Who Pays Medical Bills After an Austin Car Accident?

Medical bills after an Austin car accident can pile up shockingly fast. Emergency room visits, ambulance rides, surgery, imaging, physical therapy, prescription medications, and follow-up appointments can easily total tens or hundreds of thousands of dollars. One of the most stressful questions accident victims face is: who pays for all of this? At McFarlane Law, we help our clients navigate the medical billing maze, ensuring their treatment is covered during the case and that every dollar of medical expenses is recovered from the at-fault party.

Call (512) 222-4900 for a free consultation about your medical bills and how to get the treatment you need without paying out of pocket.

The At-Fault Driver’s Insurance Pays — But Not Immediately

In Texas, the at-fault driver is ultimately responsible for your medical expenses. However, the at-fault driver’s liability insurance does not pay your medical bills as they are incurred — they pay in a lump sum as part of a settlement or judgment at the end of the case. This creates a gap: you need treatment now, but the money to pay for it may not arrive for months or years. Understanding how to bridge this gap is critical to your recovery and your claim.

Using Your Own Health Insurance

Your health insurance — whether employer-provided, marketplace, Medicare, or Medicaid — covers car accident injuries just like any other medical condition. Using your health insurance to pay for treatment has several advantages. You receive immediate access to care without waiting for a settlement. Your health insurer’s negotiated rates are typically much lower than the “chargemaster” prices billed to uninsured patients, which can actually reduce the total medical expenses in your claim. However, your health insurer has a right of subrogation — meaning they can seek reimbursement from your settlement for the accident-related treatment they paid for. Our attorneys negotiate these subrogation claims aggressively to minimize the amount repaid and maximize the money in your pocket.

Medical Payment Coverage (MedPay)

If your auto insurance policy includes Medical Payment Coverage (MedPay), this is a valuable resource for covering immediate medical expenses. MedPay is a no-fault coverage that pays regardless of who caused the accident. It covers medical expenses for you and your passengers up to the policy limit (commonly $5,000 to $10,000, though higher limits are available). MedPay can cover emergency room visits, ambulance transportation, surgery, imaging, physical therapy, dental work for injured teeth, and other accident-related medical costs. MedPay does not have a subrogation right in Texas, meaning you do not have to pay it back from your settlement. We recommend all Texas drivers carry the maximum MedPay coverage available on their policy.

Personal Injury Protection (PIP)

Texas law requires auto insurers to offer Personal Injury Protection (PIP) coverage, though drivers can reject it in writing. PIP functions similarly to MedPay — it covers medical expenses regardless of fault — but also covers a portion of lost wages and provides death benefits. The minimum PIP coverage in Texas is $2,500, but higher limits are available. Like MedPay, PIP does not require repayment from your settlement. If you have both PIP and MedPay, you can use both to cover your medical expenses.

Letters of Protection (LOPs)

When accident victims do not have health insurance, MedPay, or PIP — or when these coverages are exhausted — a Letter of Protection (LOP) can ensure continued access to medical treatment. An LOP is an agreement between your attorney and your medical provider guaranteeing that the provider will be paid from the proceeds of your settlement or verdict. The medical provider agrees to defer payment until the case resolves, and in return receives a guarantee of payment from the settlement funds. LOPs are common in Austin personal injury cases and allow victims to receive necessary treatment — including expensive procedures like surgery and MRIs — without paying upfront costs. McFarlane Law has established relationships with medical providers throughout Austin who accept LOPs.

Recovering Medical Expenses in Your Claim

All reasonable and necessary medical expenses caused by the accident are recoverable from the at-fault driver. This includes emergency room treatment, ambulance and air transport, hospitalization, surgical procedures, physician visits and specialist consultations, diagnostic imaging (X-rays, MRIs, CT scans), physical therapy and rehabilitation, chiropractic care, prescription medications, medical devices (braces, wheelchairs, prosthetics), mental health treatment for accident-related PTSD, anxiety, and depression, and estimated future medical costs for ongoing treatment needs.

Calculating future medical expenses requires expert analysis. Our attorneys work with your treating physicians, life care planners, and medical economists to project the cost of future treatment, adjusted for medical inflation, to ensure your settlement accounts for long-term needs.

The Collateral Source Rule in Texas

Texas follows the “collateral source rule,” which means that payments you receive from your own insurance (health insurance, MedPay, PIP) generally do not reduce the amount the at-fault driver owes you. For example, if your medical bills total $50,000 but your health insurance paid $30,000 at negotiated rates, you may still be able to claim the full $50,000 (or a reasonable amount) from the at-fault driver. This rule prevents negligent defendants from benefiting from the victim’s prudent decision to maintain insurance coverage. However, the application of this rule has been affected by recent Texas court decisions, and our attorneys stay current on the latest case law to maximize your recovery.

Do Not Delay Treatment Because of Cost

Many accident victims avoid or delay medical treatment because they are worried about the cost. This is understandable but dangerous — both medically and legally. Medically, delayed treatment can allow injuries to worsen. Legally, insurance companies use gaps in treatment to argue your injuries are not serious. Between health insurance, MedPay, PIP, and letters of protection, there are ways to access treatment without paying out of pocket. Our personal injury attorneys help arrange medical care from the start of your case. Call (512) 222-4900 or fill out the form on this page for your free consultation.