May 7th, 2015 - Reviewed/Updated Jun 9th
Personal Injury is an complicated subject as it relates to medical services. This page contains helpful information as an additional resource to Find-A-Code's specialty-specific Reimbursement Guides.
Note: State laws regarding personal injury claims vary from state to state. Therefore it is crucial for healthcare providers to understand their own state requirements.
Sources of Medical Expense Recovery for Personal Injury Care
Here is a non-exhaustive list of commonly used sources for medical expense recovery. Each state has a specific standard, which may or may not use any of these described sources. You should consult with your state association for a list of applicable sources. If any of these or similar types of medical benefits coverages are not available, then you might consider reimbursement by cash or medical expense financing.
If Personal Injury benefits are exhausted or not available, this should be noted in the patient record along with supporting documentation. In this situation, if standard health insurance or another type of coverage is available, then the patient may elect to have reimbursement requests for continued care submitted to their health insurance carrier. DO NOT bill both the PI carrier and health insurance carrier simultaneously.
In the event of a personal injury accident, the personal injury insurance carrier will be responsible until the provider is notified otherwise. All verbal communication should be thoroughly documented. Due to limitations and rules of coverage with PI insurances, providers should make communication with the PI carrier a priority as the patient progresses through care.
- Liability. Liability insurance covers general damages caused by the negligence or fault of an insured. In many states, general damages include compensation for pain and suffering, subject to certain minimum monetary thresholds, before legal action is taken to recover those claims.
Liability coverage is not just limited to automobile policies. Homeowner’s policies and select business policies often carry liability coverage that can serve as a source of medical expense payment when accidents occur in these settings.
- Uninsured Motorist (UM) Coverage. UM coverage is a medical expense recovery option utilized when the uninsured (at-fault) driver has no insurance. UM coverage is virtually identical to liability insurance, the primary difference being that it only becomes available when there are no liability policies for the patient to pursue (e.g., the patient was injured by a hit-and-run driver or the at-fault vehicle was not insured).
- Underinsured Motorist (UIM) Coverage. UIM benefits were designed to help cover an insured driver or passenger who has been injured by an underinsured (at-fault) motorist whose medical benefits coverage is inadequate to compensate the insured’s losses. Generally speaking, this means that the injured party (driver or passenger) makes a medical benefits claim against the automobile insurance policy (UIM) of the driver in whose vehicle they occupied at the time of the accident (often their own insurance), if they obtain policy limits from the underinsured (at-fault) carrier and their loss exceeds those limits. In the case of an injured passenger, that passenger may also make a claim against their own PIP/MedPay and UIM policies. Because individual state laws may vary from this general statement, it is important to check your state laws regarding the application of liability claims benefits.
- Medical Benefits Payments (“MedPay”). In many states, MedPay is optional. Insurance companies can choose to offer it or not. MedPay is limited only to medical expenses. It is also limited to the amount of medical benefits purchased by the insured. In the case of automobile insurance, MedPay “follows” both the insured and the car, i.e., it covers the insured regardless of what vehicle the insured was occupying at the time of the accident. It also provides medical benefits coverage for all occupants in the insured vehicle at the time of the accident.
MedPay is not just limited to automobile policies. Homeowners and businesses may carry MedPay as well. Usually filing claims against MedPay coverage does not result in a rate increase to the insured.
- Personal Injury Protection (PIP). PIP is very similar to MedPay. One key difference between PIP and MedPay lies in the fact that PIP commonly covers lost wages and lost services in addition to medical expenses (the carrier’s total liability, however, will not exceed the set amount of benefits purchased by the insured). Another key difference lies in the fact that, whereas MedPay is usually optional, PIP may either be optional, required-unless-waived-in-writing, or mandated (such as in “no-fault” states), depending on state law. In cases where PIP is mandated, state law may designate it as primary (must be billed first) to any liability coverage that may be available.
- Motorcycles. Injuries from motorcycle accidents may not be covered in some states the same as motor vehicles. In many states, motorcycle medical benefits coverage is optional, a commonly overlooked exclusion.
- Pedestrian/Bicycle. Pedestrian vs. motor vehicle, or bicyclist vs. motor vehicle collision injuries are also seen in a chiropractic office. In some states, medical payments for injured pedestrians and cyclists are often covered under the motor vehicle MedPay or PIP automobile insurance benefits, regardless of who’s at fault. Sometimes injured cyclists are covered the same as pedestrians; in other states and municipalities they are considered as vehicles and subject to its motor vehicle laws, rules or regulations. It would be prudent to learn your state laws and the benefits or limitations on this subject.
