How Do Medical Bills Get Paid After a Car Accident in Alabama?

If you have been injured in a car accident in Alabama, you are likely asking yourself: Who is going to pay all my medical bills?

In Alabama, all drivers on the roadway are required to carry automobile liability insurance. Because of that, most people assume that the at-fault driver’s liability insurance carrier will immediately step in after an accident and cover the injured party’s medical expenses.  Unfortunately, even if the at-fault driver clearly caused the accident, that is not how it works.  Instead, in many instances, the medical bills fall on the shoulders of the injured person first – even though the accident was not their fault.

The team of attorneys at Hollis, Wright & Clay, P.C. routinely represent individuals confronting this situation and must address how the medical bills will be paid after a car accident; what options our clients have; and how to protect our clients financially after a crash.

Alabama, like most other states, follows a fault-based system, which means that the at-fault driver who caused the accident is legally responsible for the damages an injured person sustains, including:

• Medical expenses
• Lost wages
• Pain and suffering
• Emotional distress and mental anguish
• Permanent impairment, disability & scarring

However, the at-fault driver’s insurance carrier typically pays at the end of a claim or a case – not as the bills come in. That creates a dilemma for those that are injured.  After an accident, medical providers don’t wait for automobile liability insurance companies to determine who was at fault. Instead:

• You receive medical treatment;
• The medical providers bill you (or your health insurance) directly;
• Then payment for the bills is expected regardless of whom the automobile insurance carrier deems at fault.

In Alabama, all drivers on the roadway are required to carry automobile liability insurance. Because of that, most people assume that the at-fault driver’s liability insurance carrier will immediately step in after an accident and cover the injured party’s medical expenses.  Unfortunately, even if the at-fault driver clearly caused the accident, that is not how it works.  Instead, in many instances, the medical bills fall on the shoulders of the injured person first – even though the accident was not their fault.

The team of attorneys at Hollis, Wright & Clay, P.C. routinely represent individuals confronting this situation and must address how the medical bills will be paid after a car accident; what options our clients have; and how to protect our clients financially after a crash.

Alabama, like most other states, follows a fault-based system, which means that the at-fault driver who caused the accident is legally responsible for the damages an injured person sustains, including:

• Medical expenses
• Lost wages
• Pain and suffering
• Emotional distress and mental anguish
• Permanent impairment, disability & scarring

However, the at-fault driver’s insurance carrier typically pays at the end of a claim or a case – not as the bills come in. That creates a dilemma for those that are injured.  After an accident, medical providers don’t wait for automobile liability insurance companies to determine who was at fault. Instead:

• You receive medical treatment;
• The medical providers bill you (or your health insurance) directly;
• Then payment for the bills is expected regardless of whom the automobile insurance carrier deems at fault.

Understandably, that leaves many people frustrated – they were not at fault for the accident, yet they’re medical bills keep piling up.  Luckily, medical bills can be handled through a combination of sources.  Here is how that combination typically unfolds:

If you have health insurance, it is often the first line of payment for your medical treatment.  Your medical provider will bill your health insurance for:

• Emergency room visits
• Hospital stays
• Surgery
• Follow-up care
• Physical therapy
• Diagnostic imaging

While you will still be responsible for any copays, deductibles, or out-of-pocket costs, your health insurance helps reduce the immediate financial burden. You can claim your deductibles and co-pays as damages against the at-fault driver and get compensated for those damages.

It is also important to keep in mind that, if you later recover money from the at-fault driver’s liability carrier through a settlement or judgment, your health insurer may have a right to be reimbursed for the benefits they provided. This is known as subrogation. Our attorneys heavily negotiated reductions to the subrogation amounts so that our clients maximize what they put in their pocket from a settlement with the automobile liability insurance company.

In Alabama, many drivers carry the optional, no-fault, add-on of Medical Payments coverage, commonly called MedPay coverage.  Since MedPay is “no-fault” MedPay can:

• Cover you and your passengers’ medical expenses regardless of who is at fault
• Typically pays quickly after an accident
• Can be used alongside your health insurance
• Helps with immediate expenses like ER visits and diagnostic imaging.

