August 2012

Automobile Crashes: Paying for Healthcare

by Ed Vopal, President
Wisconsin Association for Justice

When you are in an automobile crash, access to health care is important.  In 2010, 562 people were killed and 40,889 people were injured in traffic accidents in Wisconsin.

As a result, millions of dollars are spent annually to provide health care for individuals, many of whom require immediate care and may face challenges in paying for it.
 
Our civil justice system intends that the person who causes the injuries be held responsible for the resulting damages and costs.  But negligent drivers - or their insurers - often do not pay for these expenses as they are incurred.

Many people pay their healthcare expenses from traffic collisions through their health insurance, including Medicaid.  The injured person's insurer initially covers the cost of healthcare and then seeks to recover bills as part of any recovery from the negligent drivers and their insurance companies.

A recent Wisconsin Supreme Court decision, Gister v. American Family Mutual Insurance Company, however, now may affect how people with Medicaid can pay medical bills from an automobile crash.

The Gister case was filed after a driver negligently ran a stop sign and injured four family members.  Several people were severely injured and their hospital bills collectively exceeded $500,000.  The family was on Medicaid, but the charitable hospital providing them treatment chose to file a hospital lien for over $182,000 of that amount naming the individuals rather than billing that family member's Medicaid.

Wisconsin law prohibits hospitals from directly billing people who receive Medicaid, instead allowing them to either bill Medicaid or join personal injury lawsuits when liability may be contested.  The law was not clear, however, about whether charitable hospitals could file and enforce a statutory hospital lien in lieu of billing Medicaid or joining a personal injury lawsuit.

The Supreme Court decided that charitable hospitals can file and enforce liens because liens are not a direct charge against the person, but rather are filed against a person's "property" - the negligent driver's insurance policy.  Ultimately, this case may mean that in automobile collision cases many charitable hospitals will simply file and enforce a lien instead of billing a low-income person's Medicaid.

This decision may be used to penalize low-income people who are injured in car accidents.  Under certain circumstances, Wisconsin law prohibits charitable hospitals from filing hospital liens against individuals with private-pay insurance, but Gister allows such liens to be filed against individuals on Medicaid.  The decision gives hospital lien holders priority on any liability insurance sums collected for a personal injury, and ignores the settlement or verdict process that may include an allocation of percentage of fault for the collision, other medical expenses, lost wages, and damages for pain and suffering.

The court has not yet decided whether hospital liens can be filed and enforced against Medicare patients.

In addition to private-pay insurance and public insurance such as Medicaid, automobile crash victims may also use other sources to immediately pay for health care expenses.

People with an automobile insurance policy can purchase Medical Payments Coverage (MPC), which applies to medical and funeral expenses stemming from automobile crashes.  This coverage does not depend on who caused the crash and covers persons injured driving, riding, or walking.  MPC is a relatively inexpensive way to pay for health care if you are injured in an automobile crash.

But, beware!  The minimum MPC amount now required in Wisconsin is only $1,000, which may not be enough to cover an ambulance ride to the hospital and the initial evaluation.
 
If you are working for your employer when involved in a collision with another person, Worker's Compensation Insurance may help pay for healthcare after the accident.  Very generally, Worker's Compensation pays for healthcare costs, a percentage of wage loss, certain types of temporary and permanent disability benefits, and other benefits.

Finally, if the negligent driver has no or minimal liability insurance, then your uninsured and underinsured motorist coverage can provide additional protection to help pay your healthcare expenses.  Similar to automobile insurers for negligent drivers, an uninsured or underinsured insurer is not required to pay healthcare expenses immediately after they are incurred.

In short, paying for healthcare expenses on time after a motor vehicle collision can be complicated.  In order to avoid unpaid expenses and the complications that follow, it is imperative that automobile crash victims consult an attorney with knowledge of these issues who can assist in navigating this potentially difficult area.

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For more information about the Wisconsin Association for Justice, see WAJ's website or call 608-257-5741.

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