Who Pays Medical Bills During an Injury Case? Illinois

Last Updated: September 15, 2026

While an Illinois injury case is pending, the medical bills come to you. Which source pays first depends on your policies: health insurance, medical payments coverage on your auto policy if you bought it, or a provider that agrees in writing to wait for the settlement. Repayment rights depend on the plan or policy terms and the rules that apply.

After a serious crash the bills start almost immediately: the ambulance, the emergency room, the imaging, the follow-up visits. Your injury case, though, can take many months to resolve. One of the first questions people ask us is simple and urgent: who pays for my treatment right now?

The other driver’s insurer usually pays at the end of the claim, as a settlement or a judgment. While the claim is pending, the bills come to you. You cover the care through one or more of three sources: your health insurance, medical payments coverage on your own auto policy if you bought it, or a provider’s written agreement to wait for payment. Which source pays first depends on your policies. Whether a source is repaid out of the settlement at the end depends on the plan or policy terms and the rules that apply to it. The sections below take the three sources in turn and then explain what happens at the end. For the bigger picture, see our guide on who pays medical bills after a car accident in Illinois.

The other half of the waiting game is how long an Illinois insurance settlement takes.

Will the at-fault driver’s insurance pay your bills while the case is pending?

Usually not. The other driver’s liability policy is a contract between that driver and that driver’s insurer. When that company handles your claim against the other driver, it acts for that driver, not as your insurer. That stays true even if you also carry a policy with the same company. The other driver’s insurer usually handles the negotiation and pays the settlement or judgment when the claim ends. Until then, how your bills get paid depends on the policies you have and the agreements you make; the next three sections explain each one.

Source 1: Medical Payments coverage (MedPay) on your own auto policy

MedPay is an optional, no-fault coverage you may already carry on your own car insurance. It pays reasonable and necessary medical expenses from a crash regardless of who was at fault, up to your limit (commonly $1,000 to $25,000). Because it is a direct, no-fault benefit, MedPay money tends to arrive fast, often within days of submitting bills. Our overview of MedPay and UM/UIM coverage in Illinois explains how these first-party coverages fit together.

A few things people do not know about MedPay:

It only pays medical and funeral expenses. MedPay does nothing for lost wages or for pain and suffering. Those are recovered later, from the liability claim or your own underinsured-motorist coverage.
It is often not open until you ask. Many people never realize they have it. We can ask your own carrier to open a MedPay claim and tell you the limit.
It can cover what your health plan leaves to you. Copays, deductibles, the ambulance bill, and charges your health plan declines can be submitted to medical payments coverage, subject to your policy’s terms and limit. Whether it pays before or after your health insurance depends on the policy language; Illinois does not require it to pay first.
It may have to be repaid at the end. Whether your auto insurer can be repaid from the recovery (the money the claim brings in) depends on the terms of your policy, which may include a repayment clause; lawyers call it subrogation or reimbursement. Read the policy, or have your lawyer read it, before you count on keeping that part of the settlement.

Source 2: Your own health insurance

If you have health insurance, private, employer, Medicare, or Medicaid, use it. What your health plan pays a provider can be less than the amount the provider bills. Whether the plan can then be repaid out of your recovery, and how much, depends on the plan’s terms and the rules that apply to it.

The trade-off can be repayment. A health plan may include a clause that lets it claim back, out of your recovery, what it paid for crash-related care; lawyers call the clause subrogation or reimbursement. Whether your plan has that right, and what it can claim, depends on the plan document and the rules that apply to it. Ask the plan, in writing, what its repayment rules are, and give the answer to your lawyer. Keep every explanation of benefits, the statement your health plan sends showing what it paid and what you owe; those statements answer the repayment questions at the end.

One caution. Some providers hold the bill rather than send it to your health plan, or ask you to sign an agreement to be paid from the settlement instead. If that happens, ask the provider in writing to bill your health plan, and tell your lawyer what the provider is asking. The request can then be checked against your plan before you sign anything or pay the full charge.

If you are on a Medicaid managed-care plan, Medicaid’s repayment rights follow their own rules, so tell your lawyer early which plan you have. See our guide on how medical liens reduce your net settlement in Illinois.

