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What is Medical Payments Coverage?

Posted in Blog on September 20, 2019

Medical Payments Coverage also is known as “medpay” is an insurance benefit offered in Colorado to help pay for medical treatment as a result of a motor vehicle collision.  This treatment might include, but is not limited to, ambulance, emergency room treatment, radiology, surgery, hospital stays, follow-up appointments, physical therapy, chiropractic treatment, and prescriptions.  

The History of Medical Payments Coverage in Colorado

In 2009, the Colorado MedPay statute went into effect, making it mandatory for all auto insurance policy carriers to offer medical payments coverage. A policy may be issued without medical payments coverage, but only if it is rejected in the same manner that you are signing for the policy. If your insurance company fails to maintain or provide proof that you rejected the medical payments coverage, then the policy is presumed to include such a benefit in the amount of five thousand dollars ($5,000.00).  It was later enumerated in case law that an insurance company is precluded from being reimbursed out of a final settlement for any medical payment benefits already provided and not considered a double recovery. 

What Are the Benefits of Having Medical Payments Coverage?

One of the important benefits is if your health insurance coverage does not cover all of your medical bills (for example, deductibles or copays), or the individual who caused your injuries does not have liability insurance, medical payments coverage may provide a means for paying part or all of your medical bills before a potential settlement is ever discussed. In addition, having medical payments coverage will typically result in a larger net settlement for an injured party because the insurer paying the medical payments benefits does not have the ability to be repaid out of the injured party’s settlement. 

How Does Medical Payments Coverage Work?

It acts as a supplemental benefit to your health insurance coverage that is tied to your automobile policy.  Many drivers aren’t even aware they have this type of coverage until their personal injury lawyer examines their auto policy with them after a collision.  The good news is that you can add medical payments coverage to your auto policy at any time before a collision.  If you have coverage at the time of the collision, benefits must first be paid to licensed ambulances or air ambulances that provided trauma care at the scene or immediately after the motor vehicle collision. Next, the payments are required to be paid to the trauma physicians and facility where the emergency care was provided. The remaining funds are required to be held for no longer than thirty days after the collision.  After the thirty-day period has expired, the remaining balance can be utilized for other treatment costs incurred as a result of the crash. Treatment can include co-pays and deductibles for subsequent incident related treatment, out-of-pocket expenses for pharmacy prescriptions, and treatment not covered by your health insurance. 

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