March 18, 2021
Hospitals Make Huge Profits By Rejecting Health Insurance in Car Accidents
Many patients are surprised to receive substantial emergency room bills after they are involved in auto accidents, despite the fact that they have health insurance that would have covered the hospital bill. According to a recent report in the New York Times, many hospitals are taking advantage of hospital lien laws that allow hospitals to place a lien on the patient’s personal injury settlement. By asserting a lien against the patient’s injury settlement, hospitals can avoid the contractual adjustments to their bills that are required when they accept health insurance. Instead, by placing a lien on the injury settlement, the hospital can collect amounts that can be five times higher, or more, than the amount that would have been allowed by the health insurance company.
The practice of hospitals foregoing their patients’ health insurance to seek higher payments from the patients’ injury settlement is especially common with low-income patients who have Medicaid. Medicaid’s reimbursement rates are typically significantly less than the reimbursement rates of private health insurance plans so hospitals have more to gain by pursuing a lien in Medicaid cases.
Consumer advocates decry the practice of asserting liens against the patient’s injury settlement in cases where the patient has health insurance, claiming that the hospital lien attaches to money that was intended to compensate the patient for their pain and suffering. While the patient’s injury lawsuit is pending, the hospital lien can adversely affect the patient’s credit. A lawsuit is currently pending against Tennova Healthcare Clarksville, a Tennessee hospital after the hospital pursued a lien against a veteran whose VA coverage would have paid the hospital’s emergency room bill. The lawsuit alleges that the hospital engaged in predatory lien practices. Some hospitals have emergency room patients sign a waiver, agreeing that the hospital can pursue a lien rather than billing the patient’s health insurance. Some patients have complained that they were asked to sign the waiver while waiting for treatment for serious injuries, even head injuries and that the waiver was not explained to them.
Hospital industry representatives argue that hospital liens properly shift the burden for the cost of accident-related treatment to the liability insurance for the wrongdoer. Industry representatives argue that this practice is particularly justified in cases where the patient is covered by Medicaid or Medicare because the negligent party, not the government, should be responsible for the cost of treatment.