Congressional investigations may be coming none too soon on revelations about predatory billing by big hospitals and hospital chains against patients for costly care they received after they were hurt in vehicle wrecks.
The New York Times reported that its investigations showed that patients, especially the poor and vulnerable, too often have gotten ripped off on treatments that their health insurance could have covered when they were involved in car crashes. Instead, hospitals and hospital chains seek to maximize profits — and purportedly to protect themselves against financial losses — by making legal claims against wreck victims and their finances.
The claims, permitted under centuries-old practices, are called liens. They are a legal “claim on an asset, such as a home or a settlement payment, to make sure someone repays a debt,” the New York Times reported.
Why do this and not just take health insurance payments?
As the newspaper reported, by filing liens — which give the institutions early and priority claim on individuals’ assets — hospitals also can charge their highest rate for their care, typically rack prices that most patients never see because their insurers, including Medicaid and Medicare, have negotiated better charges and would never pay the prime cost.
Christopher Whaley, a health economist at the RAND Corporation who studies hospital pricing, told the New York Times he cannot fathom how institutions and chains could exploit the poor and injured in such fashion: “It’s astounding to think Medicaid patients would be charged the full-billed price. It’s absolutely unbelievable.”
The newspaper, however, cited cases from coast-to-coast where patients, with health coverage of some kind, found themselves hounded by hospitals for payments for care they received after vehicle crashes — even if they repeatedly inform the institutions or chains to bill insurers first. The stress of the dunning exploitation is awful to patients recovering from injuries, and it can be catastrophic to their finances and credit records, as an elderly Virginian found, according to the New York Times:
“Mary Edmison, an 86-year-old widow, said she tried everything to get Mary Washington, a hospital in Fredericksburg, Va., to bill her insurance — Medicare and private coverage — for the treatment she received in a 2016 crash. She called; she went to the hospital’s billing department; she sent a handwritten letter. ‘Again and again, I’ve asked Mary Washington to send their bills through the proper channels,’ she wrote in a 2017 letter. ‘I don’t know what their problem is.’ In August 2017, the hospital sued her for more than $6,000. Ms. Edmison, who has since settled the issue with the help of a lawyer, was shocked. ‘I’m on a fixed income and those kind of charges would have sunk me,’ she said. Eric Fletcher, a spokesman for Mary Washington, declined to comment on Ms. Edmison’s case but said the hospital complies with state and federal lien laws. ‘We never want a patient to endure hardship related to medical bills,’ he said.”
But the newspaper reported that a Washington state hospital, as part of a 2014 lawsuit, disclosed that it ginned up $10 million in revenue via liens filed against poor and injured patients who might have been protected by Medicaid. Hospitals and chains have made the legal argument, with varying success in courts, that they can and should squeeze poor patients for treatment costs before hitting up the government, which insists it routinely would cover payments for victims of auto crashes if billed.
The New York Times explained the lien system:
“[M]any states passed [lien laws] in the early 20th century, when fewer than 10% of Americans had health coverage. The laws were meant to protect hospitals from the burden of caring for uninsured patients, and to give them an incentive to treat those who could not pay upfront. A century later, hospital liens are most commonly used to pursue debts from car accident victims. The practice can be so lucrative, documents and interviews show, that some hospitals use outside debt collection companies to scour police records for recent accidents to make sure they identify which of their patients might have been in a wreck, so that they can pursue them with liens. Some laws limit what share of a patient settlement a hospital can lay claim to, and others allow only nonprofit hospitals to collect debts this way. Certain states require hospitals to bill accident victims’ health plans rather than using a lien. This approach is seen as more consumer-friendly because patients benefit from the discounts that health plans have negotiated on their behalf.”
The newspaper added this:
“When states have permissive hospital lien laws, some hospitals take advantage in ways that hurt patients. These hospitals tend to be wealthier, The New York Times found, and many of those that received hundreds of millions of dollars in federal bailout funding during the pandemic are among the most aggressive in pursuing payment through hospital liens. Community Health Systems, which owns 86 hospitals across the country, received about a quarter-billion in federal funds during the pandemic, according to data compiled by Good Jobs First, which researches government subsidies of companies. One of its hospitals in Tennessee refused to bill Medicare or the veterans’ health insurance of Jeremy Greenbaum after a car crash aggravated an old combat wound to his ankle. Instead, the hospital filed liens in 2019 for the full price of his care, records show. ‘I could cut off a finger and the V.A. would cover it,’ Mr. Greenbaum said, adding ‘the insurance is just that good.’
“The worst part, Mr. Greenbaum said, was the nearly constant collection calls that made him feel like a ‘real deadbeat.’ Mr. Greenbaum is now part of a lawsuit against the hospital, Tennova Healthcare Clarksville, that accuses it of predatory lien practices. Ann Metz, a spokeswoman for Tennova, said that ‘Tennessee state law allows hospitals to file provider liens as a way to ensure that health care providers can be paid for treatment.’”
Let’s see what happens, if federal officials step in. Rep. Frank Pallone, a New Jersey Democrat and chair of the House Energy and Commerce Committee, made this comment on Twitter about the New York Times article:
“Accident victims should be able to focus on recovery without worrying about being taken advantage of. @EnergyCommerce will get to the bottom of this — we must protect patients against this egregious billing practice.”
In my practice, I see not only the harms that patients suffer while seeking medical services, but also the damage that can be inflicted on them and their loved ones by car, motorcycle, and truck wrecks. These incidents — which sadly occur all too frequently these days — can be traumatizing and life changing, leaving victims debilitated and in need of major care for periods, up to and including the rest of their lives.
A common and shocking part of what victims and their loved ones experience begins, of course, when they may be in least control of their lives — maybe when they arrive at a hospital and are in desperate need of medical services. Patients and their families at this vulnerable moment, however, may be barraged by institutions’ financial personnel, demanding reams of information and signatures on piles of papers. The New York Times reported that some of the documents may be consent forms, allowing hospitals to slap liens on patients for treatment costs, rather than billing their medical insurers.
Patients learned from the awful practice of surprise medical billing — in which they faced whopping charges from providers outside their health insurance companies’ “narrow networks” of approved caregivers — to do everything they could, considering their emergency condition, to avoid signing any paperwork in haste. Congress, in unexpected and bipartisan fashion, recently appears to have banned the worst parts of those surprise medical bills.
But the caution against putting one’s John Hancock on anything under medical duress may still be wise.
Here is another professional recommendation that may belie conventional wisdom: Patients should consider whether their early calls after a vehicular wreck should go, beyond loved ones, maybe not to their insurance agent alone but also perhaps to an experienced lawyer they trust. This may be especially pertinent if the injuries in a case are severe.
Conventional wisdom holds that an auto insurance agent will look after a policy holder after a crash. Maybe. It’s great if you have a solid gold pro like that.
But remember: the agents work for insurance companies, not you. Your lawyer, as occurs with our firm, can step in to ensure that your insurer doesn’t try to prevent you from getting benefits you may be entitled to just to save his employer on expenses in your case.
Your auto agent certainly cannot be helpful to you if you find yourself in a battle with a hospital over its attempt to gouge you on your medical bills, especially if those aren’t falling under your health coverage but in a dubious slapping of liens against you or some aspect of your assets.
As the congressman has said, this all is sketchy and unacceptable behavior by enterprises that should be acting better and in your interests when you are in greatest need of their best. We have a lot of work to do so a road calamity does not turn into a financial nightmare for vehicle wreck victims.