Unlike injuries covered by Workers’ Compensation benefits, settlements and awards in personal injury claims – such as auto accidents or “slip and fall” – cannot be “left open” for payment as needed for future medical expenses.
Most doctors know that injured workers with accepted injuries may receive ongoing medial care at the Comp carrier’s expense. Not so with personal injuries. This article explains how payment for medical expenses differ between an auto accident injury and a work injury.
As explained in an article in Volume 1 of the Medical-Legal Journal, auto accident injuries are initially covered by no-fault Personal Injury Protection (PIP), usually from the insurance policy on the car the patient was in when he/she was injured. This stays in effect for ONE YEAR after the accident or until the limits of coverage (usually $10,000) run out, which ever comes first.
If there is a liability claim against an at-fault driver, the remaining medical expenses resulting from the accident will be paid after the settlement or judgement amount has been paid by the liability carrier. But the settlement/judgement amount is always a FIXED SUM. Once paid, the liability carrier’s financial obligation ends. Unlike Workers’ Compensation injuries which may provide lifetime medical coverage for the accepted condition, liability insurers do not “leave the medical open” or allow for “open-ended meds for two years.” Such arrangements may be reasonable to expect and ask for, but from the insurers’ perspective, they do not adequately “define the risk.”
Rather, “future meds” in personal injury claims must be projected and figured into the settlement/judgement amount. A value must be put on future treatment now.
As treating doctor, you may be asked to project the future medical care of your patients. Your projection should include: 1) the likelihood of the need for care; 2) a specific description of the type and extent of care; and 3) an estimate of the projected costs of the care, taking into account how long the care will be needed and/or the life expectancy of the patient.
So, for example, “three weeks of physical therapy” or “treatments 2x a year” are not adequate estimates.
In many cases, the dollar figure you estimate will not be the amount of award your patient actually receives for future medical expenses. First, the dollar amount may be reduced to “present value” according to a formula. Then the estimated cost of the future meds (or the present value) will be lumped together with other damages to come up with a settlement/judgement amount. Of course, the liability policy limits, negotiations and the whims of juries may also affect the final sum your patient receives.
Notwithstanding all these other variables, the more specific your estimate is, the better chance your patient has of receiving a settlement or judgement which most closely approximates his or her actual future medical expenses.
This article was prepared by Robert L. Chapman.