In a format addressed to medical providers, this article covers three main topics: Delaware Personal Injury Protection (PIP) insurance, Independent Medical Examinations (IME) and Letters of Protection (LOP). After reading this article, you will either know everything you need to know about getting reimbursed for treating auto accident victims, or you will know enough acronyms to sound impressive at cocktail parties.
Personal Injury Protection Insurance – what is it and how does it work?
Personal Injury Protection (PIP) is a type of automobile insurance that covers medical expenses and lost wages after an auto accident. PIP is also called “no fault” insurance. It pays for treatment and lost wages resulting from an accident regardless of who was at fault in causing the accident. The standard is whether the treatment is “reasonable and necessary” and whether the bills are “usual and customary”.
How much coverage is required?
Under current Delaware law (21 Del.C. § 2118), all motorists must maintain at least $15,000 in PIP coverage per person. Many Delaware motorists carry higher limits or additional PIP on their auto policies. I often find that my clients have $25,000, $50,000, $100,000 or even more PIP available on their policies.
How long does it last?
PIP lasts for two years following the automobile accident, or until the insurance company has paid out the policy limit — whichever comes first.
Whose insurance pays?
PIP is available for any “accident involving a motor vehicle”. The accident doesn’t even have to be a real car accident. I once got PIP coverage for a client who got out of her pickup truck and fell while walking around the truck to get a package out of the passenger’s side. That said, your typical accident case will be a traditional car accident, not a slip and fall. If the patient was riding in an automobile at the time of the accident, the insurance policy on that automobile will provide the primary PIP. If the patient was a pedestrian and was struck by an automobile, then the insurance on that automobile will provide the primary PIP insurance.
Where can I find the PIP fee schedule?
There is no Delaware PIP fee schedule. Your practice should have a written fee schedule. Bill services at 100% of your practice’s fee schedule and expect to be reimbursed in full.
If you are not paid in full, you may balance bill the patient. There is no prohibition on balance billing.
After the accident, the patient must notify the PIP insurance company that the accident occurred. The insurance company will issue a claim number to the patient and mail him or her a PIP application. In most cases, the patient must complete and return the PIP application to the insurance company before the insurance company will begin paying providers’ bills.
Should we complete it for the patient?
Some medical providers assist the patient to complete the PIP application, then fax it to the PIP adjuster to make sure it is done. If you assist a patient in completing a PIP application, make sure that you list all affected areas on the application, even if the pain in a particular body part has resided. Insurance companies often refuse to pay for treatment of injuries that are not listed in the initial PIP application.
Why won’t the PIP adjuster give me pre-approval?
There are no pre-approvals in PIP claims. That said, you, your patient or your patient’s attorney may contact the PIP adjuster and find out how much has been paid out on the PIP claim. By doing so, you may calculate how much insurance is remaining on the policy. This is often a wise thing to do before performing expensive services. If the PIP policy has a fifteen thousand dollar limit and fourteen and a half thousand dollars has been paid out, don’t take your patient to the OR for shoulder surgery and expect PIP to pay your bill in full.
Differences in documentation and billing
In a regular commercial claim, you can complete a HCFA 1500 form and as long as you coded your office visit or procedure correctly, you will likely be reimbursed. That is not enough in an auto accident claim. Because PIP carriers only pay for treatment that is related to the car accident, you must attach your chart note or operative report and submit the claim on paper. If you use an outsourced billing service, you will have to make sure they are doing the billing this way too.
The chart note or report that you attach to the bill should clearly indicate in the subjective or history section that the patient’s complaints resulted from a motor vehicle accident. The date of the accident in your note needs to match the date of the accident reported by the patient to the PIP carrier. In addition, your note should include a line, perhaps in the plan section, indicating that the services rendered and the services recommended are reasonable and necessary as a result of that auto accident.
Scripts for medication
PIP will reimburse the pharmacy for prescriptions that are necessitated by the automobile accident. If you are going to write a script for medication from the automobile accident, you should note on the prescription form that the medication is required due to the auto accident. Even if all you write is “2° to MVA”, you are documenting that the need for medication was related to the accident, and the PIP carrier will be required to pay for it.
