After a Georgia Car Accident, Who Should be Paying My Medical Bills?

How to use Med Pay and Health Insurance in Combination to Maximize the Advantages of Both Policies.
 
Many people have no health insurance at all and struggle to obtain quality health care after being injured in a car crash.  Surprisingly, some people actually have the opposite problem and have two different policies that can pay for their crash related health care.  This occurs when the injured person has both private health insurance and also Medical Payments (“Med Pay”) coverage.  Med Pay is available through your own auto insurer and provides coverage for any out of pocket medical expenses associated with a motor vehicle collision, regardless of how or why the collision occurred.  Med Pay policies usually have limits of between $5,000.00 and $25,000.00 per accident.  Unlike traditional health insurance, Med Pay has no deductibles or co-pays.  It pays 100% of accident related charges until the policy limits are exhausted.  Also unlike traditional health insurance, Med Pay does not have to be reimbursed from the settlement proceeds when a case is resolved.  Med Pay can even be used to repay your health insurer (if such repayment is required) when you settle your claim with the at-fault driver’s auto insurance carrier.   
 
Most health insurance policies have a clause requiring the person seeking accident related medical care to exhaust any available Med Pay Coverage before the health insurance policy will pay any accident related charges.  However, even health insurance policies that have this provision do not always enforce it.  If you are required to exhaust your Med Pay coverage before using your health insurance, your choice of which coverage to use first will have been made for you.  You will submit all bills to Med Pay until that coverage has been exhausted and will submit the rest of your bills thereafter to your health insurer.
 
The trickier issue is how to use your health insurance and Med Pay coverage for maximum benefit if given the choice of which coverage to use first.  There are advantages and disadvantages to using either one.   Let’s look at the various options for paying for the initial emergency room treatment and see how an accident victim fairs under different payment scenarios.  We will assume that the accident victim was admitted to North Fulton Medical Center Emergency Room with complaints of headaches, neck pain, back pain and a gash above his right eye.  He undergoes a series of x-rays, and MRI of his head, and has 5 stitches above his right eye.  After about 4 hours, he is released with instructions to follow up with an orthopedic doctor for additional care.  His emergency room bill is $17,000.00.  The man has $10,000.00 in available Med Pay coverage and also health insurance through his job (with United Healthcare).  
 
Example 1:  Med Pay is Used First to Pay the Emergency Room Bill
 
                Because Med Pay does not have a contractual relationship with the Hospital Emergency Room, it will have to pay the full “sticker price” of the bill.  So, if the injured person submits the North Fulton Emergency Room bill for payment under his Med Pay policy, Med Pay will send a check for $10,000.00 directly to North Fulton Hospital (which is all the available Med Pay coverage).  The remaining $7,000.00 of the Emergency Room bill will be sent to United Healthcare.    United Healthcare does have a contractual relationship with North Fulton Hospital and will pay $2,000.00 to satisfy the remaining balance of the bill (except for any co-pay or deductable).  The patient will still owe about $300.00 for his co-pay.
 
                In this example (where Med Pay pays first), the entire bill gets paid except for a $300.00 co-pay which the patient will be responsible for.  However, the Med Pay policy is now exhausted and cannot be used for any additional accident related healthcare.  This means that all future care will be subject to health insurance co-pays and deductibles.  Also, the patient is stuck paying the $300.00 co-pay.  Finally, when the patient settles his personal injury claim with the at-fault driver’s insurance company, he will probably have to reimburse United Healthcare for the $2,000.00 it paid towards his Emergency Room bill (and for any other crash related medical bills he subsequently incurred).  
 
Example 2: Health Insurance is Used First to Pay the Emergency Room Bill
 
                Because United Healthcare (UHC) does have a contractual relationship with North Fulton Hospital, UHC will only have to pay $5,000.00 to cover the entire emergency room bill.  However, this will leave a co-pay of $1,000.00 for the injured person to pay.  The injured person can then submit the $1,000.00 co-pay to his Med Pay carrier for payment.  Under this scenario, the injured person will have $9,000.00 in Med Benefits remaining (to be used for future treatment) and will not be out of pocket any money at all for co-pays (since Med Pay is paying for the co-pay).
 
                When it comes time to settle his case against the at-fault driver, the injured person will have a higher health insurance reimbursement claim from UHC (since UHC has paid more of the bills than in Example 1).  However, Med Pay can be used to reimburse UHC at the end of the case.  The injured person, therefore, does not have to pay any of the settlement money to reimburse the health insurer, and also does not have to pay any co-pays along the way (as long as there is enough Med Pay available to cover them).
 
Conclusion
 
                Based on the outcomes in the two examples discussed above, it is clear that accident victims who have both private health insurance and Med Pay should always try to use their health insurance first and hold on to the Med Pay benefits for as long as possible.  This will allow the injured person to avoid having to pay deductibles (since Med Pay will pay them) and will also allow any remaining Med Pay benefits to be used to reimburse the health insurer at the end of the case.  Coordinating benefits can make a surprisingly large difference to the bottom line.  Any effort spent in getting this right will be well worth the time.