Why You Should Submit the Medical Bills from Your Car Accident to Your Health Insurance ASAP

A stethescope on a table.

“The bottom line is to submit the medical bills from your car accident case to your group health insurance carriers for immediate payment.”

You’re Involved in a Car Accident. Fortunately, You Have Insurance.

You’re involved in a car accident in Sevierville, TN, caused by another driver’s negligence. You have two herniated discs and a broken arm. You need surgery. You are discharged from the hospital after three days and are still in shock. The accident happened so fast. You don’t know how you are going to manage your medical bills since you can’t work due to your injuries. In a couple of weeks, you begin physical therapy to increase the strength and range of motion in your back and arm. Therapy lasts four months.

The medical bills start coming in, and you can’t believe how much they are: $83,000. Fortunately, you have health insurance benefits through your employer. But, your health insurance tells you that since the car accident was caused by the other driver’s negligence, his insurance ought to pay your medical bills as they come in. You agree—heck yeah, his insurance should pay! So your health insurance doesn’t pay the medical bills from your car accident submitted by your doctors and the hospital. Your health insurance tells your doctors to submit your bills to the at-fault driver’s insurance company for payment. While your insurance company is busy playing “pass the buck,” you begin to receive collection letters seeking payment of your medical bills. What should you do?

The Bills are Your Responsibility

First, you must recognize that regardless of the reason for your medical bills, doctors provided service to you, and to no one else. The bills are 100% your responsibility. And doctors, like everyone else, do not want to wait two years for your legal case to resolve before they are paid. The negligent driver’s auto insurance company will not pay your bills for a number of reasons:

  • They won’t make payments in advance of a personal injury settlement or a jury verdict in your favor.
  • They are under a duty to compensate you only when the defendant is found liable for the car accident. This means trial (unless settlement is reached).
  • Moreover, the defendant’s auto insurance company will not pay your doctors/hospital directly. Rather, the jury will decide the value of your case and the insurance company will pay that amount (same thing for settlement). How that money is divided is not the business of the defendant’s insurance company. Lastly, don’t expect the defendant’s insurance company to make your life easier by paying your bills. Your financial struggles work to their benefit. Many a person has settled a personal injury case far below actual value because they need money sooner rather than later.

Submit Your Bills to Your Health Carrier

Your group health insurance plan (e.g., BlueCross, Aetna, Humana, etc.) provides you with a benefit you’ve likely never considered in paying your medical bills. It’s called a negotiated fee plan, under which your doctor or hospital agrees to provide services at a rate below billing charge. That is, your insurance company will say to your doctors and hospital “we will provide you with our insureds as patients, but at pre-approved rates.” Once the doctor agrees to accept this negotiated, lower insurance company

payment, you may not be billed for the difference between the negotiated rate and the doctor’s billing rate.

Note: If this is getting deep, call us—we can help. There is no cost for a consultation.

To illustrate using the $83,000 figure from our example: you take my advice and submit your related medical bills to your health insurance. Let’s say your health insurance company pays $36,000 based on the contractual adjustment the company previously negotiated with your various providers. Assuming your deductible/co-pay has been met, your $83,000 in bills have been satisfied for $36,000. How does this benefit you? Let’s say you receive a $125,000 settlement from the at-fault driver. Your insurance company will likely have a right to be repaid if your auto accident case is successful and you receive compensation. But you will repay only $36,000 to your health insurance provider out of your settlement proceeds, instead of the $83,000 you would have been on the hook for had you not received the benefit of your health insurance’s contractual adjustment of $47,000. By processing your bills through your health insurance, you got to keep $47,000 more of your settlement in your pocket. (Not to mention, the bills got paid on time so your credit is still intact.)

Note: There are certain exceptions in Tennessee law, such as the “Made Whole Doctrine,” where injury victims aren’t required to repay their health insurance out of settlement proceeds. My upcoming blog post will address when those exceptions apply.

The Bottom Line: Submit Your Medical Bills for Payment

The bottom line is to submit the medical bills from your car accident case to your group health insurance carriers for immediate payment. Your bills will be promptly paid, at a discount to you, and you will be able to claim the entire amount billed by your medical providers in your personal injury case.