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Colorado Auto Insurance & Crash Law · Citizen Guide 21
MedPay, Medical Bills, Liens & Subrogation
After a serious crash, one medical service can produce several different legal and financial records: a provider bill, a MedPay claim, a health-insurance payment, an adjustment, an unpaid balance, a lien, a Medicaid or Medicare recovery interest, or a contractual reimbursement demand. The first task is classification. Do not pay a label. Identify the legal basis, amount, priority and proof behind each claimed obligation.
Start by separating the payment systems
Medical treatment may be one event. Payment is not one system. Each payer or claimant can operate under different statutes, contracts, deadlines and recovery rights.
Colorado MedPay begins with a statutory $5,000 offer
Under C.R.S. § 10-4-635, a Colorado automobile liability policy within the statute generally must provide medical-payments coverage of at least $5,000 unless the named insured rejects the coverage in the required manner.
$5,000 MedPay
The statute requires the coverage to be provided in the policy or supplemental policy unless an applicable exception or valid rejection exists.
Document it
The named insured may reject MedPay in writing or in the same medium in which the application was taken. The insurer must maintain rejection proof for at least three years.
Presumed $5,000
If the insurer fails to offer MedPay or fails to maintain or provide the required rejection proof, the policy is presumed to include $5,000 in MedPay.
Read the policy and statute
The statutory definition includes the insured and an authorized passenger in the insured vehicle who sustains bodily injury arising from its use. Policy wording and statutory exceptions still matter.
The first $5,000 can be subject to a 30-day trauma reserve
Colorado gives specified trauma providers a temporary payment priority after notice of a crash.
| Priority | Provider | What to track |
|---|---|---|
| 1 | Licensed ambulance or air ambulance providing qualifying trauma care at or immediately after the crash | Date of service, transport, amount submitted, receipt date and payment. |
| 2 | Qualifying trauma physicians providing stabilization or the first episode of care | Separate physician group bills from facility bills. |
| 3 | Level IV or V trauma center providing qualifying trauma care | Confirm facility designation and claim timing. |
| 4 | Level I, II or III trauma center or regional pediatric trauma center | Track what remains after higher statutory priorities. |
MedPay has a statutory claim-handling clock
C.R.S. § 10-4-642 defines a “clean claim” and requires insurers to maintain documentation sufficient to reconstruct material claim activity.
15 calendar days
Upon request, the insurer must provide its claim-filing requirements within 15 calendar days. After specified claim/loss notices, necessary forms and instructions also have a 15-day statutory framework.
30 calendar days
A clean claim submitted electronically generally must be paid, denied or settled within 30 calendar days after receipt.
45 calendar days
A clean claim submitted by another permitted method generally carries a 45-calendar-day period after receipt.
Health insurance and MedPay can both matter
Do not assume that paying a bill through one source closes every other account or recovery issue.
| Question | MedPay | Health benefit plan |
|---|---|---|
| Source | Automobile policy | Health policy, HMO, employer plan, Medicare, Medicaid or other plan |
| Fault required? | Generally no third-party fault showing to access first-party benefit | Usually no tort-fault determination required for ordinary covered care |
| Limit | Policy limit; statutory offer starts at $5,000 unless validly rejected | Plan-specific deductibles, copays, network rules and benefit limits |
| Recovery interest? | Colorado statute sharply restricts ordinary MedPay recovery against tortfeasors | May involve contractual, statutory or federal reimbursement/subrogation rules |
| Key records | Declarations, rejection, policy, payment ledger, exhaustion letter | EOBs, plan document, SPD, payment ledger, reimbursement correspondence |
Colorado generally protects full compensation before ordinary health-plan reimbursement
C.R.S. § 10-1-135 expresses Colorado's made-whole policy for covered “payers of benefits.” In general, contractual reimbursement or subrogation is permitted only after the injured person has first been fully compensated for all damages arising from the claim, and any permitted recovery is subject to statutory limitations and a proportionate attorney-fee/expense reduction.
Who is demanding repayment?
Commercial health insurer, fully insured employer plan, self-funded ERISA plan, Medicaid, Medicare, workers' compensation, hospital or provider?
What is the legal source?
Policy language, plan document, state statute, federal statute, assignment, lien agreement or court order?
What was actually paid?
Separate billed charges, contractual write-offs, actual payments, member payments and claimed recovery amount.
What reductions apply?
Made-whole rules, common-fund/attorney-fee reductions, statutory compromise procedures, allocation or federal rules may matter.
A Colorado hospital lien has statutory prerequisites
Article 27 of title 38 does not authorize a hospital simply to bypass identified insurance and attach full chargemaster rates to the settlement without following the statute.
Nonhospital health-care provider liens are a separate statutory system
Colorado article 27.5 regulates liens created by health-care providers or assignees against third-party or UM/UIM recoveries. It is separate from the hospital-lien article.
Before the lien
Section 38-27.5-104 requires specified disclosures and advisements before creation of a health-care provider lien, including potential payment alternatives.
No inflated add-ons
Section 38-27.5-105 limits the lien to the provider's usual and customary billed charge and prohibits finance charges or other increases prohibited by the statute.
Assignee takes restrictions too
An assignee takes the lien subject to article 27.5's restrictions. The amount paid for the assignment and specified assignment information receive special evidentiary treatment under § 38-27.5-103.
