Published August 20, 2026 · By Terry W. Posey, Esq.

Most people who buy car insurance in Ohio have a small, quiet piece of coverage they have never thought about: medical payments coverage, usually written as "MedPay" or "MPC." It is typically $1,000 to $10,000, it pays regardless of who caused the crash, and it is supposed to cover your medical bills right away, before anyone finishes arguing about fault.

So when a crash victim finds out that her $5,000 in MedPay was paid out and she personally received $190.07 of it, the natural reaction is that something went wrong.

On July 28, 2026, Ohio's Tenth District Court of Appeals decided Thomas v. State Farm Mutual Automobile Insurance Co., 2026-Ohio-2896, and held that nothing did, at least not in the legal sense. The decision is worth understanding before you are the person asking where your money went.

What Happened

Paige Thomas was hurt in a June 2019 crash in Franklin County. She said the other driver was at fault, and that she suffered permanent and disabling injuries. She had a State Farm policy with $5,000 in medical payments coverage, and the parties agreed her crash-related medical bills exceeded that $5,000.

Her health insurer, Medical Mutual of Ohio, paid those medical bills first. Medical Mutual then did what health plans routinely do: it asserted a subrogation claim (a demand to be reimbursed out of the accident-related insurance money) through a third-party recovery company called The Rawlings Company.

In November 2019, Thomas's attorney wrote to State Farm giving notice of her MedPay claim and taking the position that State Farm was not permitted to pay medical providers directly. In October 2020, State Farm paid $4,809.03 of the MedPay benefit straight to Rawlings anyway. The remaining $190.07 was not sent to Thomas until May 2024.

Thomas sued. She raised a negligence claim against the other driver (later resolved by a confidential settlement), a breach of contract claim against State Farm, and a bad faith claim against State Farm. After a bench trial on the contract claim and summary judgment on the bad faith claim, she lost both. The court of appeals affirmed.

The Three Rulings That Matter to Injured People

1. Your MedPay can be paid to your health plan instead of to you. The trial court found, and the appeals court left undisturbed, that State Farm did not breach the policy by sending the MedPay money to the health insurer's recovery company rather than to Thomas. If your health insurance has already paid the bills, MedPay often ends up reimbursing the health plan. That is not a scandal; it is how the two coverages coordinate. But it means you should never build your budget around a MedPay check arriving in your mailbox.

2. Delay is measured against what you gave the insurer. The four-year wait for the last $190.07 looks damning until you see the reason the courts accepted: Thomas's medical records were not provided to State Farm until after suit was filed, during discovery. The trial court found the delay "was reasonable under the circumstances." Insurers cannot evaluate what they have not seen, and every month you sit on your records is a month the insurer will later point to.

3. Bad faith is a high bar, but it is not limited to outright denials. This is the most useful part of the opinion. Ohio law has required insurers to act in good faith in handling and paying their insureds' claims since Hoskins v. Aetna Life Ins. Co. (1983). An insurer fails that duty when its refusal to pay "is not predicated upon circumstances that furnish reasonable justification", in other words, when it acts arbitrarily or capriciously.

Importantly, the court confirmed that bad faith claims are not confined to flat denials. An insurer's "foot-dragging" in handling or evaluating a claim can support a bad faith claim even if the claim is eventually paid, a principle our own Second District Court of Appeals here in the Dayton area recognized in Mundy v. Roy (2006).

But the court also drew the line clearly: "the 'essential inquiry' is not whether the insurer's decision was correct but whether that decision lacked a reasonable justification." An insurer can be wrong and still not be in bad faith. Thomas lost because, once the trial court found State Farm's conduct reasonable on the stipulated facts, there was nothing arbitrary left to try.

Filing an Injury Claim Opens Your Medical Records

Thomas also asked for a protective order to stop State Farm from selling, publishing, or sharing her health information. The court refused, and the reasoning is something every injury client should hear up front.

Under Ohio law, the physician-patient privilege gives way once the patient files a civil action. See R.C. 2317.02(B)(1)(a)(iii). And her own policy required her to authorize State Farm to obtain the medical bills and records needed to substantiate her claim. To get a protective order under Civ.R. 26(C), she needed "good cause", a clearly defined and serious injury. Her argument that State Farm "may sell" her information was, the court held, too conclusory to qualify.

The practical translation: when you make an injury claim, your relevant medical history becomes part of the case. That is not a reason to avoid filing. It is a reason to have a lawyer control what gets produced, to whom, and in what form.

The Claim at a Glance

What You Should Take From This

Ask what coverages you actually have. MedPay and uninsured/underinsured motorist coverage are the two pieces of your own policy that matter most after a serious crash. Many Ohio drivers do not know whether they carry them.

Get your records and bills to the right people, early. The single strongest fact against Thomas was that the insurer did not have her medical records until litigation. Documentation is leverage. Withholding it is not.

Expect subrogation, and negotiate it. Health plans, Medicare, Medicaid, and hospital liens all want reimbursement from your recovery. How much they actually collect is frequently negotiable, and that negotiation can be worth more to you than the headline settlement number.

Understand what bad faith really requires. A rude adjuster, a lowball offer, or a decision that turns out to be wrong is not automatically bad faith. Unreasonable, arbitrary, unjustified handling (including unexplained foot-dragging) is where the claim lives.

None of this is a reason to fight your insurance company alone. It is a reason to know what the rules are before you start. For related reading, see our post on how long you have to file a car accident claim in Ohio, and our overview of Dayton car accident claims.

Talk to a Dayton Injury Lawyer: Free

If you were hurt in a crash and you are not sure what your own policy owes you, whether your MedPay was handled correctly, or what a health plan or lien holder is entitled to take out of your recovery, we can walk you through it. The Law Offices of Terry W. Posey has represented injured people across the Dayton area and throughout Ohio for over 30 years, in personal injury matters of every kind.

The consultation is free, and you pay no fee unless we win. Call 937-236-6444 or use our contact form.

This article discusses a published court decision for general informational purposes. It is not legal advice, and every case depends on its own facts. Reading it does not create an attorney-client relationship.