I've had clients call me in a panic because their MedPay ran out and the provider's office suddenly wants to know how they're going to pay. I get why it's scary. Nobody explains this part up front. So here's the honest breakdown of what actually happens next, and who pays what, while your case is still open.
First, a clarification that trips a lot of people up. Colorado is not a no-fault state. It used to be, but that system was repealed back in 2003. What Colorado has instead is MedPay, which every insurer has to offer in a minimum amount of $5,000 per person under C.R.S. § 10-4-635, unless you rejected it in writing when you bought your policy. It's optional coverage, not mandatory PIP like some other states run. That $5,000 minimum is exactly why it runs out fast. One ambulance ride and an ER visit can burn through it before you've even started physical therapy.
So when people ask me what happens when their MedPay runs out, the honest answer is that the bills don't stop, they just find a new payer. Here's the order that usually plays out.
If you have health insurance, this is usually the next stop. Your health plan will typically pay for accident related treatment the same way it pays for anything else, subject to your deductible and copays.
The catch is that most health insurance policies include a subrogation clause. That means if you later get a settlement or verdict from the at-fault driver's insurer, your health plan has a contractual right to be reimbursed out of that recovery for what it paid. This isn't unique to Colorado, it's standard across most health plans, but it's something I negotiate down on every case where it applies. Insurers rarely get their full lien amount if the case is handled right.
If you don't have health insurance, or your provider won't bill it, some doctors and hospitals will treat you on a lien. That means they agree to wait for payment until your case resolves, in exchange for a right to be paid directly out of your settlement.
Colorado tightened the rules around this in 2021 with House Bill 21-1300. Before a provider can put you on a lien, they now have to tell you a few specific things in writing:
That last point matters. A lot of people don't realize a properly disclosed medical lien is not a personal debt if the case doesn't pan out. It's a bet the provider is making on your case, not a loan against your paycheck.
Separately, Colorado's hospital lien law also protects you from a hospital jumping the gun. A hospital is supposed to bill Medicare, Medicaid, or your available casualty insurance first before filing a lien against you. That protection exists because hospitals used to file liens the moment patients walked out the door, insurance or not.
This is the tool I use most often when a client is out of MedPay, doesn't have health insurance, or has a health plan that won't cover the type of care they actually need, like certain orthopedic specialists or long-term physical therapy. I work with lien companies and providers I know will treat accident cases on a lien basis, meaning they get you in for focused, accident specific treatment now and get paid out of the settlement later. It's how I get clients into the right kind of care right away instead of waiting months for a case to resolve, and at the end of the case, I negotiate those lien balances down before a dollar of it comes out of your pocket.
Here's the part that actually affects the value of your case. If your medical bills go unpaid because you can't figure out who's supposed to cover them, people often stop treating. Gaps in treatment get used against you by the insurance adjuster on the other side, who will argue you weren't hurt as badly as you claim because you took six weeks off from physical therapy. None of that is because you weren't hurt. It's because nobody explained how the money works.
This is a big part of what I actually do for clients day to day. It's not just negotiating the final number. It's making sure the bills get paid in the right order, the liens get worked down instead of eating your whole recovery, and you keep getting treatment instead of stalling out because MedPay ran dry in week three.
Does my health insurance have to pay for a car accident injury?
In most cases yes, subject to your normal deductible and copays, but your health plan will usually have a right to be reimbursed from any settlement you later receive.
Can a medical provider send my bill to collections while my case is open?
If you're properly on a disclosed medical lien under Colorado law, no, not for the lien amount. That's the point of the lien, it holds the bill open until the case resolves.
What if I don't have health insurance and my MedPay is gone?
This is where a lien-based provider or lien company usually comes in. It lets you keep treating with a provider who agrees to be paid out of the eventual settlement.
Will I owe money if my case doesn't settle?
For a properly disclosed medical lien in Colorado, no, absent fraud or misrepresentation on your part. That protection was added by House Bill 21-1300 in 2021.
Related reading: MedPay and Your Colorado Car Accident: What the Offer Really Means · MedPay and Your Colorado Motorcycle Accident: What Your Insurer Doesn't Have to Tell You · Insurance Bad Faith
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