How to Handle Medical Bills During a Lawsuit

After an accident, medical bills start arriving quickly — often before you've even had time to find an attorney. Emergency room visits alone can run thousands of dollars, and ongoing treatment can reach tens or hundreds of thousands.

The challenge is timing. Your lawsuit may take 1-5 years to resolve, but medical bills are due now. This creates an impossible choice for many plaintiffs:

• Accept a low settlement to pay bills immediately
• Skip needed medical treatment to save money
• Take on credit card debt or personal loans
• Fall behind on bills and risk collections

None of these options are good. Each one either undermines your case value, compromises your health, or creates new financial risk. Understanding your options is critical.

If you have health insurance, use it. Many plaintiffs mistakenly believe they shouldn't use their own insurance for accident-related injuries. This is incorrect.

Your health insurance will cover accident-related treatment just like any other medical care. You'll be responsible for your normal co-pays and deductibles, and your insurer may have a subrogation right (meaning they can seek reimbursement from your settlement), but using insurance significantly reduces your out-of-pocket costs during the lawsuit.

Talk to your attorney about how health insurance subrogation works in your state — in many cases, your attorney can negotiate the subrogation amount down at settlement.

A letter of protection (LOP) is a document your attorney sends to medical providers promising that their bills will be paid from the settlement proceeds. The provider agrees to treat you now and wait for payment.

A medical lien is similar — the provider agrees to treat you in exchange for a lien against your settlement. The lien is repaid when the case settles.

Both options allow you to receive treatment without paying upfront. However, providers using LOPs or liens often charge higher rates than insured rates, which can reduce your net settlement. Discuss this with your attorney to understand the trade-offs.

Pre-settlement funding can be used to pay medical bills directly. Unlike medical liens, funding gives you cash that you can use for any purpose — not just medical expenses.

This is particularly useful when:

• You don't have health insurance
• Your co-pays and deductibles are substantial
• You need treatment from providers who don't accept LOPs
• You have non-medical expenses that also need attention (rent, food, transportation)

Because pre-settlement funding is non-recourse, there's no risk if your case is unsuccessful — you would owe nothing back.

This is critical: never skip or delay medical treatment to save money. Here's why:

Gaps in treatment undermine your claim. Insurance adjusters and defense attorneys will argue that if your injuries were truly severe, you would have sought consistent treatment. A gap of even a few weeks can be used against you.

Your medical records tell your story. The value of your case is largely determined by your medical documentation. Less treatment means less documentation, which means lower case value.

Your health comes first. Beyond the legal implications, delaying treatment can lead to worse medical outcomes, longer recovery times, and chronic conditions that could have been prevented.

If cost is preventing you from getting needed medical care, explore the options above — health insurance, letters of protection, or pre-settlement funding — rather than going without treatment.

As your case moves toward settlement, work with your attorney to manage medical liens and bills strategically:

• Keep records of every medical bill and payment. Your attorney will need this for the settlement distribution.
• Don't ignore bills. Even if you plan to pay them from the settlement, unpaid bills can go to collections and affect your credit.
• Negotiate provider bills at settlement. Many providers will accept less than the full billed amount, especially if your attorney negotiates on your behalf.
• Understand your total obligations. Before accepting any settlement offer, make sure you and your attorney have a complete picture of all liens, bills, and funding repayments that will be deducted.

Your attorney can help you navigate this process and ensure you receive the maximum net amount from your settlement.