Maximizing Your Compensation: How to Utilize Available Coverages

Written by Bob Katz Law reviewed by Timothy J. Capurso

Personal Injury

When facing a personal injury case, you might wonder, “Why should I use my own health insurance or auto insurance to cover medical expenses resulting from someone else’s fault?” The answer depends on the specific circumstances of your accident. Let’s break it down:

Maryland Cases

In Maryland, health insurance carriers usually have subrogation rights. This means that if your health insurance pays for your accident-related treatment, they can place a lien on your third-party settlement. You might ask, “Why use health insurance if I’ll have to repay it from my settlement anyway?” Well, here’s why:

Treatment Authorization: If you have an authorization and assignment agreement with your doctor, your medical bill is typically held until your case concludes.
Recommendation for Certain Bills: For emergency room and surgery bills, it’s advisable to use your health insurance. This has two primary advantages:
- Avoiding Collections: Health insurance payments reduce the likelihood of your bill going to collections.
- Contract Benefits: Health insurance often has contracts with hospitals, resulting in lower bills due to adjustments. If your health insurance asserts a lien, you only need to repay what they actually paid, not the full amount. This applies to clients with Medicare, Medicaid, or private health insurance.

If you’re also using Personal Injury Protection (PIP) benefits, which we highly recommend, using health insurance for hospital bills frees up PIP benefits for chiropractic and physical therapy bills not covered by health insurance.

Virginia Cases

In Virginia, the rules differ. For Virginia residents involved in an accident within the state, it’s mandatory to use health insurance first. After health insurance pays and adjusts the bill based on their provider network, you can then submit any remaining balance to your Auto Insurance carrier under Medical Payments (Medpay) coverage, if available. However, this requirement applies only if your healthcare provider is part of the health insurance carrier’s in-network providers. If not, your provider must provide an Explanation of Benefits showing the health insurance carrier’s denial for Medpay to issue payment.

An essential distinction in Virginia cases is the absence of subrogation rights for health insurance carriers, except for Medicare, Medicaid, or specific ERISA policies. The potential benefits of using health insurance in Virginia are similar to those in Maryland, but you won’t need to repay the carrier via a lien.

Important Note

These scenarios do not apply if you lack health insurance coverage.

Understanding your options and requirements regarding health insurance coverage is crucial. It often leads to a better chance of having your medical bills paid before reaching a settlement, ultimately putting more money in your pocket. If you have any questions or need assistance navigating these complexities, don’t hesitate to reach out to our Personal Injury Group for guidance.

By Natalie Ulrich, November 6, 2023