“If we get some of your bills, do we have permission to pay your medical providers directly?”
That’s a question that I’ve started seeing when GEICO takes recorded statements of some of my clients (and I can only assume that other insurance companies will follow behind). It seems innocuous. The client says, “yes.” Of course, that would be great.
Agreeing to this simple request can really hurt your accident claim. Why?
Medical expenses are funny. For most medical providers, there are at least two numbers for medical bills. First, there is the “rack rate” — the full price rate that the medical providers try to charge those without insurance. Second, there is the “insurance rate” — the contractual rate that the medical provider and health insurance companies agree is a proper charge for a particular service. (And in reality, these insurance rates can be different for every different health insurance company, Medicare, Medicaid, and so on.)
Which rate is charged, has an impact on your case.
By offering to pay the bill directly, GEICO and other carriers are trying to get permission to go to your medical providers and try to cut your case out from under you. They’ve paid something they’re going to have to pay anyway, often at a lower rate than you would be able to recover from them, and in the process, they’re decreasing the value of your claim while decreasing their risk. It’s all good to them.
It’s also taking money out of your pocket. If hospital A has a $10,000 bill but is willing to accept $7,500 (and I’m making these numbers up), then if GEICO pays the hospital directly, it saves itself $2,500. However, if the lawsuit goes forward and GEICO has to pay you, the client, the $10,000 and then you pay the hospital the $7,500, then that $2,500 savings goes to you and not the hospital.
So agreeing to this seemingly innocent request is costing you money!
There are a number of ways that an insurance company can use a recorded statement to its advantage. While this is a relatively new tactic, it’s not the only tactic. We always tell our clients that they shouldn’t agree to a recorded statement without having a lawyer present to help protect the clients’ rights.
If you or a loved one has been in a car wreck and have been contacted about a recorded statement, please call us at (512)476-4944 and let us help you before that statement occurs.