VIDEO TRANSCRIPT:  Hello everybody this is Robert Mansour and I wanted to make a brief video today about the issue of medical payments coverage. Medical payments coverage is something that a lot of people have under their insurance policy, and they're not even aware of it. Your auto insurance policy may have some coverage for you called medically payments coverage, or MPC. And what that means is they basically serve as a health insurance company for you.

So, let's say you don't have health insurance. If you have medical payments coverage under your auto insurance policy, they might be able to pay for your health care coverage, or your health care needs after an auto accident. Now, it's important to know what the limits are of your medically payments coverage. So, for example you, might have $2,000 available to you or $50,000 available to you. You need to make sure, number one, that you have it available. And number two you have to know what the limits are. In some cases, I've seen client with $25,000 of medical payments coverage available to them, and the nice thing about this is you can get your health care providers paid quickly.

Some of the health care providers don't understand personal injury cases and they don't want to work on a lien, for example. They don't want to defer their payment or late on in the case, they want to get paid now. And, if you don't have health care insurance, it might be good to use your medical payments coverage. In some cases, it might be good to use your medical payments coverage. In some cases the medical payments coverage will only pay after you've exhausted your health care coverage. So, if you use your health care coverage first, and then you have some money left over that you have to get paid, some bills, you can use your medical payments coverage at that point.

The other thing is they may want you to exhaust your health insurance coverage first, your health care coverage options, or at least demonstrate that you don't have health care before the medical payments coverage kicks in. In many cases, and I would say in most cases, the insurance company has the right to reimburse them of their medical payments.

So, let's say that you recover money from the party at fault. You probably have to repay your insurance company for the medical company they advanced on your behalf. So, it's, not necessarily a freebie. So, let's say that the insurance companies pays $5,000 to the doctors on your behalf under your medical payments coverage. If you recover money from the other party – let’s say you recover $10,000 - you have to repay your insurance company for the medical payments coverage that they extended for you. Now, that is in most cases a contractual obligation that many clients aren't even aware of.

So, make sure you talk to your lawyer about your medical payments coverage, whether or not it's even going to be available for you, and also make sure you discuss the right of reimbursement that most insurance companies have when it comes to the medical payments coverage provision. If you don't have medical payments coverage, talk to your insurance professional and see if it would be appropriate for you. In most cases, it's not very expensive and it can be very helpful if you have a personal injury case. Thank you very much for watching this video, I hope you found it helpful.

Call (661) 414-7100 for help with your personal injury matter.

Many times, I ask my clients for copies of the medical bills they incurred after an accident. Immediately after a car accident, some people go to the doctor, hospital, etc and start incurring medical bills. These are some of the bills I need to help properly represent my clients. Some doctors will provide this information directly to me, especially if they've handled personal injury matters in the past.

The answer I almost always get is, "Oh, I got that from my health insurance company. They sent me the bills in the mail." Well, my clients are usually wrong about this. What they actually got is an "Explanation of Benefits" form (also known as an EOB Statement). This form is from their insurance company. It generally shows what they were billed, any discounts applied to the bill, what the health care insurance actually paid (if anything), and any amount the client is expected to pay. It looks like a bill of some sort, but it's not a bill.  It's an "explanation" of benefits.

You see, the EOB statement is NOT your bill. The actual bill is a recitation of all the services etc. you received from a particular health care provider and how much they charged you for the services. It's similar to shopping at the store - they give you a receipt that shows all the things you bought and how much you were charged. That's what I need. What you get from the health care insurance company is a document generated internally by the health insurance company - not the actual bill from the health care provider.

Your co-pay and EOB information is important but it's not the actual bill. How do you get the actual bills?  You call the health care provider and say, "Hey, send me my bills." They will either mail/fax them to you or you can pick them up. You are entitled to that information. Make sure to forward all bills to your attorney.  Realize that many health care providers do not do their own billing.  Their billing is often handled by a third party company, often off the premises, and sometimes not even in California.  Either way, you are entitled to your own bills.

I also like to get copies of my clients' EOB statements as well to show clearly what was billed and what was paid. That information is also important, but please don't confuse your EOB statements for your actual health care billing. They are not the same thing.  