- Plaintiff Attorneys. The function of plaintiff attorneys (representing the patient) in personal injury cases is to protect the rights of the injured and maximize a fair recovery for their injuries, such as current and future treatment expenses. This is accomplished in a variety of ways, including, but not limited to liability and UM/UIM coverage for any type of damages recognized by law, including losses such as pain and suffering. When the patient is represented by an attorney, doctors of chiropractic are commonly asked not to seek payment directly from the at-fault insurance coverage, or to send office notes, narrative reports, lists of charges, or other information which might potentially jeopardize the patient’s legal case. When the case is resolved, the task of the doctor of chiropractic is to obtain payment from the attorney out of any proceeds received by the attorney. Liens or Letters of Protection are legal tools to help in that recovery.
- Letter of Protection or Liens. Patients may enter into agreements with their doctors at the beginning of treatment in order to have their services paid at the conclusion of the case from the proceeds of a settlement or verdict. They may use several varieties of these methods, including “letters of protection (LOP)” or a “lien.” Some doctors prepare LOPs or liens themselves, while others request that the patient’s attorney prepare the LOPs or liens indicating that the plaintiff attorneys will protect them for outstanding medical bills. Use caution and logic. The plaintiff attorneys’ primary obligation is to represent and look out for the patient’s interest, not the doctor’s.
TIP: The Difference between Liens and Assignment
Assignment is transferring rights to a third party. Whereas a lien is a legal claim against funds for payment of a debt or an amount owed for services rendered. Some personal injury cases have been overturned when assignment was used. Because state requirements can vary, it would be wise to consult with a local health care attorney to determine which is most appropriate for your office.
See Resource 160 for a full-size version of this form.
A minority of states have enacted No-Fault automobile insurance laws within their jurisdictions. No-Fault laws usually entail the following requirements or principles:
- Mandatory PIP coverage.
- Primacy of PIP coverage to liability (i.e., liability becomes secondary to PIP).
- Monetary or verbal medical expense thresholds which must be met before the patient has a right to seek a legal solution against a liability carrier.
Coding and Billing
For Personal Injury, use the standard code sets for procedures (CPT) and diagnoses (ICD). It is also important to use the “E” codes in the Diagnoses section of this book to specify the external cause of the injury (e.g., auto accident codes V40-V49). Carriers usually accept claims submitted on a 1500 Claim Form. Verify specific coding and billing requirements with the personal injury insurance.
Attorneys have specific requirements for the type, timing and quality of reports which are required for administrating a successful claim for their clients. Reports are not patient clinical records. Check with the representative of record for their reporting requirements. Attorneys may request office notes and charges accompanied by a narrative report. Before preparing a long narrative, confirm that this is what is being requested. Often, attorneys will be satisfied with a brief summary describing the status of the patient at the conclusion of care. It is important to maintain HIPAA’s Privacy standards by obtaining the proper authorization from your patient prior to releasing records or reports.
NOTE: A HIPAA authorization for release of PHI is included with the Complete & Easy HIPAA Compliance publication available in the online store (Resource 116).
Claims adjusters enter the information from the claim form and the patient charts into their computers. Their software program (such as Colossus, Mitchell Medical, etc.) then evaluates your claim. A check is then authorized for their approved procedures. It is important to review their payment reports to identify any portion of your services that are denied or bundled. In some cases a corrected statement could resolve a problem. In other cases an appeal could be necessary to require them to follow accepted national guidelines (e.g. CPT, NCCI edits, etc.). Ultimately, when an account is not paid in full, the final resolution may require a legal solution against the insurance carrier.
Personal Liability Compensation
Financial liability for Personal Injury incidents goes beyond physician services which help restore patients to their pre-accident condition. When assessing liability, many factors related to the collision/accident need to be considered. This includes conditions such as abrasions, cuts, contusions, fractures, etc. as well as work time loss, pain and suffering. All these conditions, known as “value drivers,” are considered when the computer software determines a settlement offer. The dollar range for the “settlement offer” is then conveyed to the claims adjuster. Therefore, it is critically important that every aspect of these types of visible and non-visible injuries be documented in the initial physician’s report, even though another provider may be treating the other injuries. For example, common auto injuries, such as lacerations, may not be treated by a chiropractic physician, but they may delay treatment as the doctor waits for them to heal before being able to perform spinal manipulations in the affected areas.
