For years, we have encouraged our clients to avoid using medical finance companies to pay for injury related medical care, especially when a client has health insurance. The reasons are clear. Using health insurance instead of medical financing is cheaper, provides clients with more options for treatment, and gives clients access to favorable repayment laws in Colorado. Most importantly, clients net vastly more money from injury recoveries when they use health insurance to treat rather than medical financing.
This week, a Jefferson County District Court judge issued an order that has added yet another really good reason to avoid the use of medical financing. In a trial scheduled to commence next week, Judge Christie Phillips ruled that the insurance company defendant can tell the jury about the amount of money the finance company actually paid for the care that they secured for the injured plaintiff. Even though the injured victim is contractually bound to pay the finance company the full amount of the bills, the insurance company, according to this ruling, gets to show the jury the lower wholesale prices that the finance company actually paid to secure care for the plaintiff. Without question, those rates are appreciably discounted from what the injury victim is required to pay back. Allowing the jury to see these amounts will distort reality for the jury and will most likely lead the jury to award less money to the plaintiff for his or her medical bills. The impact of this ruling is significant because medical financing is a capitalist venture. Accordingly, if medical financing companies are not able to achieve a margin or profit, they will cease to operate and will no longer offer healthcare to uninsured car collision victims.
To truly understand the impact of this ruling, one must understand how the laws work when an injury victim has health insurance. For years, Colorado law has precluded juries at trial from hearing the amounts that health insurance companies actually paid for healthcare compared to the billed prices from hospitals and doctors. The jury is only charged with determining whether the billed charges were reasonable and necessary. Our laws hold that the amounts actually paid by health insurance companies for those charges are irrelevant. This keeps insurance companies from making the “well, he had health insurance so he doesn’t really owe $40,000 for his surgery” argument. But, with Judge Phillips’ new order, auto insurance companies are going to make medical finance companies, and by association, the injury victims who secure medical care through these companies, look guilty of trying to pad the medical charges. This overreaching perception (which is just perception since plaintiffs will have to pay those higher priced medical charges from any recovery they receive) is going to have a hugely negative result in jury verdicts across the state for plaintiffs.
The saddest thing of all about Judge Philips' ruling is that it will likely result in lowering verdicts for the poorer members of our community (those without available health insurance) who can least afford to recover less than full compensation from the jury.
At Anderson, Hemmat & McQuinn, we encourage our clients to avoid the use of medical financing in favor of utilizing available health insurance. Now, with this poisonous order coming out of Jefferson County, the viability of medical finance companies is in serious question, and there is yet another reason to avoid medical finance companies to cover accident related treatment. Without a doubt, it is always a better deal for our clients when they use their available health insurance instead of using medical finance companies. Call us at 303-782-9999 today if you have been injured and have questions about how to handle the resulting medical bills.