Minnesota Trial Magazine Summer 2010 - Volume 35 No. 3 PARALEGAL SECTION
Cash Advances for No-Fault Medical Claims
By Shelley M. Peters and Angela Champagne
Over the past year, a well-known insurance company has been providing cash advances to claimants for covered medical expenses. In our experience, the recipients are typically claimants who have not retained counsel and who appear to have suffered soft tissue injuries.
Below is an example of a letter a client received following his loss:
Claim Information
We are very sorry to hear that you have been injured. In an effort to help reduce the impact of your injury claim, I am the representative who has been assigned to help you with the processing of your medical and other economic loss benefits.
The Minnesota No-Fault Automobile Insurance Act provides for payment of reasonable and necessary medical expenses, disability and income loss benefits, funeral and burial expenses, replacement services, survivor’s economic loss benefits and reasonable medical mileage expense reimbursement. Our maximum payment(s) will not exceed the limit of liability for Personal Injury Protection appearing on the policy.
Under the Minnesota No-Fault Automobile Insurance Act those injured in this accident may be entitled to the following benefits:
*Medical Expenses: $20,000 for reasonable and necessary medical expenses, for treatment relating to the injuries sustained in this accident.
*Non-Medical Expenses: $20,000 for the following expenses/losses (combined):
Wage Loss: 85% of gross lost income up to weekly maximum of $250. This benefit is only for the injured party’s loss of income.
Replacement Services: $200 weekly maximum for reasonable incurred Essential Services in lieu of those the injured person would have performed without income except for the bodily injury.
Based on our telephone conversation on 2/4/10, it is my understanding that you will be seeking further treatment as a result of injuries sustained in this accident. As we discussed, I am enclosing an advance payment of your No-Fault medical benefits in the amount of $750. This payment is for you to use in paying for covered medical expenses that you may incur in the future as a result of injuries sustained in this accident.
If you do not incur any future covered medical expenses, you are entitled to retain this advance payment and are under no obligation to repay it. This payment does reduce the amount available under the Personal Injury Protection coverage for Medical Expenses from $20,000 to $19,250.
Also, as we discussed on 2/4/10 before further payment to you or medical providers on your behalf for covered medical expenses, you must incur covered medical expenses greater than the advance payment of $750. We will ask you to submit written proof to us that you incurred and paid for covered medical expenses before we will provide further medical expense benefits under your policy. The advance payment is only for covered medical expenses and is not intended to pay for any covered non-medical expenses (wage loss or replacement services).
This advance payment does not close out, settle or release your right to make a claim for future benefits for covered medical expenses.
The policy will continue to afford Personal Injury Protection benefits if you are injured in a Motor Vehicle Accident, providing treatment is a direct result of the accident and there is not a lapse of one year or more in the period of disability (total or partial) or medical treatment, up to the policy limits.
The Personal Injury Protection benefits are subject to the stated limits of the policy, current statutes and judicial interpretation.
If you have any questions, feel free to contact me at the number indicated below.
In speaking with the adjuster on this particular case, we learned the advance was intended for chiropractic treatment only and all other medical expenses would be paid as incurred. After our office was retained, the claimant informed us that some of his radiology bills were not being paid. We contacted the adjuster and learned the radiology bills were being applied to the advance. She quickly corrected the error and assured us that all of claimant’s medical expenses, other than chiropractic expenses, would be paid. To date, all expenses have been paid and the claimant has not yet chosen to seek chiropractic treatment.
In another case, the same carrier issued a $1,000 advance to a claimant who was receiving chiropractic treatment. Our office was retained within one month following the loss. The first $1,000 of chiropractic expenses had already been denied. The chiropractor soon contacted our office looking for clarification. He had received letters indicating the initial bills were denied due to advanced payment but had received payment for the most recent bills. In this case, our client obviously failed to use the advance to pay her chiropractic expenses leaving her with an outstanding bill.
In our experience, the majority of claimants who receive advance payments use the money for purposes other than medical treatment. This ultimately creates issues with the medical provider, the claimant’s future treatment and our office when having to work with an outstanding balance or lien. It is unfortunate that while the insurance carrier may view the advance payment as a way to help reduce the impact of the injury claim, it is clear the majority of claimants and their counsel are finding themselves in a less than ideal position
Contact the law offices of Sieben, Grose, Von Holtum & Carey for a free consultation. We encourage you to make this first step toward resolving your legal matters so that you can get back to your life.
