Medpay Explained (Part 1)
Many of us who have treated patients that have been injured in a motor vehicular crash have liened the case and waited for the patient’s attorney for settlement to receive payment. Believe it or not, there are some who are unaware that there are other options to receive some form of payment for services rendered while waiting for the case to settle. One of these options is billing the health insurance and another is billing the Medpay or Medical Payment portion of the patient’s auto insurance policy.
Medpay is a contractual agreement between the Insurance carrier (insurer) and the policyholder (insured). This agreement is set to policy limits that may range from $1000 to as much as $100,000. This contractual agreement will pay for any and all reasonable and necessary medical expenses associated with any form of vehicular caused injuries, again, to the limits of the policy. This is similar to health insurance in that it covers medical bills. The difference from health insurance is that it will usually cover 100% of the reasonable charges, regardless of who is at fault.
Medpay will usually afford coverage for the insured, any passengers, and any member of the insured’s household who may be injured in any vehicle crash (own or someone else’s). This is provided that the household member has lived in the house for at least 6 months.
Substandard carriers also provide policyholders with the option of Medpay coverage. Unfortunately, most substandard policies also have a priority-of-coverage exemption that forces you to bill the health insurance, if any, first. Therefore, when a patient presents to your office with a substandard policy with Medpay coverage and also has health insurance, you must bill the health insurance first. Once billed and the office receives the EOB, then submit this EOB with the patient’s statement to the insured’s Medpay portion of the policy for payment. If you fail to do this (provided that there is health insurance) the substandard policy will not pay out. Let’s say that the patient has no health insurance then submit the patient’s statement for payment to the insured’s Medpay portion of the policy. The insurer will then send correspondence to the insured to confirm whether health insurance exists or not. Once completed and received by the insurer then will payment be processed.
Assignment of Benefits
To assure payment under the Medpay coverage, the DC must make sure that the patient signs an Assignment of Benefits form. This form will indicate that the patient assigns his or her right to be paid (or reimbursed) for the medical charges of the physician. Therefore, by signing, the patient gives the physician all rights that the patient may have under the policy.
This Assignment should also provide instructions in directing the patient’s attorney to cooperate, assist and not interfere with you, the medical provider, in recovering any MedPay benefits that the patient may be entitled to. This statement is to provide instruction to the insurer that if a lien is received from the patient’s attorney, to note on the Assignment of Benefits form that the insured has requested that his/her attorney not interfere with your billing of MedPay. This statement should be placed in a separate communiqué to the insurer in requesting for payment. This will then permit your office to receive payment directly as per the policyholder’s directives.
Be sure to have your patient sign this Assignment form before treatment has commenced and should state that it is irrevocable. This allows you to recover sums due to you, even if the patient later changes his or her mind about submitting the bills to the MedPay carrier.
The Assignment should also contain an authorization allowing you to endorse the patient’s name on any payment check. This signature will provide your office with a Power of Attorney for endorsement. Therefore, in the event that the office received payment under Medpay with the patient’s name on it, and the office is unable to locate the patient for their signature — the DC may now endorse the check as a result of this authorization/Power of Attorney.
The bills and Assignment of Benefits should be sent directly to the insurance carrier as soon as possible. The first medical provider to get the Assignment of Benefits to the insurance carrier may be entitled to all the applicable coverage.
Many physicians believe that submitting a lien for Medpay helps, but this is not entirely true. A lien is not an Assignment of Benefits and technically is improper when billing MedPay. However, insurance carriers often will incorrectly honor or request a lien when billing MedPay. Therefore, you may want to include a lien as well. Remember, the keyword here is “may.”
Lastly, some attorneys utilize the Medpay as part of the patient’s settlement. This is due to the insurer not receiving the insured’s irrevocable Assignment of Benefit. Therefore, upon receipt of the Medpay check, the attorney will obtain a portion of the Medpay, the patient a portion and finally the provider a portion. It is not intended for any legal payments or even patient payments. That is why it is called MEDPAY.
Dr. Boileve and the Illinois Chiropractic Society do not render legal opinions. The following article is presented for educational purposes only. Doctors are urged to confer with their personal legal counsel for specific personal injury matters that pertain to their patients.