you figure out if the cost of financing is less than the cost of pursuing an option other than using health insurance. 

Additionally, there are many doctors who avoid treating patients for accident-related injuries, so there may be some limits to which in-network providers are available. And while health insurance’s negotiated rates will leave the medical bills greatly reduced, we want to make sure you know that the health insurance company may put a lien on settlement (the legal jargon is called “subrogation” if you want to google it further) forcing you to repay them out of your case if it’s successful. 

Medical Lien or Letter of Protection

Treatment on a lien or letter of protection means the physician is willing to treat now and will wait until settlement to get payment. If this arrangement sounds familiar, it’s basically the same “contingency” arrangement your personal injury lawyer has. Yes, there’s contingency doctors too. What a world. 

This option is only available when you have retained an attorney and will require your attorney to sign a document, similar to a promissory note, agreeing to pay the doctor before you get your share of the settlement. While these bills also add up quickly, one benefit is there are typically no upfront out of-pocket costs or deductibles. The drawbacks of treating on lien are the bills are almost always higher than health insurance, often much much much higher. Now, it’s true that an attorney will often be able to get your final balance reduced through negotiations with the providers, it still usually ends up being much more expensive than the health insurance route. One more thing to look out for: Often, providers who take liens have close relationships with the law firms. For example, they often refer cases to one another. So there are some additional conflicts and considerations to take into account that we’ve previously written about. 

Other Insurance

Depending on how the accident happened, there may be other insurance available. If you are injured at work, worker’s compensation will take care of your bills. In those cases, there are also strict rules about where you can treat.

If you were in an auto accident and are in certain states (listed here) there may be PIP or medical payments coverage available. If eligible, you would almost always use this coverage, as there’s no obligation to reimburse and there are no restrictions on where you treat so you can go to the doctor of your choice. 

Your Personal Injury Lawyer Should (but probably won’t) Help

It’s complicated and time consuming to manage all these medical treatment paying variables and decisions and ideally your law firm would help you figure it all out. Unfortunately, most law firms don’t. Instead they have a preferred way that they impose on all of their clients, usually referring you to lien providers, in order to make their own lives easier. Here’s one trick to know whether your law firm is doing a good job or bad job: if you have health insurance or Medicare and Medicaid, you should probably be using that. If you’re not, you should understand their reasoning and make sure it passes the smell test.

If you are seeing legal support and representation after an accident, head to Mighty's Accident Attorney Directory to find a trusted attorney in your area today.