When motor vehicle accidents cause serious personal injuries, it is not uncommon for PIP benefits to exhaust before all necessary medical care has been received. When health insurance carrying a large deductible is available, does the amount paid by PIP count against the deductible?
The likely answer is Yes. However, the final answer depends on language in the health insurance policy.
A health insurance policy is a contract. Unless contravened by public policy – statutes and case law – its terms control the duties and responsibilities of the parties to the contract. If the language of the contract is vague and confusing, or the contract is otherwise silent on the subject, the insured should win the issue.
We are not aware of any public policy pronouncements on the subject of this blog. Accordingly, the outcome depends on policy language.
Health insurance policies contain many different sections, although the sections where the language concerning this issue are most likely to be found are the patient responsibility section and the coordination of benefits section.
The insurance carrier may argue that because PIP payments do not equal payments from the insured, the deductible has not been satisfied. This argument is a red herring. It is not a matter of the insured being out-of-pocket, only that the billed amount (or “allowed amount” – see below) meets the deductible. Our position is that the deductible calculation should be the same whether the insured paid the bills, owes the money, or the bills were paid by PIP or some other source, perhaps another health insurance carrier.
Assuming that PIP payments do apply against the deductible, health insurance carriers will reduce each provider’s charge to an “allowed amount,” usually a fraction of the charge, thus reducing the amount offsetting the deductible. This is a legitimate practice. Many medical providers charge outrageous sums for their services that deserve to be reduced. The trick for the insured is to keep a careful eye on the carrier’s reductions to make sure they are not inflated as well.
Related to this argument is that some medical services will not be recognized by the carrier and therefore will not be counted against the deductible. “Experimental” medical services are a clear example of this.
When treatment is furnished by an in-network provider, the carrier has less room to challenge the provider’s charges.
The issue raised in this blog is an example of the myriad of legal issues that often arise in the context of insurance contracts, and demonstrates the importance of having an attorney to provide answers and solutions.
We invite you to contact us toll-free at 866-785-GALE or by email to obtain a free, confidential consultation to learn your legal rights.
Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.