Are Hospitals Required to Bill Your Health Insurance, or Can They Take Proceeds from a Car Accident Settlement?
There are many ways that a medical care provider can be paid for services provided to a patient injured in a car accident. The first payment method is private health insurance. That is, after all, why we carry it. However, hospitals have become more and more interested in avoiding the pre-negotiated contractual set-offs and reductions associated with billing through private health insurance carriers.
How Do Medical Liens Work After a Car Accident?
People who get hurt in car accidents caused by other drivers are usually entitled to compensation, but personal injury lawsuits do take some time to settle, and medical bills stemming from an accident are often due sooner than later. Recovering from a serious injury can be stressful and exhausting, and the added pressure from medical providers demanding payment often leads car accident victims to hastily settle for far less than what they’re actually entitled to. Medical liens can be a good option to prevent this.
What is the Missouri Medical Lien Statute?
The Missouri Lien Statute [RSMo Section 430.230] offers an alternative payment route in the form of a lien against personal injury settlement proceeds. In other words, hospitals and other medical providers can legally receive payment for their services from the compensation awarded to the accident victim following a successful personal injury lawsuit. However, the medical lien is subject to a cram-down provision that protects the injured party’s fifty percent share [after attorney’s fees and expenses] of settlement proceeds and forces the lien holders to participate proportionally in the other fifty percent. Perfecting a lien against settlement proceeds is therefore risky for hospitals. Sometimes they will end up with less than they would have received had they just submitted the claim to the patient’s private health care provider.
Medical Liens in Missouri
Some providers to become a little too creative with medical liens. For example, in Morgan v. Saint Luke’s Hospital of Kansas City, 403 S.W. 3d 115 (June 28, 2013), the Missouri Court of Appeals held that St. Luke’s was not entitled as a matter of law under the Missouri Lien Statute to assert a lien on the patient’s claim against a third party tortfeasor where the patient’s insurer had already paid the patient’s bill pursuant to its discounted payment agreement with the hospital.
In that case, the patient/plaintiff had been injured in a motor vehicle collision and treated at St. Luke’s. Her insurer had paid her bill in full according to a discounted payment agreement between St. Luke’s and the insurer. St. Luke’s sought to recover the rest from the patient’s personal injury settlement proceeds by returning the discounted payment to the insurer, and filing a lien for 100% of its billed charges against the at-fault insurance carrier. In short, St. Luke’s hospital was trying to be paid twice: first by the patient’s private health insurance carrier and then again under the Missouri Lien Statute.
Initially, the trial court granted judgment for St. Luke’s, finding that Section 430.230 granted St. Luke’s an unlimited right to file a lien on her third-party tort claim. However, the Court of Appeals sided with the weight of authority from other jurisdictions that had construed similar statutes to convey no right to impose a lien against the claim of a patient against a third-party tortfeasor for an amount beyond that dictated by the contract between the health care provider and the insurer [the discounted payment by the insurer had effectively discharged the debt].
So, the answer to the question, “is a hospital required to bill to your private health insurance, or can they just come after your settlement proceeds?” is that they can do one, or the other, but not both.
Have You Suffered a Car Accident Injury?
If you’ve suffered a serious injury in an auto accident, please contact Donovan Dodrill at Plaza Injury Law immediately. When personal injury claims involve a medical lien, it’s a good idea to get sound legal advice on how to proceed. As an experienced Kansas City personal injury attorney, Donovan will provide the representation you need to successfully settle your claim. Case consultations are always free and confidential.