If you are injured by someone else’s negligence here in the state of Idaho – and if you can prove it – you are entitled by law to complete compensation for the medical costs, lost wages, and all of your other injury-related damages.
As a Coeur d’Alene car accident attorney, I can tell you that claims for serious personal injuries can take time to resolve, especially if you have to file a personal injury lawsuit to obtain your compensation. While your case is pending, however, healthcare providers expect to be paid.
If your health insurance company pays for all or part of your medical expenses after an accident caused by another person’s negligence, and you are later awarded a personal injury settlement or verdict, can your health insurance company seize all or part of your award? Can your hospital?
WILL YOU BE ABLE TO PROTECT A PERSONAL INJURY AWARD?
The law in Idaho is complicated, but keep reading, because there are ways that you can protect your personal injury settlement from your hospital and your health insurance company – but you’ll need legal help from an experienced personal injury attorney.
Let’s say that you are taken to a hospital emergency room after suffering a personal injury or injuries in a serious accident. Your health insurance company will pay either a fixed rate or a percentage for each type of standard hospital charge.
Here’s an example: If a hospital lists $150 as the cost for a standard chest x-ray, a health insurance provider may arrange to cap what it will pay for a chest x-ray at $100.
WHICH PARTY IS LIABLE FOR YOUR MEDICAL COSTS AFTER AN ACCIDENT?
If the health insurance company states to policyholders that it will pay 70 percent of the cost of a chest X-ray, then the patient’s obligation is only $30. But if the hospital lists $150 as the cost of a chest x-ray, who is liable for the remaining $50?
Essentially, the hospital writes off the difference. In effect, the cost of a chest x-ray for that health insurance company’s policyholders is only $100.
If you receive a personal injury verdict or settlement, some hospitals may target your compensation and try to make up any“write-offs.”
HOW DOES “BALANCE BILLING” WORK?
Accident victims who are seriously injured will need extensive medical treatment. Even after a health insurance company makes a payment on a patient’s behalf, that patient still may owe the hospital a considerable amount.
If the injury victim files and prevails with a personal injury claim, that hospital has a right to recover – from the settlement or verdict – whatever it is still owed.
In the above example, if the patient still owes for a chest x-ray when the compensation is received, the hospital has the right to collect its $30 from the settlement or verdict amount.
But here’s the catch, and it’s important: Remember the $50 that the hospital “writes off” for the health insurance company’s policyholders?
Sometimes, when a personal injury award is involved, a hospital will try to collect what it would otherwise write off – and make up the gap between the charge that’s “listed” for a procedure and the actual charge to a specific health insurer’s policyholders.
It’s called “balance billing,” and it’s actually a common practice.
DOES IDAHO ALLOW BALANCE BILLING?
Balance billing is against the law in six states, and twenty-one other states regulate the practice to some extent. Idaho does not.
House Bill 495, the “Health Care Billing Equity Act,” a legislative proposal which would have banned balance billing in this state by out-of-network providers for services performed at in-network health care facilities, was defeated this year in the state legislature.
Some health insurers voluntarily do not practice balance billing, but there is no federal law explicitly banning the practice.
HOW DO HOSPITALS PRACTICE BALANCE BILLING?
If you owe money to a hospital, that hospital may legally place a lien against any personal injury settlement or verdict that you may receive. With that in mind, here’s an example of how balance billing works:
Patient X is admitted to a hospital with serious injuries from a traffic accident. X has health insurance, but she mentions to hospital personnel that she plans to pursue a personal injury action against the other motorist in the accident.
Patient X’s hospital expenses total $5,000, so the hospital places a lien against her personal injury claim. Seventy percent – that is, $3,500 – is covered by her health insurance company, and her claim is resolved several months later for $10,000.
But rather than collecting $1,500, the hospital collected $4,000 with the lien. The hospital added the $2,500 that it would have received without the discount usually given to patients holding policies with X’s health insurance company.
WHAT ARE YOUR RIGHTS IF YOU’RE TARGETED FOR BALANCE BILLING?
Health insurance companies and hospitals do, in some cases, have a legal right to part of a personal injury award. The extent of that right will depend on the exact conditions and terms of the victim’s health insurance policy.
“Subrogation” is the legal principle that allows one party to cover the damages owed by a second party and then obtain reimbursement. Subrogation, in some cases, gives a health insurance company the right to recover what it has paid for your healthcare costs.
HOW DOES A “WAIVER OF SUBROGATION” WORK?
Here in Idaho, if a negligent motorist injures you in a traffic crash, do not sign or agree to any settlement before you have contacted and consulted a skilled Coeur d’Alene personal injury attorney.
Do not sign any document or settlement offer from the other driver’s insurance company unless an attorney advises you to sign it. Those documents often have a “waiver of subrogation” provision that blocks your own health insurance company from exercising its legal rights.
If you sign a document with a waiver of subrogation, your own health insurance company is likely to deny your claim since the company won’t be able to pursue reimbursement.
Subrogation and balance billing are complex legal issues, but they are only two of the many factors that can interfere with your personal injury claim.
If you are injured by negligence – in traffic or in any other type of accident – take your case at once to a qualified personal injury lawyer. Your health and your future could depend on it.