If you don't have health insurance, check your car insurance policy for "Medical Payments Coverage" (MPC) which might pay for your medical bills after an auto accident.  If you don't have MPC, you should call your insurance company and ask about it.  It's very inexpensive and very good to have on your auto policy.  Even if you have health insurance, they may not pay for everything in which case MPC is a terrific bonus to have!  You can't always rely on the responsible party to pay your bills after an accident.  

However, keep in mind that if you recover any money from the responsible party's insurance carrier, you may have to reimburse your own insurance company for payments made pursuant to your Medical Payments Coverage.  They usually have a right to reimbursement.  While this may be the case, there are times when you can negotiate the amount owed, and in some cases, your insurer might agree to a total waiver. 

You can’t just settle your personal injury case without making sure all the doctors and other service providers have been paid. Any doctor or medical service provider is not usually providing their service out of the goodness of their heart. They expect to get paid. In some cases, the health care professional is working on a lien, expecting to get paid out of any settlement you might receive. In other cases, the health care professional may have been paid by your health insurance company but they have a balance that must be paid because they were not a “preferred” provider. This is known as “balance billing.” 

Other times, the doctor has already been paid by your health insurance, but what most folks don’t realize is their health insurance provider expects to be reimbursed from any settlement proceeds. They could technically come after you for reimbursement in many cases. That is an unpleasant surprise if you’ve already spent the proceeds or settled for less than you should have. Also, if your own insurance company paid any of your medical bills, they might also be expecting reimbursement. If you have Medi-Cal or MediCare, you can bet they want their money back from your settlement! You should always make sure all involved parties have been addressed. 

Many people are surprised to learn that the insurance company for the party at fault does not pay their medical bills as they become due. In other words, they won’t pay your medical bills until you are finished with your treatment in most cases. This can prove to be an unpleasant surprise for many people. Also, the treating doctors aren’t terribly happy about it because they want to get paid.

Keep in mind the insurance company for the party at fault doesn’t really have any obligation to you. First, they have to “investigate” and “determine” whether or not the accident was your fault or not. After that, don’t expect them to pay your medical bills whenever you present them.  First, they will have to “determine” whether or not your treatment was reasonable in THEIR opinion.  

In some cases, they use databases or other computer software to make that determination.  Then, they will look at every single charge you incurred to see whether or not they agree with the charge by the doctor. If they don’t agree, they will slash the doctor’s bills – in many cases dramatically, leaving you with a big hole to fill. So all the assurances of the world from the other party’s insurance company should mean nothing to you at the end of the day because there is no guarantee they’re going to pay your medical bills. In most cases, the adjuster alone determines your charges are unreasonable. Yes, this is the same adjuster without a medical degree.

Medical Liens After a California Personal Injury Accident: What You Need to Know

As a personal injury lawyer in the Santa Clarita, CA area, one of the things I have to pay close attention to in every injury case is whether there are medical liens or other reimbursement claims that need to be resolved before the case can be successfully concluded. When I prepare a settlement demand for an insurance company, I need to understand not only the client's injuries and damages, but also who may have a claim to some of the settlement proceeds. Ignoring those issues can create serious problems after a case settles.

A personal injury settlement is not necessarily as simple as receiving a check from the insurance company and putting the money in your pocket. Various entities may have paid for your accident-related medical treatment, and some may have contractual or legal rights to seek reimbursement from your recovery. Before accepting a settlement, it is important to identify those potential claims and determine how they will be handled.

Key Takeaways

• Medical liens and reimbursement claims should be identified before your personal injury case is settled.
• Your own auto insurance may have paid medical expenses through Medical Payments Coverage (MedPay). Depending on the policy and circumstances, your insurer may seek reimbursement.
• Doctors and other medical providers may have treated you on a lien basis, meaning they agreed to defer payment while your injury claim was pending.
• Your health insurance company may have a right to seek reimbursement for accident-related medical expenses it paid.
• Not every lien or reimbursement claim necessarily has to be paid in full. Depending on the circumstances, your attorney may be able to negotiate a reduction or otherwise resolve the claim.
• Your attorney should identify potential liens before settlement, rather than discovering them after the case has already been resolved.
• Failing to address a valid reimbursement claim can create an unpleasant financial surprise after settlement.
• The amount of money you actually receive from a settlement depends on more than the gross settlement amount. Attorney fees, case expenses, medical bills, liens, and other obligations may all affect your net recovery.

