PIP, med-pay and who pays the first medical bills

The first medical bill arrives before anyone has decided who caused the crash. Somebody pays it, and which somebody is settled by the law governing the policy, not by the collision. In a minority of US jurisdictions a first-party benefit pays it because a statute says it must; in most of the rest it is paid by whoever the injured person can get to pay it, and reimbursed at the end, if there is an end.

What follows is a reading of one of those statutes. Minnesota’s No-Fault Automobile Insurance Act, Minn. Stat. ch. 65B, is a published chapter of a state statute, quoted here from the pages the state’s Office of the Revisor of Statutes serves — not a specimen, a composite or a policy written to illustrate a point. The words in quotation marks are the chapter’s own, and it is read in the order the chapter prints it, with other markets’ instruments alongside where they answer differently.

§ 65B.42 — the purposes the legislature wrote for itself

Most statutes make you infer the bargain. This one prints it. Section 65B.42 opens on «the detrimental impact of automobile accidents on uncompensated injured persons», then lists what the chapter is for.

Clause (1) is the benefit: policies «which will provide prompt payment of specified basic economic loss benefits to victims of automobile accidents without regard to whose fault caused the accident». Clause (2) is the price: «to prevent the overcompensation of those automobile accident victims suffering minor injuries by restricting the right to recover general damages to cases of serious injury». Clause (3) says why speed is in the statute at all: «to encourage appropriate medical and rehabilitation treatment … by assuring prompt payment for such treatment».

That is the whole trade, written by the legislature about its own statute. What the section leaves undefined is everything operative. «Serious injury» appears in clause (2) undefined; nothing in § 65B.42 says what a benefit contains, who owes it, or when it is late.

§ 65B.44 — what a benefit is, and what it is not

Subdivision 1(a) is the number people quote. Basic economic loss benefits «shall provide a minimum of $40,000 for loss arising out of the injury of any one person», split into «$20,000 for medical expense loss» and «a total of $20,000 for income loss, replacement services loss, funeral expense loss» and the survivors’ equivalents.

The rest of the section is what decides claims. Medical expense benefits «shall reimburse all reasonable expenses for necessary» care. Income loss is «85 percent of the injured person’s loss of present and future gross income … subject to a maximum of $500 per week». And the chapter says what is outside: the benefits «do not include benefits for physical damage done to property including motor vehicles and their contents».

So the benefit is economic, itemised and capped element by element, and there is nothing in it for pain. Other markets draw the same box in different sizes: Florida provides personal injury protection «to a limit of $10,000 in medical and disability benefits and $5,000 in death benefits», at eighty percent of medical expenses; New York’s reaches fifty thousand dollars per person but meters the pieces, with «loss of earnings from work» at «$2,000 per month for not more than three years».

What no version defines is the pair of words the disputes turn on. «Reasonable» and «necessary» are the test in Minnesota and, in their own phrasing, everywhere else: the statute sets the ceiling, and somebody else decides what fits under it.

§ 65B.48 and § 65B.46 — who must carry it, and who falls outside

The duty is flat. «Every owner of a motor vehicle of a type which is required to be registered or licensed or is principally garaged in this state shall maintain … a plan of reparation security». Two sections earlier, the chapter says who that reaches: «every person suffering loss from injury arising out of maintenance or use of a motor vehicle or as a result of being struck as a pedestrian by a motorcycle has a right to basic economic loss benefits». Not every policyholder — every person.

Then the carve-out, which the legislature made the insurer put in writing. Injuries suffered «while on, mounting or alighting from a motorcycle do not arise out of the maintenance or use of a motor vehicle although a motor vehicle is involved in the accident», and a motorcycle applicant must be handed a notice in 10-point bold type stating that «No PIP coverage provided by an automobile insurance policy you may have in force will extend to provide coverage in the event of a motorcycle accident».

Maryland shows the third possibility, the one readers most often mistake for no-fault. There, «each insurer that issues, sells, or delivers a motor vehicle liability insurance policy in the State shall provide coverage for the medical, hospital, and disability benefits described in this section» — a floor of «up to $2,500» — «unless waived». The waiver belongs to one person: the first named insured may make «an affirmative written waiver of those benefits», binding each named insured, each listed driver and every household family member at least sixteen. Maryland adds the benefit without taking the claim away; nothing in either section creates a threshold.