Fee Schedules for Personal Injury
Each payer will have their own fee schedules; however, some state legislatures have mandated Personal Injury Protection or MedPay fee schedules. It is interesting and valuable to note that state laws can vary.
Key Legal Issues to Resolve
The fact that personal injury commonly involves several different sources of payment means that, in certain instances, chiropractic physicians have a greater chance of being paid in full. Nevertheless, several key legal issues need to be answered in each state before time and energy is invested in discovering, verifying, and billing the various sources of payment. These issues include:
- Can providers legally expect a right of direct payment from either the MedPay or PIP carrier? What must they do to protect that right?
- Can providers legally expect a right of direct payment from the liability or UM adjuster in cases where the patient is not represented by legal counsel? What must providers do to protect this right?
- Can providers legally expect a right of direct payment from the attorney upon receipt of funds relating to the patient’s accident? What must providers do to protect this right?
- Must providers file claims with the various payers in any particular sequential order, or can the provider file claims simultaneously? In cases where the provider can file simultaneously, what must the provider do when overpaid?
The answers to these questions depend largely on (1) which state law controls in any given personal injury case, and (2) how the controlling law addresses each issue. At a minimum, chiropractic physicians are encouraged to understand the relevant laws in their own states.
Discovery of Insurance Information
There are numerous ways of obtaining automobile insurance information in any given PIP case. The following represent some of the key ways:
- Completion of the Accident Information Form by the patient.
- Police Reports, Accident Exchange of Information Forms and/or “courtesy slips.”
- Copy of the patient’s registration, automobile insurance card, and/or copy of the insurance declaration page.
In the case of business insurance, chiropractic physicians should simply call the place of business and inquire as to who their insurance carrier is, and then call that insurance carrier to verify coverage.
Essential information needed before submitting claims to an adjuster usually includes the insured’s name, the policy number, the date of the accident/loss, the personal injury claim number assigned to the case, the name and address of the adjuster, and the preferred method of billing.
Generally, liability and UM adjusters request a list of charges upon “release from care.” PIP and MedPay carriers usually accept claims submitted either on a 1500 Claim Form, or on their forms.
Liens and Assignment
Letters of Protection (Resource 160), a.k.a. Personal Injury/Medical Liens, should be used by every chiropractic office that provides injury recovery care to car accident and other personal injury patients. These liens are a simple and effective way to help ensure that you get paid from the proceeds of the patient’s insurance settlement for injury recovery services that you provided to them. However, many providers don’t know how to draft or effectively use them. Depending on how you draft your assignment and lien and the protocols you follow, you can solve a host of payment problems in the area of health insurance and all forms of accident insurance. Knowledge can save tens of thousands of dollars in lost revenue, as well as stress, aggravation, and lost time.
When you have a patient sign a lien, it’s important to have that lien filed with the attorney on record. It’s equally important to document that the attorney has received your lien as well. Not all attorneys will sign a lien and send it back to you. If you do not confirm the receipt of your lien with your patient’s attorney, you can find yourself at the mercy of your patient, their client! Attorneys have their first responsibility to their clients. If the client chooses to instruct the attorney not to pay your bills, even if that attorney happens to be a close friend or family member to you, that attorney must follow the client’s instructions and not pay your bills!
If an attorney has accepted your lien, they have a legal obligation to pay your bills from the settlement proceeds, even if your patient instructs them otherwise! So get that lien signed by your patient and their attorney as soon as possible! There are many methods to prove receipt of lien by the attorney, but a returned signed copy is best. While liens appear to be a great legal instrument to force payment, they are not foolproof. Most liability insurance company's do not recognize the legal obligation of a Chiropractors patient lien. In many states when patients file for bankruptcy, they will subject your lien to steep discounting or even dissolution, with only a hospital and attorney lien being able to survive the bankruptcy. Do what you can to get Chiropractors included in that same hospital lien survivability category.
It is important to be aware of individual state laws regarding the assignment of benefit provisions. For example, in the state of Virginia, the law requires the provider to bill the health insurance first if they are an in-network provider.
CLICK HERE for more information on liens and a sample lien agreement.
- Refusing to send your clinic a Letter of Protection (LOP).
- Sending you a “weak,” limited, or conditional Letter of Protection (e.g. “I will protect your bills up to $1,000”).
- Declining to sign your assignment/lien.
- Stalling when it comes to paying you.
- Declining to forward the proceeds to you.
- Failing to respond to your calls or letters when checking on the status of the case.
- Repeatedly asking you for large reductions.
