Belsky Weinberg & Horowitz, LLC A Personal Injury & Workers’ Compensation Law Firm

Court of Appeals Rules PIP Benefits Are Primary and Must Be Exhausted Before Health Insurance


An issue that presents itself frequently in personal injury-related motor vehicle accident cases is the coordination of insurance benefits to pay for medical treatment and outstanding medical bills. Many individuals carry Personal Injury Protection insurance as part of their auto insurance coverage. "PIP insurance" as it is known in the industry, affords the insured a certain limited amount of "no fault" benefits (typically $2,500) to pay medical expenses and/or lost wages incurred as a result of the accident. The coverage is "no-fault" because it is available whether or not the insured caused the accident. It is also "no-fault" because payment of PIP benefits has no negative impact on the insured's policy premiums, insurability or renewability.

Yesterday, the Court of Appeals of Maryland rendered a decision of first impression in the case of MAMSI Life & Health Insurance Co. v. Wu. In that case, the Court clarified that a patient, when presenting for medical treatment, must exhaust their PIP benefits before their health insurer is obligated to provide coverage for medical treatment. Before this decision was rendered, there was debate in the legal, medical and insurance communities as to whether either a medical provider or an insurance company could, absent consent of the insured, "coordinate" the insured's insurance benefits so as to make the PIP primary and health insurance secondary. The Court ruled that under the specific statute providing for PIP benefits, an insurer may elect to coordinate the benefits in such a way as to require exhaustion of all PIP benefits before a health insurer becomes obligated to begin paying medical bills and that consent of the insured is not required.

The attorneys at Belsky, Weinberg & Horowitz, LLC, handle a vast array of motor vehicle related personal injury cases. In some instances, use of one's health insurance to pay for accident-related medical treatment has various benefits that should be evaluated at the initial consultation. In many instances, a health insurer will have a right of subrogation against the proceeds of recovery in a personal injury case, which means they must be paid back what they advanced for medical care caused by the negligence of another. In some instances, that subrogation interest may become an actual lien against the proceeds of recovery but can frequently be reduced through negotiations by up to one-third or more. Our attorneys and staff frequently are successful at negotiating reductions of health insurance subrogation claims and liens. We consider this a service to our clients and a critical part of our legal representation. Should you wish to consult with an attorney about your personal injury case, please contact our office.

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