The Supreme Judicial Court recently issued a ruling favorable to Massachusetts drivers on the subject of medical payments coverage in the standard Massachusetts automobile insurance policy.
Medical payment coverage, often called MedPay, is one of eight optional coverages which drivers can purchase on their auto insurance policy. All Massachusetts drivers are required to purchase compulsory coverage, which includes $8,000 in Personal Injury Protection (PIP) benefits. They can also purchase other optional coverage types, such as MedPay. This pays co-pays and deductibles not covered by PIP benefits and medical services not covered by your health insurance policy.
In Golchin vs. Liberty Mutual Insurance Company, SJC-11305, the plaintiff suffered serious personal injuries traveling as a passenger in her husband’s car. Her medical expenses exceeded $100,000.
The car was insured by Liberty Mutual and the policy had up to $25,000 in optional MedPay benefits. Golchin had a health insurance policy with Blue Cross Blue Shield, which paid her medical bills (expenses totaled $100,883, but Blue Cross actually paid $32,033). Blue Cross placed a lien in this amount on any award Golchin received from her car accident case.
Golchin submitted documentation of medical expenses to Liberty Mutual, seeking coverage under MedPay. The insurance company refused the payment, claiming it was not required since Blue Cross had already paid the bills. When she settled her personal injury case, Golchin had to pay Blue Cross $32,033 out of her award to satisfy the lien, even though she had MedPay coverage.
Golchin filed her lawsuit in Worcester Superior Court in September 2008, alleging a breach of contract, a breach of implied covenant of good faith and fair dealing, and a violation of G.L. c. 93A, § 2.
In its August 8, 2013 decision, the Supreme Judicial Court held that Liberty Mutual could not avoid the payment of the medical payments coverage, and that the standard Massachusetts auto insurance policy provided for payments to the insured even when the health insurance company had made the payment.
There was certainly no unjust enrichment of the plaintiff in this case; all she got is what she had already paid for, and the auto insurance payment will only replace some of what was paid to the health insurance company to satisfy its lien.
Did you know that health insurance companies can recover their payments from your bodily injury claim? Most clients are stunned when they realize that their health insurance company can demand repayment of the bills that they paid. So even if you have great health insurance, the company will claim a lien on any personal injury case you have, and has the right to get paid, even before you do, and even if the settlement amount is not enough to cover all of your damages. Some insurance companies will negotiate their liens; others are not so sympathetic. Medical payments coverage on an auto policy is a good way to insure against lien repayments, and the cost of the coverage is very low.