Hospital Discounted Care can change what the patient is legally billed
Colorado's Hospital Discounted Care system is a patient financial-assistance framework. It is not automobile insurance and should not be confused with MedPay.
Uninsured patients—and insured patients on request
Section 25.5-3-502 requires screening of uninsured patients unless declined and allows an insured patient to request screening.
Uniform application
Effective August 12, 2026, § 25.5-3-502.5 establishes a uniform discounted-care application process when additional information is required or the patient requests an application.
Qualified-patient rate
Section 25.5-3-503 limits qualifying charges to the discounted rate established by HCPF rules and imposes statutory installment-payment limits.
36-month endpoint
For qualifying charges under § 25.5-3-503, after a cumulative 36 months of required payments the remaining balance is treated as paid in full and collection activity must cease.
Medicaid and Medicare require their own recovery tracks
Statutory lien
C.R.S. § 25.5-4-301 gives HCPF specified recovery and lien rights when medical assistance was furnished and a third party is liable. The statute also contains notice duties when a member or representative asserts a third-party claim.
Federal secondary-payer system
Medicare conditional-payment and recovery rights arise under federal law. Obtain the recovery information and resolve the federal interest rather than treating Medicare like an ordinary commercial health insurer.
Employer health plans require plan-level classification
“ERISA” is not one reimbursement rule. Determine whether the plan is fully insured or self-funded, obtain the governing plan document and summary plan description, identify reimbursement language, and analyze federal preemption before assuming Colorado's § 10-1-135 controls.
Build one medical-payment ledger
The ledger should let another reviewer reconstruct where every medical dollar went.
- Provider name and account number
- Date(s) of service
- Original billed amount
- Contractual adjustment / write-off
- Health insurer payment
- MedPay payment
- Patient payment
- Current balance
- Collections status
- Lien type and recording information
- Reimbursement claimant
- Amount actually paid by claimant
- Reduction / compromise requested
- Final resolved amount
Gross settlement is not net recovery
Before signing a release, create a settlement distribution statement that separates confirmed obligations from disputed or unverified demands.
| Claim | Verify | Do not assume |
|---|---|---|
| MedPay | Limit, payments, denials, exhaustion and whether any benefit remains | That MedPay is a lien against the settlement |
| Hospital lien | Statutory prerequisites, payer submission, filing, notice and amount | That the gross hospital balance equals a valid lien |
| Provider lien | Article 27.5 disclosure, amount and agreement | That every provider balance has settlement priority |
| Commercial health plan | Plan type, payment ledger, reimbursement provision and § 10-1-135 analysis | That the recovery vendor's opening demand is final |
| Medicaid | HCPF lien/recovery amount, notice and statutory reduction procedure | That ordinary made-whole law controls |
| Medicare | Conditional-payment record and final demand process | That an EOB or provider balance resolves Medicare's federal interest |
| ERISA plan | Actual plan documents, self-funded status, language and federal law | That state reimbursement limits necessarily apply |
Citizen workflow: from first bill to final distribution
Primary authority map
VictimsGuide resources supporting Guide 21
Frequently asked questions
Is MedPay required in Colorado?
Colorado generally requires an automobile policy within C.R.S. § 10-4-635 to provide at least $5,000 in MedPay unless the named insured validly rejects it or a statutory exception applies.
What if the insurer cannot produce my MedPay rejection?
If the insurer failed to offer MedPay or fails to maintain or provide the rejection proof required by § 10-4-635, the statute provides a presumption that the policy includes $5,000 in MedPay.
Does MedPay have to be repaid from my liability settlement?
Do not assume so. Section 10-4-635(3) bars the MedPay insurer from ordinary recovery against the tortfeasor for MedPay benefits paid and bars a direct tortfeasor action. Other payment systems—health plans, Medicaid, Medicare, workers' compensation, hospital/provider liens—have different rules.
Why did the insurer hold some MedPay instead of paying my later provider?
After notice of a qualifying crash, Colorado law can require the insurer to reserve $5,000 for specified trauma providers for up to 30 days. That temporary priority can affect payment timing.
Does a hospital automatically have a lien because I was injured by another driver?
No. Colorado's hospital-lien statute contains payer-submission, filing, notice and other prerequisites. Obtain the lien documents and test statutory compliance rather than relying on the word “lien” on a bill or letter.
Can an insured patient request Hospital Discounted Care screening?
Yes. Current § 25.5-3-502 allows an insured patient to request screening. Eligibility and the resulting discount/payment plan depend on the statutory and regulatory criteria.
Does Colorado's made-whole law eliminate every reimbursement claim?
No. Section 10-1-135 is powerful but not universal. It contains exclusions and does not displace Medicaid, hospital-lien or workers' compensation rights; federal Medicare and ERISA issues may require separate analysis.
What should I know before settlement?
Know the MedPay status, every provider balance, every asserted lien, every health-plan/public-benefit recovery interest, the amount and legal basis of each claim, available reductions, UM/UIM posture and the estimated net recovery after verified obligations.
Do not ask only, “How much are the medical bills?”
Ask who billed it, who paid it, what was adjusted, what remains due, whether a valid lien exists, whether a payer has a lawful reimbursement right, what reductions apply, and what the injured person will actually receive after settlement. One coordinated ledger turns a fragmented billing system into a reviewable claim file.