What Is a Medical Lien?

A medical lien is an arrangement under which a healthcare provider agrees to provide treatment while postponing collection of its bill, generally with the expectation that the provider will be paid from a future personal injury recovery. This can be particularly important for people who do not have health insurance or who otherwise cannot obtain necessary treatment immediately after an accident.

For example, suppose you are injured in a car accident and need several months of physical therapy. A medical provider may agree to treat you on a lien basis rather than requiring you to pay the entire cost of treatment as you go. If your personal injury claim eventually settles, the provider may expect its outstanding balance to be paid from the settlement proceeds.

The exact rights and obligations depend on the agreement that was signed. That is why your attorney should obtain and review any lien agreements rather than simply assuming that every medical bill will be handled in the same way.

Did My Own Auto Insurance Pay Any of My Medical Bills?

One of the first questions I ask when reviewing a personal injury case is whether the client's own automobile insurance company paid any medical expenses. Many California automobile insurance policies include Medical Payments Coverage, commonly referred to as MedPay.

If your MedPay coverage paid accident-related medical expenses, your own insurance company may have a right to seek reimbursement depending on the terms of the policy and the circumstances of the claim. That does not necessarily mean the insurer will receive every dollar it paid. In some circumstances, there may be an opportunity to negotiate the amount that must be reimbursed.

This is one reason I want to know about MedPay early in the case. It is much better to identify the issue before settlement than to discover after the settlement has been completed that another entity is asserting a claim against the recovery.

What If My Doctor Treated Me on a Lien?

If you received medical treatment on a lien basis, the medical provider generally expects to be paid when your personal injury claim resolves. The provider may have entered into a written agreement documenting the lien and the circumstances under which payment will be made.

Medical liens can become particularly important when treatment is extensive. A client may see a large settlement number and assume that the entire amount will be available to them, only to discover that substantial medical balances and other obligations must be paid from the recovery.

In appropriate cases, an attorney may be able to negotiate with medical providers to reduce outstanding balances. The possibility of obtaining a reduction depends on the circumstances, the provider, the agreement, the amount of the recovery, and other factors.

What If My Health Insurance Paid My Medical Bills?

Health insurance can also create reimbursement issues in a personal injury case. If your health insurer paid for medical treatment resulting from an accident, the insurer may have contractual or other rights to seek reimbursement from a recovery.

The details can vary considerably depending on the type of health plan involved. Some plans contain specific reimbursement or subrogation provisions, while certain government healthcare programs have their own rules concerning payments made for accident-related treatment.

This is why I ask my clients to provide information about all health insurance coverage they had at the time of the accident. It is important to determine who paid the medical bills and whether that party may have a claim against the eventual recovery.

Why Do Liens Need to Be Resolved Before Settlement?

Imagine that you settle your personal injury claim for $100,000 and receive the settlement proceeds without addressing a medical lien or reimbursement claim. Months later, the medical provider or insurance company contacts you and claims that it is entitled to reimbursement from the settlement.

That can create a very unpleasant situation. You may have already used or distributed the settlement money, but the underlying reimbursement obligation may still exist. The fact that you already received the settlement does not necessarily make the underlying claim disappear.

For that reason, I prefer to identify potential liens and reimbursement claims before the case is settled. That allows me to understand the client's actual net recovery and, when appropriate, negotiate with the lienholders before the settlement proceeds are distributed.

Can a Personal Injury Lawyer Reduce Medical Liens?

Sometimes. One of the services a personal injury attorney may provide at the conclusion of a case is negotiating with medical providers, insurers, or other entities seeking reimbursement.

For example, if a medical provider is claiming a substantial balance and the settlement is limited, there may be circumstances in which the provider is willing to accept less than the original balance. The same may be true of certain reimbursement claims, although the rules governing different types of liens and reimbursement rights can vary.

There is no guarantee that a particular lien will be reduced. However, identifying the issue early gives your attorney an opportunity to investigate the claim and determine whether negotiation is appropriate.

