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In light of the complexities of current medical billing and collection efforts by the health care and insurance industries, I put together some suggestions to protect my injury clients’ financial interests and peace of mind. In sharing these, I hope to provide you with some insight and a method to respond to the different challenges that arise, should you be in a similar situation.
The problems usually start after our injured client starts receiving medical bills and calls from collection agencies; this can be very stressful, so follow these easy steps to ensure maximum results with the least possible tension:
First, when discharged from the hospital, request an itemized billing statement from the hospital so you can audit the bill to ensure you’re paying for services received. Sometimes there are errors. Double billing or charging for the wrong services happens more than you’d think. By viewing your medical records (which I normally order in preparation of an injury case), you can track the actual services and compare the bill to ensure it is accurate.
Secondly, request a copy of the explanation of benefits form (EOB) from your own health care insurance company. This will help you cross check what the hospital actually billed and any discounts extended by your insurance company. Health insurance companies are given deep discounts off the value of customary medical services and thereby pay only a portion of the original hospital bill.
For example, a $1,000.00 hospital bill for legitimate services may only cost an insurance company $750.00 because of their contract. Insurance companies offer “in kind” benefits to hospitals that make up for the $250.00 discount in the form of marketing assistance, quick payment turn around and shortened (or no retroactive) denial periods.
So, when a hospital demands you pay the full $1000.00 (which includes the $250.00 “discount” that the insurance did not pay), you should argue that they already received “in kind” consideration via the insurance company’s contract, to which you’re a third party intended beneficiary. Paying the $250.00 balance would mean the hospital would be unjustly enriched, since their agreement with your health insurance company for payment in full is for $750.00.
A third tip to manage your bills is to get a copy of your health insurance company’s contract between your employer and the health insurance company. Get this from your employer.
Examine whether there is a subrogation provision (right of repayment) requiring you to reimburse your health insurance company from your injury settlement proceeds from the bad guy who caused the accident, as opposed to your own underinsured coverage, which may be exempt from repayment.
If you don’t have a repayment provision or your health care insurance company mandates you must be first “made whole” before they are subrogated to your rights to collect (from the wrong doer who hurt you), then you can avoid repaying them.
Courts have held that there is no right of subrogation until the injured party has recovered an amount in excess of their loss, even if there is no made whole provision in your policy. Also, the contract might not require reimbursement in underinsured or uninsured cases. So look into these details as they quickly clarify your rights and responsibilities in terms of who pays who and when.
By viewing your employer’s contract, you’ll also see what percentage discount the insurance company has offered your hospital, which will help you negotiate against over paying them the “balance bill” not paid by your insurance company (mentioned in point 2)
Ordinarily, your EOB’s will also tip you off as to the discount percentage your hospital received. (This is separate from your payment percentage ordered under your health care contract i.e. for co-pays and or services.) Knowing this will help you in the negotiations for repayment from your settlement proceeds.
Fourth, create a spreadsheet at the beginning of your case to track the bills, reductions, changes, and payments. Managing my clients’ medical costs in a program like Excel provides peace of mind for them and simplifies litigation for me. We call them “medical bill snapshots” and they help everyone see the numbers very plainly and clearly. From that, we can make better decisions based on what the status is. For example, my staff can identify the residual bills not paid for by health insurance and bill the client’s automobile insurance medical payment provision for them.
Fifth, always correspond by certified mail and retain copies of the letters and postal slips in order to create a solid paper trail should you need to hire a consultant to negotiate a lien on your recovery, or delayed or reduced payments while you are recovering, or to form the basis of a lawsuit (or class action) for sharp insurance or hospital business practices.
Last but not least, hiring an experienced trial lawyer will ensure your rights are protected.
I’d like to close by crediting the Consumer Attorneys of California organization and their membership for assisting with and inspiring the creation of this article.
©Richard L. Duquette, Esq. All rights reserved 2017 – LEGAL ADVERTISING
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The information in this article is for general information purposes only. The focus of this article is on California Law. You should contact an attorney in your state for case specific advice, as details of the law and procedural requirements vary from state to state. Nothing in this article should be taken as legal advice for any individual case or situation. This information is not intended to create an attorney-client relationship; and the receipt, reading, listening, or viewing of this content shall not constitute an attorney-client relationship. Nothing in this article shall be construed as a warrant, promise, or guarantee about the outcome of your case or any other matter. This information may contain personal impressions or statements of opinion on a subject that do not apply in your case. Further, statements of law reflect the current state of the law at the time of writing and/or recording, and may not reflect subsequent changes in the law.