Avoiding Medical Debt After an Automobile Accident

by NPHM | June 13th, 2013

An automobile collision can happen at any time and without warning.  Even after the injuries heal, many accident victims still struggle to pay the onslaught of medical bills as they wait for the claims against the at-fault driver to settle.  If you have been the victim of an accident, you should never have your credit destroyed because of unpaid bills.  The purpose of this article is to explain how an attorney can help you manage the medical bills following an accident.

The threat of falling into medical debt after a car accident is a serious one.  According to a study conducted by Harvard researchers medical bills were the number one cause of personal bankruptcies in 2007.  In fact, 62% of all bankruptcies filed in 2007 were due to  overwhelming medical bills.(1)  Considering the increasing cost of health care, including emergency room billing, the number of bankruptcies caused by medical debt is expected to rise.

For an automobile accident victim, the accumulation of medical bills can sometimes be as frightening as the accident itself.  While the total cost of an emergency room visit depends on the patient’s individual medical problem, it is common for the bill to exceed $5000.00 for strain/sprain type injuries.  For fractures, brain injuries, or internal organ damage, the bills for emergency room and follow up care can easily exceed $100,000.00.  Most hospitals will not wait for the patient’s personal injury settlement to start collecting on outstanding medical bills.

There are four ways of paying medical bills so that your credit is not affected while you wait for your case to settle:

Submit the bills to a health insurance company
Submit the bills to your automobile insurer under a medical payments policy
Send a letter of protection to your treating doctors
Set up a periodic payment plan with the hospitals or doctors

USING YOUR HEALTH INSURANCE.  Submitting medical bills to your health insurance  company is the best option for avoiding medical debt.  Most health insurance companies have standing agreements with hospitals and doctors to pay the bill at a discounted rate.  You may be asked to pay a deductible or a copay as required by your plan, but they are more manageable than paying the entire bill.  To submit the bills to your health insurance company, simply present your insurance card to the hospital or doctor at the time of your treatment.  Keep in mind that any payments that your health insurance company makes toward your medical bills will have to be reimbursed out of your settlement proceeds.(2)

MEDICAL PAYMENTS COVERAGE.  If you do not have health insurance, the next best option is to submit the medical bills to your automobile insurer for payment under a medical payments provision of your policy.  Not all policies have medical payments coverage.  Check your policy’s declaration page to see if you have medical payments coverage.  Typically, a medical payment policy has a limit of $5000, but some have more and some have less.  If you choose to pay your medical bills with your medical payment coverage, the attorneys at Nurenberg Paris will communicate with your automobile insurance carrier to facilitate payment.  If your auto insurer pays your medical bills it will also be reimbursed from the amount of your settlement.

LETTERS OF PROTECTION.  If you do not have health or automobile insurance to pay your outstanding medical bills, you may ask your physicians to accept a letter of protection from your attorney.  A letter of protection is a written request to your doctor asking him or her to wait until your case settles before sending your unpaid bill to a collection company where it can harm your credit.  In exchange, you promise to pay the bill when you settle your case.  Please note that many doctors refuse to accept a letter of protection.  Your Nurenberg Paris attorney can advise you whether a letter of protection will help in your case.

PAYMENT PLANS.  If all else fails, you will have to call the hospital and/or your doctors to set up periodic payment plans that are manageable within your budget.  Keep track of every payment you make so that you will be reimbursed from the person who caused your injuries.

At Nurenberg Paris, one of our goals is to protect you from financial harm while we are preparing your case.  If you have been in an accident and have outstanding medical bills please call us to discuss your options.


(1) David U. Himmelstein, M.D., Deborah Thorne, PhD., Elizabeth Warren, JD., Steffie Woolhandler, MD, MPH.  “Medical Bankruptcy in the United States, 2007: Results of a National Study.”  American Journal of Medicine, 2009.

(2) Reimbursement to your health insurance company is called “subrogation.”  For more on how subrogation might affect your case please read my earlier article “Why Does My Insurance Company Get Paid Out of My Settlement? Understanding Subrogation.”