Posted by Sansone / Lauber Trial Lawyers on May 9, 2014SHARE IT
Some hospitals have been sidestepping health insurance for car-accident victims and instead seeking bigger payments from car insurance settlements. Now a court settlement has put an end to the practice by a hospital in Kansas City, Mo., the Kansas City Star reported.
St. Luke’s Hospital reached the $3.5 million settlement in late April with three patients who filed a lawsuit challenging the practice. The agreement affects about 930 patients whose health insurance the hospital had rejected. St. Luke’s said it would either stop trying to collect payments or provide partial compensation to the patients.
The issue is important for patients who assume that hospitals will bill their health insurers for their care. By going after auto insurance proceeds instead, the hospitals cut into funds that would otherwise compensate people injured in car accidents for lost work time, replacement cars and other expenses.
Hospitals seek payment of their bills from car insurance settlements because they make more money that way. Health insurance companies generally require hospitals to accept discounted payments for their services. Car insurance settlements aren’t subject to discount pricing.
Under the long-standing practice, hospitals obtain liens against patients to ensure they receive payment for hospital expenses. This practice apparently is all too common in Missouri. Other St. Luke’s hospitals, including Wright Memorial in Trenton and Hedrick Medical Center in Chillicothe, have admitted to participating in this practice and will be affected by the settlement, according to the Kansas City Star.
Meanwhile, Kansas City area hospitals Truman Medical Center, Research Medical Center and Liberty Hospital are all involved in similar lawsuits, though they say they’ve done nothing wrong.
One Patient’s Story
The Star told the story of a woman who became caught up in this hospital billing practice after she was treated at Research Medical Center for injuries suffered in a car wreck.
Instead of filing a claim with her insurer, Blue Cross Blue Shield, Research Medical directly charged her, then sued her in court to collect a $2,153 bill plus fees and interest. There was no car insurance settlement.
Although the hospital cut its initial charge of $7,000, the woman still faced financial hardship. Working as an administrative assistance at a children’s home, she makes about $30,000 annually and has to hold down a part-time job.
While hospital officials call this a complicated issue, Blue Cross Blue Shield contends that hospitals are required to file health insurance claims. But Research Medical Center apparently didn’t take that step even though the patient gave the hospital her health insurance card.
The woman describes her situation as “very unnecessary,” especially since she pays for medical and auto insurance to make sure she is covered in case of accidents and injuries.
Legislation was filed in the Missouri General Assembly this session to end this questionable practice, but did not pass.
Patients’ best hope may come in the wake of the St. Luke’s settlement and the impact it could have on hospitals across the state. But hospitals are a powerful lobby, and the battle probably isn’t over.
If you are facing a similar situation, it may be helpful to discuss your legal options with a St. Louis personal injury attorney who is experienced at negotiating with hospitals and insurance companies.