It is an excellent feeling when you reach a settlement for a personal injury suit, but it’s not so good when you realize that you are entering into another battle with your medical insurance company. The state of medical insurance in the United States has many clinics and hospitals searching for ways to get reimbursed, which sometimes can come knocking on your door once you collect a settlement for your injuries. Some health insurance providers are overreaching to find settlement money from patient care victims to recover their costs, but is it legal?
How can health care insurers overreach?
A health insurance company has contracts with hospitals and clinics where they agree to pay a certain amount of money or a percentage of the cost for every charge that the hospital makes. An example would be if you had an x-ray that costs the individual $150, your insurer might have a contract with the hospital that they will pay just a fraction of the cost, like $100. In exchange, the insurer has a contract with the patient that they will cover 70% of the cost of the procedure and will require that the insured to pay the difference or $30.
Due to its contract with a specific hospital or clinic, the insurer will charge the patient anything over what the insurer has agreed to. But what happens if the hospital doesn’t have a contract with an insurer? Who is responsible for the additional $50 that was not part of the agreement between the hospital and insurance carrier?
If a patient is injured due to an accident, they may require extensive medical services. The additional amount that is due is left for the insurer to pay, which can be a substantial amount. In the end, the patient might ultimately be responsible for paying; if they collect a settlement, then the health insurer can try to recoup what the company has had to pay. It can also be the case that hospitals will try to go after the patient to cover the difference between the contract price and what they had to pay by targeting the plaintiff’s settlement amount. The industry term is called “balance billing,” and it is legal in some states, but not others. That’s why it is important to find a Queens personal injury attorney, because even in states where it is illegal, hospitals may try to collect, hoping to fly under the radar if patients aren’t aware of their rights and obligations.
How do hospitals make a claim to a personal injury settlement?
When you go to the hospital for an emergency and tell the staff that you were hurt through the negligence of someone else, they may put a lien on any accident insurance settlement you obtain without your knowledge. The hospital is allowed to put a lien on any settlement that the patient reaches in the future.
If an insurer then gives the patient a specified amount of money for the patient’s injuries, the amount that was not covered by the insurer, due to whatever contract they had with the hospital, then becomes the patient’s responsibility. That means that the hospital might be able to go after the patient’s settlement amount to recover their costs.
What is the legality of a “balance billing”?
Patients, who feel as if they have been “ripped off” by hospitals putting liens on their settlements without their permission or even their knowledge, are challenging the practice. Both class-action and individual suits have been initiated in Wisconsin and Texas. In the cases that have gone before the courts, the courts have ruled in favor of the patient.
Does the medical insurer have the right to part of your settlement amount?
Depending on the terms you agreed to for your health insurance coverage, your insurer might be privy to some of your settlement amount. There are many times that your insurer is entitled to reimbursement for whatever they paid toward your medical bills through a process called subrogation. If you have just received a settlement for a personal injury suit and want to protect your award money, make sure to have a personal injury lawyer on your side to protect what is rightfully yours. They can help decipher what your financial responsibilities are.