Area hospitals are being sued for not submitting bills to health insurers [The Kansas City Star]
By Steve Everly, The Kansas City Star | |
McClatchy-Tribune Information Services |
But after he was patched up following an auto accident in 2011,
Instead, it sent a bill to Layden -- but without subtracting the big discounts
Layden, a student, had to borrow
Can hospitals reject your health insurance? As it turns out, yes -- and many hospitals are doing just that in auto accidents.
But accident victims around the country, helped by lawyers filing lawsuits and in one state by legislators of both parties who earlier this year passed a bill to ban the practice, are now fighting back.
In the
Layden and other accident victims say they never dreamed that a hospital could pick and choose in taking their health insurance.
"They're going to come after you any way they can," said Layden, who is suing Research for not submitting the bill to his health insurer. "It's all about the money."
When hospitals turn down your health insurance, they are then able to avoid the discounted charges they have agreed to with health insurers. In Layden's case, the hospital went directly to him for the full bill, but the usual practice around the country is to go after whatever money a person injured in an vehicle accident might get from an auto insurance settlement.
Here's how the practice usually works:
--The hospital first refuses to submit your bill to your health insurer.
--It calculates your bill without the health insurer discounts and instead files a lien against whatever settlement you might receive from an auto insurer.
--The hospital gets paid from the settlement.
In Layden's case, the hospital allegedly didn't even file a lien and instead demanded payment directly from Layden before a car insurance settlement was in hand.
A spokeswoman for Research would not comment, citing the ongoing litigation. HCA, the owner of Research and one of the nation's largest hospital chains, also declined to comment. The hospital in its initial legal brief in the court case denied the allegations.
Practice is growing
No figures are available to show how often bills aren't submitted to health insurance. But the practice is thought to be growing because hospitals are looking for new sources of revenue as health care reforms seek to curb costs.
That hospitals are tapping auto insurance settlements is not new. In state laws dating back to the Great Depression, they got the right to place liens on injury judgments and settlements. Hospitals were struggling financially because of a growing number of patients unable to pay. The liens were seen as contributing to the public good by helping the hospitals stay open and treat patients.
But critics say in recent years that the liens have morphed into a tool to help maximize hospital revenues by getting more out of patients with health insurance.
"This is something that really does add insult to injury," he said.
In this region,
O'Connor said, however, that the hospital is not "asserting" new liens pending resolution of the court case.
She added that St. Luke's is assuming the risk of not being paid anything if there isn't an auto insurance settlement. And it still contends it didn't have to file health insurance for the person now suing the hospital.
In some other states, the practice has suffered legal setbacks dating to the late 1990s. But an
The most public rebuke to the practice occurred in
"I can't believe they (the hospitals) thought they could get away with this."
Insurers concerned
The practice puts patients in the middle of disputes over medical bills that they thought would be paid with health insurance.
Auto insurance settlements can indeed help pay the hospital bill in many instances, but the inflated cost without the health insurer discount can take an outsize chunk from a pot of money that is also used to cover other expenses, such as lost wages, attorney fees and replacement vehicles.
Auto insurance policies have limits on how much they will pay in a settlement. In some cases in other states, hospitals have submitted bills worth more than the settlement.
Auto insurers have a budding concern that because they don't have the power that health insurers have to impose discounts, more of the medical costs will be shifted to them. That could end up boosting auto insurance premiums.
"It's a significant issue," said
Specialized companies are helping hospitals sidestep the discounts.
In its sales pitch to hospitals, Medical Reimbursements of America, based in
The company contends that its AcciClaim Auto system ensures that hospitals get more when treating those injured in auto accidents, often 100 percent of the gross charges.
The company recently formed an alliance with
It was Medical Reimbursements of America that sent a letter to
Her attorney got the bill slashed, but she was shocked that her health insurance didn't come into play.
"I thought I had full-coverage health insurance," she said.
SSM DePaul said in a statement that it follows all state and federal guidelines and any requirements set forth by insurance agreements. When treating a person who has been involved in a motor vehicle accident, it works with the patients to identify all sources of insurance payers.
Layden didn't discover that Research wouldn't be using his health insurance until more than a month after his accident.
His initial bill actually showed the
The hospital eventually sent his account to a debt collection agency, which agreed to cut the bill in half. Faced with a falling credit rating, Layden got the loan from his parents.
The hospital ended up getting about
"It's time for them (Research Medical) to take responsibility for their actions," said Layden, who eventually received a
A spokeswoman for
When the issue appeared in the
"It seems to have started (in the
St. Luke's has gotten a
In 2009,
In
The judge agreed, handing St. Luke's a victory.
Morgan appealed her case to the
The case was sent back to
St. Luke's said the appeals court merely held that the plaintiff is entitled to review the insurance contracts.
"Yes, St. Luke's contends it was not required by contract, nor by law, to submit the claim to the insurer," the hospital said in an email response to a question.
Aetna, the health insurer for Morgan, did not return a call seeking comment, but her attorneys say they have seen enough hospital contracts with insurers to be confident there is such a requirement.
The medical treatment by the hospitals wasn't questioned, but by sidestepping the health insurance they were making up their own rules. He said their attitude reminded him of a scene in the Mel Brooks movie "History of the World, Part I."
A king was playing a game of skeet, but instead of clay discs, he ordered live peasants catapulted into the air to shoot. He turned to an adviser and said: "It's good to be the king."
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