How Do Liens Affect My Net Settlement?

One of the biggest mistakes people make when evaluating a personal injury settlement is looking only at the gross settlement number. A $100,000 settlement does not necessarily mean that the client will receive $100,000.

Depending on the case, the settlement may need to be used to pay attorney fees, litigation expenses, medical bills, medical liens, reimbursement claims, or other obligations. The amount remaining after those deductions is the client's net recovery.

That is why I believe clients should understand their potential net recovery before agreeing to settle. A settlement that sounds impressive at first may look very different after all applicable deductions and obligations are taken into account.

What Happens Before I Make a Settlement Demand?

Before I make a significant settlement demand, I want to have a reasonably complete picture of the client's medical treatment and the financial obligations associated with that treatment. That includes determining whether the client's own auto insurance paid anything through MedPay, whether medical providers treated the client on a lien, and whether health insurance paid accident-related bills.

The objective is not necessarily to resolve every single bill before making the demand. Rather, I want to identify the potential claims against the recovery so that I understand the financial landscape of the case and can address those claims appropriately as the case progresses.

A personal injury case involves much more than determining what the other driver's insurance company might be willing to pay. The ultimate question is what the client will actually be able to keep after the case is resolved.

Don't Wait Until After Settlement to Ask About Liens

If you have been injured in a car accident, keep track of every medical provider who treats you and every insurance company that pays your medical bills. Save copies of your insurance cards, medical bills, statements, lien agreements, and correspondence concerning payment of your treatment.

If you hire a personal injury attorney, provide this information early in the representation. The sooner potential liens and reimbursement claims are identified, the easier it generally is to address them before the settlement proceeds are distributed.

A successful personal injury settlement should ideally be the end of the case—not the beginning of a new dispute over who is entitled to the settlement money. Properly identifying and resolving liens is an important part of making sure your case actually comes to a successful conclusion.

Frequently Asked Questions

1. What is a medical lien?

A medical lien is an arrangement under which a healthcare provider agrees to defer collection of its medical bill, generally with the expectation that the bill will be paid from a future personal injury recovery.

2. Can my own car insurance company claim part of my settlement?

Potentially. If your automobile insurance company paid accident-related medical expenses through Medical Payments Coverage, it may have reimbursement rights depending on the policy and circumstances. Your attorney should investigate the issue before settlement.

3. What happens if my doctor treated me on a lien?

The medical provider generally expects to be paid for the treatment provided. Depending on the circumstances, your attorney may be able to negotiate the outstanding balance with the provider when the case settles.

4. Can my health insurance company be reimbursed from my settlement?

Potentially, yes. A health insurer may have contractual or other reimbursement rights when it paid medical expenses resulting from an accident. The specific rules depend on the health plan and the circumstances.

5. Do medical liens have to be paid in full?

Not necessarily. Depending on the type of claim and the circumstances, an attorney may be able to negotiate a reduction. However, there is no guarantee that a lienholder will agree to reduce its claim.

6. Why should my lawyer know who paid my medical bills?

Knowing who paid your medical expenses helps your attorney identify potential liens or reimbursement claims before the case settles. This helps avoid unexpected claims against your settlement after the case is over.

7. Can I settle my personal injury case without resolving my medical liens?

A settlement can sometimes be reached while lien issues are still being finalized, but the liens and reimbursement claims should be properly addressed as part of the settlement process. Your attorney should understand the obligations attached to the recovery before distributing settlement proceeds.

8. How much of my settlement will I actually receive?

Your net recovery depends on the gross settlement amount and the deductions applicable to your case. These may include attorney fees, case expenses, medical bills, liens, reimbursement claims, and other obligations.

9. What if I don't tell my lawyer about a medical lien?

Tell your attorney about every medical provider and insurance company that paid for your accident-related treatment. Failing to disclose a potential lien can create problems when the case settles and may result in an unexpected payment obligation.

10. When should my attorney start looking for liens?

​Ideally, potential liens and reimbursement claims should be identified early in the case rather than waiting until the day the settlement check arrives. Early identification gives your attorney more time to investigate and, where appropriate, negotiate the claims.