Major Medical Insurance. If you have major medical insurance coverage, like a PPO or an HMO, most likely provided through your employment, try to run all your bills through this coverage first. The reason you want to do this is because your insurance, whether Blue Cross Blue Shield, Aetna, Kaiser, United Healthcare, etc., will pay a contract amount set by a fee schedule in full payment to the medical provider. This amount is likely significantly less than the actual amount of the bill itself. The effect of this is that when your case settles, instead of having to pay the full amount of the bill, at most you will only have to reimburse your insurance company for the amount they paid on the bill, which is often a significant savings. Oftentimes your insurance company is not entitled to be reimbursed, and even if it is entitled to reimbursement, the insurance company will take a compromised amount, further reducing what must be paid back and putting more money in your pocket.
For example, the emergency room bill is $10,000 and Blue Cross Blue Shield pays $4,000 in total payment of the bill according to its fee schedule. Assuming Blue Cross Blue Shield has the right to reimbursement out of your settlement, you immediately save $6,000 by having Blue Cross pay the bill. It is further possible that Blue Cross will compromise that amount at a minimum by deducting the percentage of attorney’s fees (which per-suit are typically one third) and will accept $2,800. If this happens, you end up saving $7,200 (which goes to you) by Blue Cross paying the bill.
Medicaid and Medicare. Medicaid and Medicare work a lot like major medical insurance. If you do not have major medical insurance but you are covered by Medicaid or Medicare, if you can, you will probably want to run your medical bills through Medicaid or Medicare before using any other type of insurance. The reason for this is that most medical providers, including hospitals, are required to take Medicaid or Medicare payments that are set by a fee schedule in total payment of the actual bill. As with major medical coverage, Medicaid and Medicare will have to be reimbursed, but the reimbursement amount will most likely be significantly less than the actual bill itself, again putting more money into your pocket when the case is settled. There is a problem, however, when dealing with Medicaid and Medicare. Both of these entities can be difficult to communicate with to determine the amount that needs to be reimbursed. Medicare is the more difficult of the two to communicate with. Also, there is another potential future problem with Medicare. There have been very serious discussions by Medicare about requiring setting aside money from a settlement to fund future medical treatment that may be related to the accident. The effect of this is that it takes money out of the settlement that would have gone directly to the client. This is already done in workers’ compensation situations, and can be a real problem if it becomes applicable in personal injury lawsuits. At this time, however, it does not appear to apply in this arena, and notwithstanding these problems, if the only coverage that is available is Medicare coverage, it should be used to pay the bills.
Medical Payments Coverage. Often, our clients have medical payments coverage (MPC) provided through their own automobile insurance policies. If they also have major medical coverage, Medicaid, or Medicare we strongly suggest that clients use the major medical or Medicare or Medicaid first to pay the bills and to use the MPC to reimburse the provider later. That way the client still gets to take advantage of the fee schedule required by the insurance company or government entity. The medical payments coverage can then be used to reimburse the major medical insurance or Medicare/Medicaid, putting more money in the client’s pocket.
For example, assume a $20,000 hospital bill and that the hospital takes $5,000 from Blue Cross Blue Shield in full payment. Assume you have $10,000 in MPC on your automobile insurance coverage. If you use the $5,000 to reimburse Blue Cross Blue Shield, you end up paying nothing for the $20,000 hospital bill. If you use the medical payments coverage to pay the hospital directly, you would still owe $10,000 to the hospital. This is because you do not have a fee schedule or contract with the hospital to pay an amount in full less than the actual amount of the bill.
Of course, if you do not have major medical coverage or Medicare or Medicaid, you will want to use your MPC to pay your bills. Even though there is no contract and no fee schedule with the medical provider, once the bill is paid by the MPC you no longer owe that amount. The savings here will equal the amount of the bill that is paid.
Treat with a medical provider on a lien. This option is really only acceptable if you do not have any major medical coverage, Medicare or Medicaid does not apply, you have no medical payments coverage, and you cannot afford to pay yourself. Of course, the first reason this is not a good option is because you will be paying out of your own pocket and/or your settlement. The second reason is that many times medical providers — like chiropractors — who will treat on a lien have bad reputations with insurance companies, and your case may not be taken seriously by the insurance company if you treat with one of these medical providers.
Pay for your treatment with cash or credit card. This is your final option. If you do not have any other sources of payment and the medical provider will not treat you on a lien, you will have to come up with the payments as you go. This can be done with cash, check, or a credit card. If you can pay cash, you should do that first. If you cannot pay in cash, use a credit card if you have one. Even though there will be interest on the payments, if you need the treatment to heal, you should try to get it any way you can and this will help your case. If you don’t treat when you are in pain or the treatment isn’t consistent, it becomes almost impossible to get a jury to believe you were injured. Unfortunately, the fact that you could not afford the treatment is not admissible in Georgia as an excuse for not getting treatment.
