UPDATE: Hospitals Are No Longer Allowed To Cherry Pick Whether They Bill Your Health Insurance or Not

UPDATE: Hospitals Are No Longer Allowed To Cherry Pick Whether They Bill Your Health Insurance or Not

 Posted by:    Jun 02, 2015  


So you have health insurance and you would assume that after your car crash the hospitals treating you would simply take your information like they would any other time and bill your health insurance, right? Wrong. Overwhelmingly, hospitals are not billing health insurance for the care received by people injured in car accidents. Instead, hospitals are recording hospital liens so they can get paid a higher rate from the proceeds of any eventual settlement with the at-fault insurance company. You might ask yourself, why wouldn’t a hospital want to get paid from health insurance? The reason that hospitals try to avoid health insurance is that health insurance companies have re-pricing agreements with hospitals. This is why you may notice a huge bill from a hospital for an ER visit where the health insurance only paid a fraction of the total bill. This is re-pricing at work.

Hospitals work intensively to negotiate these agreements with insurance companies. Their motivation is to shore up contracts with large scale revenue streams. A hospital landing a new health insurance company as a provider assures that patients with that particular insurance provider will frequent the hospital and bring more money to the hospital. However, years ago, some hospitals in Colorado realized that in certain cases, they can recover a higher percentage of their original bill by pursuing patient’s individually and not submitting their bill to the patient’s health insurance. This allows the hospital to gain the advantage associated with reaching these agreements with health insurance, but also allows them to “feather their nest” by cherry picking when not to submit their billing to health insurance companies. Specifically, some hospitals do not submit their billing to health insurance when they learn that the patient stands to recover money from an at-fault person’s liability insurance company. Motor vehicle crash claims are fertile ground for this specific conduct.

Why should a patient care whether the hospital gets paid from health insurance or through the negligent driver’s insurance? Insurance is insurance, right? WRONG!

piggy bank for medical bills

The answer is that very often, money that gets paid to hospitals from an at-fault party’s insurance is taken right out of the hands of the patient. While health insurance is in place to pay these bills at a lower rate, often with little or no obligation on the part of the patient to ever pay back those charges, auto insurance will simply pay the injured person. If there is a hospital lien recorded, then they are required to include the hospital’s name on the settlement check. That allows the hospital to make an unfair demand for a greater percentage of recovery of their medical charges (much more than health insurance would pay them) with the threat of holding up the final settlement if they don’t get their way. If the patient wants to get anything, they often have to succumb to the demands of the hospital. To that end, the hospital gets paid more while the injured person gets less. This is a win for the hospital and a big loss for the patients. So, now that we understand that some hospitals are doing this and we understand their economic motivation, the next question is whether it is legal for them to do that or not.

Is it legal? Up until May 29, 2015 no laws prevented the hospital from cherry picking between using the patient’s health insurance or recording a lien and encumbering a settlement. However, Governor Hickenlooper signed Senate Bill 15-265 on Friday, May 29, 2015. Senate Bill 15-265 resulted in changes to language found in C.R.S. § 38-27-101 which now requires that hospitals must bill the insurance of injured people in the same way that they bill insurance of non-injured people. Additionally, once the hospital initially files the lien and is later told about the existence of health insurance, their obligation is to act in good faith to submit billing to the proper health insurance company and get paid in that regard. And, the laws also provide that if a hospital chooses not to bill available health insurance or ignores information provided to them subsequently after they record a lien, the injured person can bring an action against the hospital in district court where they can recover two times the amount the hospital is seeking in a lien. For the first time, patients in Colorado have a right to demand that a hospital bill their health insurance and not cherry pick between health insurance and recording a lien.

At Anderson Hemmat we feel that knowledge is power. Knowing your rights is key to understanding your available arsenal of responses to any issue that arises. Many of our personal injury clients do not realize, before they meet with us, that their health insurance should be the primary payer of the medical care they received as a result of a motor vehicle collision injuries. They are often surprised to find out how their ultimate recovery in a personal injury claim can be profoundly affected by how their medical bills have been paid. Please don’t let yourself be surprised. Call 303-782-9999 to speak with one of our experienced personal injury attorneys today for free. We are happy to help you understand the rights you have and how to obtain a better recovery in your case.










Current Post Comments


Quick & Easy Contact

Are You a Robot? - Help

Review Us Online

Review Anderson Hemmat on Google Plus
Review Anderson Hemmat on Facebook
Review Anderson Hemmat on Lawyers.com
Review Anderson Hemmat on Yelp
Review Anderson Hemmat on AVVO
Talk to Anderson Hemmat Past Clients

Firm Associations

  • Featured in Super Lawyer Magazine
    Featured in Super Lawyers
  • AV Preeminent Rating 2017
    AV Peer Review Rated
  • Colorado Supreme Court
    Colorado Supreme Court
  • AVVO Rated Law Firm
    AVVO 10.0 Rated Law Firm
  • Colorado Trial Lawyers Association
    Colorado Trial Lawyers Association
  • Colorado Bar Association
    Colorado Bar Association
  • National Trial Lawyers
    National Trial Lawyers Association
  • American Association for Justice
    American Association for Justice
  • American Institute of Legal Counsel
    American Institute of Legal Counsel
  • Find Law
    Featured on Find Law
  • ASLA
    American Society of Legal Advocates
  • CATL
    Class Action Trial Lawyers Association
  • Rue Rated Attorneys
    Rue Rated Attorneys
  • Justia
    Justia Member
  • Million Dollar Advocates Forums
    Million Dollar Advocates Forums
  • lawyers.com
    Featured on www.lawyers.com
  • NAOPIA
    National Academy of P.I. Attorneys
  • NOLO
    NOLO
  • hg.org
    Featured on www.hg.org
  • Top American Lawyers Association
    Top American Lawyers Association
  • Best Law Firms of America
    Best Law Firms of America
  • Trial Masters
    Trial Masters Member

Blog Post Archive

INJURY LAW UPDATES

Captcha Image
Anderson Hemmat, LLC
5613 DTC Pkwy #150 Greenwood Village , CO 80111
Phone: (303) 782-9999

The information on this website is for general information purposes only. Nothing on this should be taken as legal advice for any individual case or situation. This information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.

Copyright © Anderson Hemmat, LLC | By +Chad Hemmat | Colorado Injury Accident Attorneys | Personal Injury Blog | About Anderson Hemmat Law Firm | Privacy

Anderson Hemmat Logo

Reset Your Password