A car-accident patient needs an ORIF this week. The settlement may take two years. Between those two dates sit auto insurers, attorneys, health plans and possibly Medicare, each with its own rules about who pays first and when.
Personal injury work can be valuable for orthopedic practices, but only when the payer order is set at intake and every case is tracked to settlement. This guide covers how to bill PIP and Med-Pay, when to accept a letter of protection or lien, how Medicare’s secondary payer rules apply, and how to keep injury cases from stalling cash flow.
Who Pays in Injury Case: Set Payer Order at Intake
The first billing decision in an injury case is the payer order, and it has to be made at registration. Ask how the injury happened, who else was involved, and whether the patient has an attorney.
| Payer source | What it is | When you get paid |
|---|---|---|
| PIP (personal injury protection) | No-fault auto coverage required in no-fault states | During treatment, usually primary for auto injuries |
| Med-Pay | Optional auto medical coverage, paid regardless of fault | During treatment, up to the policy limit |
| Health insurance | The patient’s own plan, including Medicare or Medicaid | During treatment, often after PIP or Med-Pay is exhausted |
| Letter of protection (LOP) | The attorney’s written promise to pay from the settlement | At settlement |
| Medical lien | A claim against the settlement, governed by state law | At settlement |
Record every source in the account at the first visit, along with the claim number and the attorney’s contact. Missing this step is how injury balances end up billed to the wrong payer or sitting unbilled for months.
Billing PIP and Med-Pay Claims
PIP and Med-Pay pay during treatment, so they are the fastest cash in an injury case. They are also unforgiving about deadlines and limits.
- Bill the auto carrier first. In no-fault states PIP is usually primary for auto injuries; health plans, including Medicare, typically pay only after it.
- Check the state’s rules. Many no-fault states set a PIP fee schedule and short claim-submission deadlines. Build each state’s rule into your claim edits.
- Send complete records. Auto carriers often request notes, imaging reports and itemized bills before paying. Send them with the claim to avoid a records-request delay.
- Get the exhaustion letter. When PIP or Med-Pay limits are used up, obtain the carrier’s written exhaustion notice and bill the patient’s health plan with it attached.
The health plan’s own timely filing limit keeps running while you wait on the auto carrier. Our guide to timely filing denials covers how to protect those deadlines. Workplace injuries follow different rules; see our post on workers’ compensation billing in orthopedics.
Letters of Protection & Liens: Terms Before Treatment
An LOP or lien defers payment until the case settles, often a year or more after surgery. That makes the terms more important than the paperwork.
Confirm these in writing before you treat on an LOP or lien:
- Who signs. The patient and the attorney should both sign, and the document should state that the patient remains responsible for the bill.
- What is covered. List the services, or state that all treatment for the injury is covered, including surgery, imaging, DME and therapy.
- What happens at settlement. The attorney pays the practice directly from the settlement before releasing funds to the patient.
- What happens if the case is lost or dropped. The patient’s liability, and whether you may then bill their health plan.
- How state law applies. Lien rights, notice requirements and limits on reductions vary by state, so have counsel review your templates.
Treating on an LOP also means waiting. Some practices sell LOP and lien receivables to funding companies at a discount to get paid sooner (KFF Health News); weigh that discount against your cash needs case by case.
Medicare Patients in Injury Cases: Secondary Payer Rules
When the patient has Medicare, federal Medicare Secondary Payer (MSP) rules decide how long you can wait on an injury payer.
- No-fault and Med-Pay come first. Bill the auto carrier before Medicare for injury-related care.
- Liability insurance has a 120-day window. You may bill a liability insurer, or file a lien against the settlement, if payment is expected “promptly”: within 120 days of the claim or lien filing, or the date of service, whichever is earlier (42 CFR 411.50).
- After that window, Medicare can be billed. Once you bill Medicare, withdraw the lien and accept Medicare’s payment; you may then collect only the deductible and coinsurance from the patient.
Track the 120-day date on every Medicare injury account. Holding a lien past it, and then billing the patient’s full charges, creates compliance exposure. Medicare Advantage plans and Medicaid have their own coordination rules, so confirm them with each plan.
Protecting Cash Flow Until Settlement
Injury balances do not age like insurance A/R, so they need their own work queue. Three habits keep them moving.
Track Lien and LOP A/R Separately
Keep these accounts outside standard aging buckets, with the attorney, case status, expected settlement date and last contact on each one. Check status at a set interval, such as every 60 to 90 days.
Answer Attorney Reduction Requests With Data
Attorneys often ask practices to reduce bills so the client nets more. Set a written policy on who can approve reductions and by how much, and compare each request to your payer-allowed rates before agreeing.
Send Records and Itemized Bills Fast
Attorneys need the itemized statement, operative notes, imaging reports and DME and therapy charges to settle. Delays here push your payment back.
For broader A/R workflows, see our guide to accounts receivable management, and for how injury cases fit with other orthopedic revenue challenges, read orthopedic billing challenges.
Treat Injury Cases as Their Own Revenue Stream
Personal injury billing pays when the payer order is set at intake, PIP and Med-Pay are billed fast and exhausted on paper, LOP and lien terms are confirmed before treatment, and Medicare’s 120-day window is tracked on every account. Managed that way, injury cases add revenue instead of aging in A/R.
MBW RCM’s orthopedic billing services team handles injury-case intake checks, auto and no-fault claims, and lien and LOP follow-up for orthopedic practices. Contact us for a review of your personal injury A/R.