- Refusing to tell you any of the details of the settlement saying, “that’s confidential, I can’t tell you.”
- Simply sending partial payment and not even asking if you will take a reduction.
- Failing to tell you that they were fired or that they dropped the case.
- Settling cases, but not communicating this to you in a timely manner.
- Simply not wanting to retain an attorney.
- Firing their attorneys, or attorneys “dropping” patients/clients.
- Switching attorneys, and you’re unable to find out who the new attorney is.
- Refusing to pay you directly when you are “out-of-network.”
- Telling you that they will pay you directly, or put your name on the check, and failing to do so.
- For liability or uninsured motorist payers ignoring your assignment, saying that they’re third party and don’t have to honor your assignment.
- Telling you that the PIP (Personal Injury Protection) or Medpay (Medical Payments Benefits) benefits are “exhausted”, and you’ve had no way of verifying this.
PIP or Medpay Payers
- Refusing to pay you promptly, or paying the patient instead (or the patient’s attorney).
- They keep “losing your paperwork,” or saying, “we never got your paperwork.”
Attorneys Have Obligations
There is a body of law that is triggered when you have a well-drafted assignment and lien in hand and follow a few simple protocols.
In the late 80’s, the American Bar Association (ABA) adopted a model rule of professional conduct for the legal profession, entitled “Safekeeping Property Merits Special Attention.” According to Rule 1.15(b), when an attorney receives funds in which a client or “third-person” (e.g., a health care provider) has an “interest,” three duties are triggered: 1) the attorney has a responsibility to promptly notify you of the receipts of the funds, 2) the attorney has a responsibility to promptly pay you based on your interest, 3) the attorney has a responsibility to provide you with a “full accounting” upon request. Knowledge of this rule has been helpful when it comes to collecting outstanding balances in any type of accident case. Whether and how this rule applies in each state can vary based upon the laws of the state.
The ABA Rule 1.15(b) represents just one body of law that supports a well-drafted assignment and lien. Those who spend just a little bit of time for the assurance of a well-drafted assignment and lien, and then follow-up with simple protocols discover how easy it can be to solve many types of payment issues.
Key Elements in Your Lien and Assignment
Many providers don’t know that there are different types of assignments and liens, and that assignments are different from liens. Additionally, each type serves a different purpose. A federal bankruptcy court once explained that the basic difference between an assignment and a lien is that an assignment transfers ownership over the proceeds, while a lien does not. The meaning of the court’s statement was that an assignment of the proceeds will have a better chance of surviving a bankruptcy proceeding, whereas a lien has less of a chance.
Avoid assignment and lien documents which are very limited, because they could fail to include all types of payers and/or all types of proceeds. Don’t restrict your document. Include at least two provisions in your assignment and lien document: 1) a direction to all payers to pay you promptly, directly, and exclusively in your name, 2) include some key definitions of words like “payers,” “proceeds” and “charges.”
Uniform Commercial Code Lien
All states have some form of a health care lien; however, an increasing number of providers have become aware of a universal type lien known as the “Uniform Commercial Code” or “UCC” lien. The lien is available in virtually all states. It’s easy to file and costs as little as $5.00 in some instances. In various jurisdictions, filers are able to submit the lien form electronically. Furthermore, the UCC lien doesn’t have the limitations which many other health care provider liens seem to entail (for example, the Virginia “medical lien” law is limited to $500 for chiropractors). Does the UCC lien law really protect health care providers? Here is an excerpt from the Texas UCC law, it is nearly identical in most states:
“The following security interests are perfected when they attach: ...5) a security interest created by the assignment of a health-care-insurance receivable to the provider of the health care goods or services.” -Texas Business and Commerce Code, Section 9.309
When you accept a PI patient, you are accepting a responsibility to be a healthcare provider for the acute traumatic care injury services that your patient may need for an optimal recovery. Because PI claims are handled differently than regular medical claims and PI laws vary from state to state, it is essential to understand these differences.
Close communication with patients, auto carriers and attorneys (as may be necessary under certain circumstances) is essential. This ensures that necessary claim information is collected and also helps avoid misunderstanding or oversights regarding claims submission and payment.
Monitoring Personal Injury claims on a frequent and regular basis with auto carriers and/or attorneys (where applicable) is a measure of efficiency and protection for both the patient and the provider. Also, collecting the proper letter of protection or lien is a protective measure which can help the practice avoid potential reimbursement complications. Documenting your practice’s personal injury claims procedure in your Policies and Procedures manual helps to ensure a smooth and seamless process.