An auto crash may do more than just wreck your vehicle. It may cause long-term damage to your credit reports and scores as well. We’ve heard from many accident victims over the years who wound up with medical bills in collections while they waited for insurance companies to sort out who would pay what. One of our readers, whom I’ll call “Jennifer,” recently wrote:
I was hit by an uninsured DUI (driver). One of my medical treatments involved an ambulatory surgery center, to whom I provided my health insurance and auto insurance information. Recently I received a letter indicating they would turn my account over to collections because it was not paid by the auto insurance.
Jennifer went on to explain that she has health insurance, and provided that information to the surgery center, but because they failed to bill the health insurance company in a timely manner, the claim has been rejected. Now she feels stuck.
“Coordination of benefits” is often the culprit here. “When a person has more than one insurance policy, coordination of benefits is the process of determining which policy has the primary responsibility of processing and paying a claim and to what extent the other policies will contribute to that claim,” explains Katie Vahle, co-founder of Copatient.com. The goal is to “prevent double dipping by both consumers and providers (i.e. send the same claim to multiple policies to receive additional payment).”
That process can be confusing for providers and patients.
Various types of insurance coverage may come into play in the case of an auto accident, including Personal Injury Protection, which is mandatory coverage on auto insurance in some states and optional in others; Medical Payments coverage, which may be optional on auto insurance policies; private health insurance; supplemental accident coverage; or Medicare. But it’s not always clear who has primary responsibility to pay in the case of an accident, though some states have no-fault laws that “circumvent the often lengthy process of determining liability,” says Vahle.
Even when it is clear who should pay, there can be problems. Insurance companies may deny claims or drag out payment, or bills may be incorrectly coded or sent to the wrong insurer. Any of those scenarios can create further complications that could leave you on the hook for part or all of the bill.
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Ultimately, you are responsible to your medical providers for the medical bills you incur so your goal throughout this process is to minimize your expenses by getting insurance companies to pay covered claims. But secondarily, your goal should be to keep your medical bills out of collections. Once they get to that point, it may be too late to protect your credit from damage. The collection agency will likely report the item as a collection account on your credit reports and your credit scores can drop dramatically as a result.
Here are some steps you can take to help protect yourself, and minimize the chance that your credit will take a hit.
Provide complete insurance information to all your providers. Don’t assume one insurance company will or won’t pay. If you have auto and health insurance, for example, provide complete information about both policies to all the providers involved. “When you are in an auto accident, it’s critical to immediately report it to your insurance company and get a claim number and make sure that you give the auto insurance claim number and your health insurance information to all of the medical providers that treat you,” recommends attorney Bill Robertson with the law firm Kirk Pinkerton P.A. in Sarasota Florida.
Don’t wait. “It is important to report an accident to your insurance company promptly. An insurance company may try to use a delay by the accident victim in reporting the accident as grounds for denial of the claim,” warns Eric Deming, an attorney with the law firm Morgan & Morgan.
While most health care providers understand that processing auto accident insurance claims is complicated, don’t assume they are going to wait forever for payment. “Confirm that your provider is willing to do this coordination on your behalf!” says Vahle.
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Read — and save — your mail. It’s not a bad idea to start a folder where you can save all the correspondence and bills you receive about the accident. You can also use it to store handwritten notes you take if you talk with anyone over the phone about the accident.
When you receive a bill, don’t just assume that the insurance company will take care of it. “That’s where people get in trouble,” warns Robertson. “They let it go because they think insurance is going to take care of it and next thing they know, it is in collections.”
Contact the medical provider if you aren’t sure it has all your up-to-date insurance information. ”Double check all the information they have on file is correct. The most common denial that providers’ see is for member ID mismatches,” Vahle says.
Also read the Explanations of Benefits statements (EOBs) that you receive from insurance companies. If an EOB lists a balance as “patient responsibility,” contact the medical provider to find out whether other insurance will be billed for that amount, or if you need to pay it yourself.
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Beware balance billing. If your health care provider is in-network, then there’s a good chance that it is required to follow certain billing procedures. If the provider fails to bill in a timely manner, for example, it may not be allowed to bill the patient for that claim. “Or it may not be allowed to try to collect the difference between the billed amount and the amount the insurance company agrees to pay,” explains Vahle. Talk with your insurance company it you think a provider is trying to balance bill you.
Ask your insurance agent for help, suggests Greg Isaacs, President of CoverHound Insurance Solutions an online insurance comparison website. Even if the insurer you’re having trouble with is not your own, your independent agent may have relationships with other insurance companies that can help. “Plus (your agent) speaks the language,” he adds.
Be a squeaky wheel. Isaacs warns that most claims adjusters are overworked, and sometimes it’s the customer who is persistent whose claim gets processed first. While you want to remain polite and calm, letting them know you are staying on top of your claim can help. If an insurance company is taking forever to process a claim, then “don’t be afraid to escalate things,” says Isaacs. “In most states, you can file a complaint with the state regulator about how a claim has been handled,” he notes. “They have to respond to those claims.”
Hire a personal injury attorney. “That’s one of the key jobs an attorney has is to try to help keep the bills out of collections,” says Robertson. ”That’s what we do every day.” Your attorney should be familiar with most medical billing procedures in the case of accidents, and may be able to ask a provider to hold off on collection until a settlement is reached. It’s best to talk with an attorney as soon as possible after the accident so you can avoid problems that may develop. But it you haven’t, you can consult one later in the process as well. Most personal injury attorneys offer a free consultation and work on a contingent-fee basis, which means there is no payment unless there is a recovery.
Challenge a denial. Don’t assume that a denial by an insurance company is the final word. “If insurance coverage has been denied or the decision by an insurance company has been delayed, an attorney may be able to help,” says Deming. “In fact, I am currently preparing for trial for a medical bill which was denied under personal injury protection coverage.”
Negotiate. If it turns out you are responsible for some of the medical bills that result from an accident, you may be able to negotiate a reduction in the amount you owe. If you are working with an attorney, “the attorney may be able to negotiate that with the medical provider” on your behalf, says Eric Deming, an attorney with the law firm Morgan & Morgan.
If you are not working with an attorney, and you are overwhelmed with the process of understanding or challenging your medical bills, you may want to turn to a patient advocate; an expert who helps patients analyze, dispute and even negotiate medical bills. Copatient.com is one such firm. They offer a free review of medical bills with additional services billed as a percentage of the money saved by the client. Alternatively, current or retired labor union members may be able to tap into a free medical bill negotiation service.
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Image: sylvar, via Flickr