New Virginia Law Codifies Assignment of Benefits in Virginia; How Will Chiropractors, Medpay Carriers & Injured Parties Be Effected?

NOTE: The following is not legal advice.

Effective July 1, 2013, a new law in Virginia took effect, which codifies Assignment of Benefits laws and directs how the law is to be applied by both healthcare providers and medpay carriers.

The bill modifies VA code section 38.2-22, which indicates that any attempt to assign medical expense benefits is subject to the law. Further Assignments are only valid if conditions under the law are met. It should be noted at the outset that this new law does not affect liability coverages.

It only applies to patients/claimants who have med-pay and health insurance, and it deals with how health providers should bill these patients and under what circumstances the med-pay or auto insurance carrier must honor an Assignment of Benefits (AOB) in Virginia.

Honoring of the AOB will be mandatory when these rules are followed:

• The Assignment of Benefits (AOB) must be in writing.
• The AOB must be signed and dated by the patient.
• AOB and notice forms should be sent to med-pay carriers, liability carriers, and attorneys by certified mail.
• If the patient does not have health insurance, the doctor, chiropractor, or healthcare provider can bill the medpay directly, and the carrier MUST (shall) honor the AOB.
• If the patient has health insurance and the healthcare provider is in network; as long as the patient provides this information to the healthcare provider, the healthcare provider can only bill the patient for co-payment, co-insurance, or deductibles, and the remainder can be billed to auto insurance benefits such as medpay.
• Essentially, where health insurance information is provided to the provider – it must be billed first if it is in the provider’s network, prior to the billing of medpay, by the provider.
• If the patient does not provide health insurance information or the provider is not in network, the provider may bill the full amount to the auto insurance.
• If the health insurance carrier denies a code (for example, denies chiropractic treatment as unnecessary) – the patient’s attorney may still be able to get the bill covered under med-pay. (This is the attorney’s usual job in this situation and is not really affected by this new law. Attorneys frequently must file PIP or Med-pay lawsuits to get auto insurance carriers to honor benefits contracts where medical treatment is unfairly deemed unnecessary, duplicative, or too expensive by the auto insurance carrier)
• If the injured person does not have insurance or is covered by a self-insured or self-funded employee welfare benefit plan, such as ERISA (which requires medical expense coverage to be primary), the motor vehicle insurer shall pay directly to the healthcare provider from any medical expense benefits available to such person under a motor vehicle policy.
• Notwithstanding the above, before signing an Assignment and Authorization Agreement or Assignment of Benefits, patients who are represented by attorneys for motor vehicle accidents should consult with their lawyer to determine the best course of action. Under some circumstances, it may make more sense to utilize health insurance as a primary coverage with Med-pay as secondary, for example. Alternatively, some patients may elect to not use health insurance at all.
• Like all new laws, there are bound to be some kinks as insurance carriers, providers, and attorneys sort out the ramifications of these new rules. Healthcare providers and insurance carriers will be instituting new policies to deal with these laws and/or may be altering their regular practices to cope with the new law. If you are an injured party or a healthcare provider and have questions about how this new Virginia law will affect you, you should consult an attorney, as your circumstances are likely unique.