Many personal injury cases involve injuries sustained in an automobile accident. Victims of car accidents often find themselves with mounting medical care bills and wonder how to pay them while the case settles.
New Mexico is a "fault" or tort state for liability purposes in car accidents. This means that generally, the person at fault--and that person's insurance--is liable for the personal injury and property damage that results from the accident.
However, even if the other driver is at fault, their insurance company is under no legal duty to advance medical expenses to a third party. Moreover, it is not common for the insurance company of the opposing party to pay medical or any other expenses in advance of settlement. If and until settlement comes, the victim must figure out how to pay for his or her medical expenses.
A person injured in a car accident has several options when seeking payment for medical expenses before settlement. A victim may file with their own insurance if they have no-fault or MedPay coverage, obtain a letter of protection, or file with their own health insurance.
Many automobile insurance policies offer additional no-fault coverage. No-fault coverage, also called personal injury protection, pays the medical expenses of the driver and passengers of the car covered, regardless of fault. No fault insurance usually covers medical expenses and sometimes lost wages, but only up to the limits of each individual policy. Pain and suffering are not recoverable under no-fault insurance.
A popular form of no-fault coverage is Medical Payments Coverage (MedPay). A person with MedPay coverage will have access to payment advances medical treatment. Since MedPay is a type of no-fault coverage, fault does not have to be determined before using the coverage. MedPay covers medical expenses for the insured driver when driving the insured vehicle, when riding as a passenger in another vehicle, or if hit by a car as a pedestrian. It also covers all passengers riding in the insured vehicle, family members driving the insured vehicle, and a family member if struck by a car as a pedestrian. MedPay coverage is optional and can range from $1,000 to $100,000 per person per accident.
Another option is to obtain a treatment letter of protection. A letter of protection is more like a contract than a letter between the victim, his or her attorney, and the medical provider. The letter of protection will allow the victim to obtain the medical care needed in exchange for a promise from the victim and the victim's attorney to pay medical expenses out of the settlement funds. Nevertheless, not all doctors will accept letters of protection.
In many cases, victims have no other option than to use their own health insurance to pay their mounting medical bills. If a victim has no other funds available, it is advisable to use health insurance to avoid having late medical bills sent to collection for non-payment.
Once the case has settled, the insurance company will ask for reimbursement, also called subrogation, for the amount the insurance company actually paid the medical provider. Since most insurance companies get a discounted rate from medical providers, it is likely that the victim will end up with more of their settlement cash than if they had paid for the treatment out of pocket or failed to pay awaiting settlement.
These lien issues can be complicated. As such, if faced with this situation, it highly advisable to seek the guidance of an experienced personal injury attorney.