While the coverage limits for MedPay are typically low, MedPay can be extremely beneficial early on in covering a portion of your medical bills.

If you don’t have health insurance or med-pay—or your coverage is limited—you may have to:

• Pay medical bills out of pocket
• Set up payment plans with providers
• Negotiate reduced rates as a self-pay patient

This can be financially overwhelming, which is why understanding your legal options is critical.

In some cases, when an injured person seeks medical treatment after an car accident, the injured person does not have health insurance, or the medical provider does not accept that health insurance.  In those cases, sometimes, medical providers will agree to treat you under a medical lien or what is commonly known as a “letter of protection.” Which means:

• You receive the treatment you need now
• The provider agrees to accept payment later – at the time of settlement
• Bills are paid from your settlement

Even though drivers in Alabama are required to carry automobile liability insurance, unfortunately, it does not always happen.  In the event the at-fault driver doesn’t have any insurance, or does not have enough insurance, your UM/UIM coverage may apply.

Luckily, your UM/UIM coverage can help cover:

• Medical bills
• Lost wages
• Pain and suffering
• Emotional distress and mental anguish
• Permanent disabilities

While this coverage is not mandatory, every automobile insurer in the State of Alabama is required to offer this coverage. UM/UIM is one of the single most important protections you can have on your own automobile policy.

So, when does the at-fault driver actually pay for the medical bills that have been racking up? Almost always, the payment comes from the at-fault driver’s insurance carrier after your case or your claim is resolved either through a settlement or judgment.  Once the at-fault driver’s insurance carrier has paid through a settlement or judgment:

• Medical bills are paid or reimbursed
• Insurance companies are repaid (subrogation)
• Legal fees and costs are deducted
• You receive the remaining compensation

Yes, our attorneys work extremely hard to leverage a maximum settlement from the at-fault party’s automobile insurance company as well as through our client’s UN/UIM coverage while at the same time getting massive reductions and discounts for what has to be paid for medical bills or subrogation to health insurance companies. And remember, the client has exclusive authority to settle or not settle a claim. An attorney cannot force a client to accept a settlement. Thus, if the client does not believe the settlement is fair or in their best interest, they don’t have to settle the claim.

If you have been in an accident and are dealing with medical bills, avoid these common mistakes:

Waiting Too Long to Seek Treatment

Delaying care can harm both your health and your legal claim. Insurance companies may argue your injuries aren’t serious if you wait to get the treatment you need or they will argue that any gaps in treatment mean that the injuries were not caused by the underlying event.

Ignoring Medical Bills

Unpaid medical bills can go to collections and damage your credit – even if you expect a future settlement. An attorney can help you avoid this dilemma.

Talking to Insurance Adjusters Without an Attorney

Insurance companies are not your friend. Speaking with an insurance company adjuster after an accident without speaking with an attorney could potentially harm your case because insurance companies try to minimize your claim and shift blame, even when you have done nothing wrong.

Settling Too Early

Once you accept a settlement, you generally cannot go back and ask for more money, no matter how bad your injuries have gotten or how much your medical bills are.  It is always best to talk to an attorney prior to settling your claim. Our attorneys are available to help. The consultation is free and if you retain Hollis, Wright & Clay, P.C. to handle your car wreck claim, then the case will be handled on a contingency fee basis whereby we don’t get paid unless we recover money for you.

To summarize:

• The at-fault driver is ultimately responsible – but not right away
• Health insurance and MedPay are primary sources of payment
• The at-fault driver pays later through a settlement or verdict
• Reimbursement and liens are common

Understanding this process is critical to protecting both your health and your financial future.

Because an at-fault driver’s insurance carrier delays payment until the end of your claim or the end of your case, handling medical bills and navigating the claims process is rarely straightforward.  An experienced personal injury attorney, like the attorneys at Hollis Wright, can:

• Identify all available sources of payment
• Coordinate medical liens or deferred billing
• Negotiate reductions in medical bills
• Handle subrogation claims
• Maximize your overall recovery

Most importantly, we can help ensure that you are not facing this battle alone and that you are not left paying out of pocket for someone else’s misconduct.