No work slips
In automobile accident cases, your patient may need to be taken out of work due to his or her injuries. In that case, it is important to clearly indicate in your no work slip that the restriction is due to the automobile accident. By doing so, you enable your patient to claim his or her lost wages from the PIP insurance or from the at-fault driver’s insurance when a bodily injury claim is made or a lawsuit is filed.
Be conservative in your willingness to help a patient with a no work slip. Unless the nature of the work is going to aggravate the injury or prevent healing, physically and emotionally it is best for the patient to resume activities of daily living as soon as possible. One way to be conservative without feeling like a jerk is to request the patient obtain a written list of duties from the employer, then write modified duty restrictions that will permit the patient to return to work part-time or return to perform the duties that can be completed safely.
PIP carriers often reduce providers’ bills. Most often when you see a reduction, the carrier claims the fees exceed the amount generally charged in this geographical region. That implies that the insurance company is keeping track of what other similar providers are charging and you’re on the high side. The Don Quixote in me would like to battle each of my clients’ reductions all the way to the Supreme Court. Unfortunately, usually when the PIP carrier takes a reduction, it’s not a large enough discount to fight over.
On-the-Job car accidents
What if the patient was on-the-job at the time of the car accident? Should you be billing PIP or work comp? If the patient was on-the-job at the time of the accident, you should normally bill PIP. PIP is primary in Delaware. Once the PIP runs out, you will bill workers’ comp.
That said, in serious injury cases, the patient’s attorney may ask you to bill work comp even though PIP is primary. It is fine to do so. Work comp cannot deny payment of a bill on the basis that PIP is available. Patients’ attorneys sometimes request you bill work comp when there is PIP available because they reserve PIP for lost wages. PIP pays lost wages at 80% and work comp only pays 2/3 the average weekly wage.
More on Reserving PIP for Lost Wages
The patient or his attorney can notify the PIP adjuster that they will reserve PIP coverage for lost wages. In that case, the PIP insurance company will deny any medical bills you present. Currently, this practice is legal in Delaware and in some cases attorneys may have a duty to their clients to reserve PIP for lost wages. If this happens, you will need to decide if you will continue to provide care under a letter of protection, bill health insurance, or discharge the patient. I discuss holding bills under LOPs and billing health later. But what about discharging the patient?
Sometimes the patient can’t work due to serious injuries, has no savings, is already behind in their rent or mortgage payments, and is going to be homeless unless the PIP is reserved for lost wages. That is a good reason to reserve lost wages. But sometimes, the patient’s attorney reserves PIP for lost wages without such a good reason.
If it imperils your ability to be reimbursed for the services you are rendering, then you are right to question whether you want to continue to render care. Recall the American Medical Association’s Principles of Medical Ethics, Principle VI: “A physician shall, in the provision of appropriate patient care, except in emergencies, be free to choose whom to serve, with whom to associate, and the environment in which to provide medical services.”
When you learn that PIP has been reserved for lost wages, that is a good time to contact the patient’s attorney by phone and find out the particulars of the case so that you can make a reasoned decision whether you will continue to treat this patient, and if so, how you will be reimbursed (see the discussion on that topic under the Letters of Protection section below).
Independent Medical Examinations
What is an IME?
PIP Insurance Companies just love to send their insureds, your patients, to Independent Medical Examinations (IME’s). These IME’s are generally with some out-of-state physician, who has no real connection to Delaware, who is doing a volume of IME’s for insurance companies for a significant fee, and who thus has no reason to say anyone’s treatment is reasonable and necessary. With an IME report stating no further treatment is necessary, the PIP insurer can legally terminate benefits.
Weak laws encourage the practice
The laws in Delaware do not provide any real help to us attorneys who want to hold the carriers responsible. The law permits us to file suit against the insurance company and collect the unpaid medical bills. The law effectively prevents us from collecting an award of attorney’s fees or any punitive damages for bad faith. Without any real “teeth”, the law actually encourages PIP carriers to send people to IME’s and put off paying for treatment, if at all, until after a breach of contract lawsuit goes through.
