In An Accident? Make Sure The Hospital (Or Other Health Provider) Knows About Your Health Insurance

If you’re injured in an accident, some hospitals and other medical providers would rather forego making a claim on your health insurance and wait until the end of the case to receive payment out of any settlement or judgement. 

“Why?” you might ask.  Medical providers have contracts with health insurance companies, and under those contracts, the health insurance companies have negotiated lower rates for procedures than what the general, uninsured public would pay.

For example, if you go into a hospital and the charges are $5,000.00, the hospital and the insurance company might have an agreement that the insurance company only has to pay $2,500.00 for those services.  To avoid those reductions, many hospitals and other medical providers have been adopting policies to not bill health insurance if the treatment results from a car wreck or  other event where the patient may have a legal claim.

This policy creates a problem for personal injury victims.  At the end of the day, once the case is resolved, the victim has to use the proceeds from the settlement or judgment to pay the hospital the entire $5,000.00 instead of only being obligated to pay the insurance company the $2,500.00 (and in many instances, we can even get that reduced).  Thus, a medical provider’s failure to submit claims to a health insurance company costs our clients money. In many cases, those amounts are so substantial that this issue makes the difference between a settlment going forward or not.

It’s also against the law.   Chapter 146 of the Texas Civil Practices and Remedies Code requires hospitals to submit bills for payment under available health insurance policies in a timely manner.  A hospital that doesn’t submit a bill to an available health insurance policy in a timely manner “may not recover from the patient any amount the patient would have been entitled to receive as payment or reimbursement under a health benefit plan or that the patient would not otherwise have been obligated to pay had the provider complied with” the law.

So what’s a patient to do?  First, make sure that the hospital or medical provider knows about your health insurance coverage.  A number of providers seem to take a “head in the sand” approach and make a specific practice of not asking about insurance.  That way they can claim that they didn’t know the health insurance was available.  Don’t let them get away with this.  Make sure that you have some proof that they hospital or medical provider has notice of your health insurance.  For example, you may want to fax them a copy of your insurance card.

If the hospital or medical provider has the information and still won’t submit a claim, you can always file the claim yourself.  Simply take the bill, get the insurance company’s contact information off your card, and fax the bill to the insurance company and ask the insurance company to pay it.   It’s a hassle, but it gets the job done.

Finally, let me say that there is a potential downside to this.    In this day, when the “paid vs. incurred” rule is in play, some lawyers advise their clients not to submit bills to health insurance because it might decrease the damages ultimately awarded.  However, I don’t hold those beliefs.  In most courts, judges are dealing with this in such a way that the damages shouldn’t be affected.  More importantly, I generally tell clients not to modify their lives based on how it’s going to affect a case.  You never know what’s going to happen at a trial.  If you have health insurance that can pay bills, you’re generally bettter off using so you don’t have those unpaid bills hanging over your head should something go wrong with the case.