When you have a personal injury claim, one of the first to know about it will be your health care provider. In an age of declining revenue because of managed care and uncompensated care, health care providers have taken a keen interest in asserting claims against personal injury settlements.
Under state law, providers may seek direct payment from insurance companies that owe patients money. And many times, this path offers a significant advantage over billing the patient or accepting a reduced reimbursement from health insurance (due to managed care agreements such as PPO’s or HMO’s).
Read on to learn how these claims work, and how they could affect your settlement.
In many cases, the hospital, your treating physician or the EMS unit that transported you to the hospital will ask you to complete a questionnaire as to the cause of the injuries you suffered. Once they obtain the name of a person that is at fault for your injuries, it becomes clear that another insurance carrier may be responsible for payment of your medical bills.
In fact, the questionnaire may ask this information directly. Alternatively, health care providers, and particularly hospitals, often engage third party vendors that are paid a fee to obtain this information and pursue such claims. Beware of anyone claiming to offer assistance in processing your claims. In some cases, this is simply a ploy to obtain information about your possible personal injury claims.
Once the health care provider has the information as to who caused the accident -- and perhaps additionally, that person or entity's insurance carrier -- the provider will make a claim on the third parties. In most states, the claim will constitute a lien, which means that the claim must be honored as a priority over any other payments, including payments to you.
If you have a personal injury attorney, the health care provider will also send a demand to the attorney as well. The attorney must honor a valid lien claim before disbursing any money to you.
“Balance billing” is a controversial practice employed by many health care providers. If you have health insurance, you will most likely be a part of some sort of managed care network. Whether a PPO or HMO or some other variant, the common denominator of such arrangements is that health care providers agree to accept a reduced payment or discount if they are included in the network.
The advantage for the health care provider of being in a network is that the health insurance plan will include the provider in the list of accepted providers presented to you as a consumer. In other words, consumers in the network will be steered to the health care provider in exchange for lower rates.
The health care provider will often ask that you sign an assignment of benefits from your plan and file claims directly on your health insurance carrier. As a consumer, you will likely find that quite convenient.
Something to watch out for here, however, is that the provider may not file on your health insurance and rather, may assert a lien on your personal injury settlement. In a sense, the provider has reneged on its agreement by refusing to accept your health insurance payment since more money can be obtained outside the network by filing a lien for the full fee or that portion of the fee that would be otherwise discounted.
If the “explanation of benefits” form (or “EOB”) states that there is no patient responsibility, then any lien asserted beyond the amount of payment provided under the health insurance plan would be balance billing. If you feel you are a victim of balance billing you should contact your attorney or state insurance department to determine if such practices are permissible.
Note that most health insurance plans require timely filing of claims. If your health care provider fails to file on your insurance, the provider may assert a claim against you for the full amount of charges if your plan denies the claims as untimely.
Examine the forms sent to you by your health insurance plan to determine if the health care providers have filed on your plan. If not, ask the provider to explain when or if they plan to file their claims.
You can file the claims on the health plan yourself by simply submitted the health care provider bills according to the claims procedure set forth in the health insurance documents. If the provider has not filed the claims in a timely manner, you should protect yourself by taking action within the deadlines set forth in the plan documents.