A typical case
Here’s an example of how it works: the patient complains of neck pain and right arm numbness after her auto accident, and starts a claim for PIP benefits. The patient completes a basic course of conservative treatment – a handful of office visits with her PCP and six weeks of physical therapy. X-Rays are clean. The patient continues to complain of pain and radicular symptoms into the right arm. The primary care doctor refers the patient for an EMG of the right upper extremity, and indicates in the chart note that if it comes back positive, an MRI will be taken. Now things are starting to look expensive to the insurance company. If the patient needs surgery to decompress the nerves, the PIP carrier is going to be on the hook for tens of thousands of dollars. Rather than just pay for the treatment in good faith, the PIP carrier sends the patient to an Independent Medical Examination. Surprise, surprise: the out-of-state IME doctor reports that the patient only sustained soft tissue injuries that should have healed already, and no further medical treatment is necessary. On the basis of that report, the PIP carrier denies any further claim for medical reimbursements.
Your response matters
This happens quite frequently in auto accident cases. Your response and the patient’s attorney’s response to this type of illegal behavior determines whether it will happen only occasionally to you and your patients, or whether it will become a regular thing that disrupts your relationship with your patients and affects the quality of care you deliver. Let’s continue with our example:
After getting the PIP denial letter from the insurance company, the patient’s attorney sends the IME report to the treating physician to request a rebuttal report. The physician’s office sends a prepayment notice requesting $500 before the physician will write a report. The attorney thinks to himself, why would I pay this doctor $500 for a report when all I’m trying to do is force this insurance company to pay his bill? The attorney cancels the request for the report and that’s the end of it. The PIP carrier has gotten away with murder. The physician has missed the opportunity to get 100% reimbursement, and now will have to take the measly reimbursement that Unison dishes out, or maybe the patient just won’t receive the care she needs because there’s no insurance to cover it. Rest assured, the next time the insurance company has a case with this physician, they know that they can pull the same trick with impunity again and save a lot of money.
Don’t play the part of the insurance company’s patsy
The solution is that you need to make sure that your patient’s attorney is one who pursues PIP breach of contract claims either through the arbitration process available through the Insurance Commissioner’s office or through a civil lawsuit in the courts. Reach out to that attorney, make sure he knows he has your support, and make sure he knows that if he files a lawsuit against the PIP carrier for your bill, you will provide a report or testimony to support the claim.
Letters of Protection
What is a Letter of Protection?
A letter of protection or LOP is a contract between the patient, his attorney and you. It is a promise that if you treat the patient now, you will be paid from the settlement of the patient’s personal injury case. It’s such a simple concept, but in practice sometimes it’s anything but simple.
When should you hold bills under a LOP?
If PIP is available, you want to submit your bills to PIP for reimbursement. If PIP is exhausted or cut off after an IME, or if it has been reserved for lost wages, then you need to evaluate whether you want to bill the patient’s health insurance or hold your bills under a LOP. If you bill health insurance, you will get paid faster. However, you will have to accept the reduction imposed by the health insurer. If you hold your bill under a LOP, then you will have to wait until the patient’s personal injury case settles, but you may collect a higher reimbursement than you would have received from the health insurer.
Always requiring an LOP — not necessarily a good practice
Some medical practices refuse to bill health insurance for treatment relating to automobile accidents. Once PIP exhausts, they will always require a LOP and refuse to bill health insurance. This disregards the fundamental truth about auto accident claims, which is that no two cases are alike. There are many variables that determine whether the underlying personal injury case will result in a settlement large enough to pay your bill. Is the patient likeable? Does he have a criminal record? Does he have a prior history of injury claims? Is the case one involving clear liability? Was your patient rear-ended at a red light, or did he get a ticket for causing the accident? Is your treatment clearly caused by the accident (a fractured humerus) or can the defense lawyer argue that the treatment was not related to the accident (spinal injection therapy for facet mediated pain in a fifty year old with preexisting degenerative changes in the spine). Is your bill the only one that will have to be paid out of settlement, or are there other LOP’s pending with other providers? Does your patient owe the Division of Child Support Enforcement thousands of dollars in unpaid child support for which they will have a lien against his settlement?
