One of the primary concerns that many people encounter after suffering a personal injury, for instance being injured in a car wreck, is how will the medical bills be paid. It can be common for people to think that if an accident was not their fault, then the at-fault party’s insurance should pay for the injured person to get the medical care that they need. Unfortunately, the actual process is more complicated.
Personal injury claims can only be settled with an at-fault liability insurer for a single sum and for a full and final settlement of the claim. What this means in practice is that the liability insurer should cover the medical expenses resulting from an accident, but only once all of the necessary medical treatment has occurred. This can be very frustrating for an injured person who, in the meantime, has to figure out the best way to get the medical treatment they need.
Sometimes, an injured person may be reluctant to use their own health insurance for accident-related medical treatment, since ultimately the at-fault liability insurer should provide compensation for the medical expenses as part of the final settlement. However, using personal health insurance to cover medical expenses until a final settlement can be reached can have several advantages. First, medical providers typically require full payment up front if they do not have a health insurance plan to whom they can submit the bill. Using health insurance can therefore relieve some of the financial burden on the injured person, since only the co-pay or out of pocket portion of the bill must be paid at the time of treatment.
Secondly, a major advantage of having accident related medical bills submitted to health insurance is the contractual write off. The contractual write off is the difference between the full amount of the medical provider’s bill and the actual amount that a health insurance plan pays to satisfy the bill. Health insurance plans negotiate contractual payment rates with medical providers that are substantially lower than the full billed amount in order to save money for their policy holders. So when the health insurance plan pays the contracted rate for medical treatment, the difference between that amount and the full billed amount is written off, meaning that the patient will ultimately not be have to pay that portion of the medical bill.
A third potential benefit of billing accident-related care to health insurance is that depending on the type of health insurance plan, it may not be necessary under Georgia law to reimburse the health insurance plan out of the final settlement with the liability insurer. This is due to a principle of Georgia law called the “made whole” doctrine. It holds that an injured person is not required to reimburse a health insurance plan out of a personal injury settlement unless the settlement has fully compensated that person for the full value of all of their damages, including the full amount of medical bills. When a claim is settled by a settlement agreement between the parties, the injured person will typically not be considered “fully compensated” because a settlement is a compromise between parties with opposing interests that requires each to concede something to the other in order to reach an agreement.
It is important to understand that not all health insurance plans are subject to Georgia’s “made-whole” doctrine, and in that case the health insurance plan is usually legally entitled to be reimbursed out of a settlement for any accident-related payments that have been made. Determining whether a health insurance plan is subject to the “made-whole” doctrine can be a complicated process and requires specialized legal knowledge, so the best course of action is to seek the advice of a lawyer when dealing with this issue.