§ 65B.54 — when a benefit becomes overdue

Benefits «are payable monthly as loss accrues», and the chapter defines accrual against intuition: «Loss accrues not when injury occurs, but as income loss, replacement services loss … or medical or funeral expense is incurred.» They are then «overdue if not paid within 30 days after the reparation obligor receives reasonable proof of the fact and amount of loss realized». Overdue payments «shall bear simple interest at the rate of 15 percent per annum», and a refusal has a form: an insurer who rejects a claim «shall give to the claimant prompt written notice of the rejection, specifying the reason».

Florida’s clock looks identical and starts somewhere else. Benefits there are overdue if not paid within 30 days after the insurer «is furnished written notice of the fact of a covered loss and of the amount of same» — notice, not proof — but the same subsection adds that «payment is not overdue if the insurer has reasonable proof that the insurer is not responsible for the payment». Minnesota makes proof the thing that starts the clock; Florida makes proof the thing that can stop it, and two apparently identical thirty-day rules allocate the delay to opposite parties.

Florida also gates the front of the claim in a way Minnesota does not: medical benefits are reimbursable only if the injured person «receives initial services and care … within 14 days after the motor vehicle accident», and reimbursement is «limited to $2,500» where a provider determines the person «did not have an emergency medical condition».

None of this is the deadline that ends a lawsuit. The deadline calculator, on its injury setting, runs that other clock — the limitation period for a court action, not the thirty days an insurer has to pay a bill.

§ 65B.51 — what it costs you in exchange

Clause (2) of the purposes section is cashed here, in two mechanisms. The first is arithmetic: «the court shall deduct from any recovery the value of basic or optional economic loss benefits paid or payable, or which would be payable but for any applicable deductible», while subdivision 2 preserves an action for the economic loss those benefits do not reach.

The second is the gate on general damages. «In an action described in subdivision 1, no person shall recover damages for noneconomic detriment unless» a computed sum «exceeds $4,000» — medical expense benefits paid or payable, plus free care by a relative, plus an adjustment for undercharged services, minus the benefits paid «for diagnostic x-rays and for a procedure or treatment for rehabilitation and not for remedial purposes» — «or the injury results in: (1) permanent disfigurement; (2) permanent injury; (3) death; or (4) disability for 60 days or more», where disability «means the inability to engage in substantially all of the injured person’s usual and customary daily activities».

Read the subtraction twice: the money route excludes two categories of spending an injured person is likely to accumulate early, so treatment can be extensive without the threshold moving.

New York sets the same gate with no money in it: non-economic loss turns on «serious injury», and serious injury is only what the definitions section says it is — «death; dismemberment; significant disfigurement; a fracture; loss of a fetus; permanent loss of use of a body organ, member, function or system», on to «significant limitation of use of a body function or system», which is as far as the page we fetched carried the definition. Delaware imposes no threshold at all and reaches the same anti-duplication result through evidence: a person eligible for its benefits «is precluded from pleading or introducing into evidence in an action for damages against a tortfeasor those damages for which compensation is available». One objective — nobody is paid twice — reached three ways that feel nothing alike.

Med-pay: the coverage with no text to read

Only one of the two coverages named in the title has a text to read. Medical-payments coverage is an ordinary optional first-party coverage sold on a policy; no statute read here defines it, prescribes a minimum or says when it is late, and the one regulator page consulted described no coverage types at all, so nothing is asserted here about what a med-pay endorsement contains. The comparison that can be made is structural: a statutory benefit arrives with a purposes section, a floor, a list of who is covered, an overdue clock and a price. A coverage sold on a policy arrives with whatever the policy says, and the document to read is the policy.

What we cannot tell you

We cannot tell you what your own first medical bill will do: this chapter governs one state, and the answer changes at every border in this article. Which of those worlds you are in is the fault system in the jurisdiction notes below — and where a first-party benefit is compulsory, those notes carry the statutory minimum and the threshold in the instrument’s own operative words. We also cannot tell you what «reasonable and necessary» will mean for your treatment; every statute read here delegates that and none defines it.

What the reading leaves is a shape. A no-fault chapter pays early, itemises what it pays, and charges for the speed by narrowing what may later be claimed for the injury itself. An add-on state pays early and charges nothing. A liability-only state pays late, which is a bargain only for a person who can wait.