Always refusing to take an LOP is just as bad
On the other hand, some providers refuse to accept letters of protection and will instead only seek reimbursement from the health insurance or patient directly if there is none. Having a policy of never accepting a LOP disregards the possibility of getting reimbursed in cases where the PIP is exhausted and the patient has no health insurance.
Here’s what really happens behind the scenes
The PIP exhausts. The patient has no health insurance. We ask the practice to accept a letter of protection. The response is, “we don’t accept letters of protection in personal injury cases”. We then tell the patient to set up payment arrangements so their account doesn’t go into collections. More often than not, the patient can only afford small payments. So the patient sets up a $25 a month payment plan. Often in serious injury cases, the patient is struggling, out of work because of their injuries, cannot put food on the table and can’t pay the rent. But they make that $25 a month payment because they don’t want the accident to ruin their credit and because they need medical treatment. Then we settle the case. We ask the client if they want us to pay the providers’ remaining bill out of settlement. The conversation usually goes like this:
Attorney: “Ma’am, I see you still owe the doctor $5,900 for your surgery. We should pay that with your settlement funds.”
Patient: “Are you out of your mind? I’m not paying them in full now – they can keep getting their $25 a month till hell freezes over.”
Attorney: “Well yes, Ma’am, but if we pay it now, the case will be done and you will be free and clear of all debts, and you can put this bad experience behind you.”
Patient: “Whose side are you on? I thought you were my lawyer. We offered a letter of protection to them, and they couldn’t be bothered to take it. They threatened collections on me and could have ruined my credit. They made me pay when I was injured, when I couldn’t work, when I had mouths to feed at home. They can get their $25 a month until hell freezes over for all I care.”
Another variable in determining whether to accept a Letter of Protection is the quality of the lawyer your patient has selected. Is it a Philadelphia lawyer that advertises on daytime TV during Judge Judy? If you accept a letter of protection from that attorney, do you trust him to pay you? If you call that attorney to ask about the strengths and weaknesses of the case, does he take your call and discuss the case with you? Is the attorney a local, Delaware attorney with a good reputation? Is it someone you, your associates or friends have dealt with on prior cases? Did you have a good experience or a bad one? The bottom line is that if I were a provider and if I were going to be providing significant services and faced the choice of holding my bills under a LOP, I would consider these issues on a case-by-case basis.
Make sure the letter of protection is properly executed
Once you decide you are going to provide services under a LOP, make sure that things are legal and enforceable. If you provide services and hold your bills under a LOP, you should make sure that the LOP is a legal, enforceable contract. If it’s not, then you are not providing services under an LOP. You’re providing services under the hope that some nice personal injury lawyer will talk his client into paying you out of the proceeds of their settlement, instead of paying their rent, mortgage, light bill, car payment, Rent-A-Center bill, or instead of taking that trip to the slots they have been thinking about.
What basic elements make an LOP a legal, binding agreement?
The LOP is a three-party agreement. So you must make sure you have the patient’s and the patient’s attorney’s signature on the LOP before you provide any services. Send your LOP to the patient’s attorney to sign and return. Make it clear to the patient’s attorney that you are not providing services until the signed LOP is returned. A Letter of Protection that is not signed by the patient’s attorney is not a Letter of Protection, and will not require that attorney to pay you from the patient’s settlement.
I hope this guide provided you with some good basic information about dealing with the most commons issues that arise in getting reimbursed for treating auto accident victims. If you are a Delaware medical provider with PIP or auto accident issues and need legal help, please feel free to contact me at firstname.lastname@example.org. We offer a professional courtesy consultation to any Delaware medical provider with questions or problems relating to auto accident reimbursements.
Benjamin A. Schwartz represents Delaware residents who are severely injured in automobile accidents, such as car accidents, motorcycle accidents and commercial truck and tractor trailer accidents.