Source 3: Letters of protection and medical liens

When health coverage and medical payments coverage do not reach a bill, some providers will treat you now and agree in writing to wait for payment from the settlement. Lawyers call that written agreement a letter of protection. Read its terms closely: ask what happens if the recovery is smaller than the bill or there is none, and have your lawyer read it before you sign. A provider that waits may also hold a lien, a legal claim on your recovery for the unpaid bill, under the Health Care Services Lien Act, 770 ILCS 23/10. An agreement to wait and a lien under that Act are two different things; which providers the Act covers, and whether a particular provider holds a lien under it, depend on who is owed and need review for your case.

That Act also limits what those liens can take. All liens under the Act together are capped at 40% of your total recovery, and no single licensed category (all physicians together, or all hospitals together, for example) may take more than one-third. If the liens reach 40% or more, all health care professionals together, physicians among them, are limited to 20%, and all health care providers together, hospitals among them, to 20%. Those limits apply to liens under the Act; Medicare and Medicaid repayment rights sit outside them, and a health plan’s repayment rights depend on the plan’s terms and the rules that apply to it. A court can sort out competing liens under the Act if it comes to that.

Which source pays first, and what happens at the end?

Who pays first depends on your policies. Medical payments coverage is optional, and Illinois does not require it to pay before your health insurance; the order depends on the policy language. A provider’s written agreement to wait can cover treatment the first two do not reach. At the end of the case, whoever paid or waited may ask to be repaid out of the settlement. Whether a health plan or an auto insurer can be repaid depends on the plan or policy terms and the rules that apply to them. A provider that waited may hold a lien for the unpaid bill. Your lawyer resolves those claims before the balance of the settlement is paid to you. The bills, payment records and explanations of benefits you kept along the way are the documents those claims are checked against.

One Illinois rule works in your favor through all of this: the collateral source rule. The at-fault driver cannot pay you less just because your own insurance has been covering your bills. The benefit you paid for, your coverage, is not a gift to the person who hurt you. Subrogation and liens then make sure no one is paid twice for the same bill. Part of our job is to negotiate those liens and reimbursement claims down so that as much of the recovery as possible stays with you. In one matter we fought a single medical lien for more than a year to keep over $20,000 in our client’s pocket.

Frequently Asked Questions

Does the at-fault driver’s insurance pay my medical bills as I treat?

Usually not. When the claim ends in a settlement or a judgment, that insurer is usually the one that pays. While the claim is pending, the bills come to you. How they are paid depends on the policies you have and the agreements you make: your health insurance, medical payments coverage on your own auto policy if you bought it, or a provider’s written agreement to wait. Whether any of those sources is repaid from the settlement depends on the plan or policy terms and the rules that apply to them.

What does MedPay cover, and what does it not cover?

Your policy sets what medical payments coverage pays. As a rule it pays medical and funeral expenses from the crash up to the limit you bought, regardless of who was at fault. It does not pay lost wages or pain and suffering. It can cover copays, deductibles, the ambulance bill, and charges your health plan leaves to you, subject to your policy’s terms. Whether it pays before or after your health insurance depends on the policy language, and Illinois does not require it to pay first.

Will I have to pay my health insurance or MedPay back out of my settlement?

It depends on the plan or policy. Whether your health plan or your auto insurer can be repaid from the recovery depends on the plan or policy terms and the rules that apply to them. A plan or policy with a repayment clause (lawyers call it subrogation or reimbursement) may ask to be repaid what it paid for crash-related care. Keep every explanation of benefits and every payment record; those documents show what each source paid and answer the repayment questions at the end.

How much of my settlement can medical liens take in Illinois?

Under the Health Care Services Lien Act (770 ILCS 23), all provider liens together cannot exceed 40% of your recovery, and no single category of provider can take more than one-third. A court can adjudicate and reduce competing liens.

What is a letter of protection?

A letter of protection is a written agreement among you, your lawyer and a provider: the provider treats you now and agrees to wait for payment from the settlement. It is used when health coverage and medical payments coverage do not reach a bill. Ask what happens if the recovery is smaller than the bill or there is none, and have your lawyer read it before you sign. A provider that waits may also hold a lien on your recovery under the Health Care Services Lien Act. An agreement to wait and a lien under that Act are two different things; whether a provider holds one depends on who is owed and needs review for your case.

If bills are arriving after a crash another driver caused in the Peoria area, or you are reading this for a family member who was hurt, call Robert Parker at 309-673-0069 for a free consultation. Bring what you have; the bills, the insurance cards and the policy pages can come later. Robert Parker personally handles every case the firm accepts, and sorting out who pays for care during a claim is part of the firm’s Peoria personal injury practice.

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