Thursday, February 18, 2016

The One Thing You Must Insist Upon After Your Crash...Or Risk Ruining Your Credit

I've seen this scenario OVER AND OVER again from car accident clients who call me in complete frustration months after their crash.

Client--let's call her Jenny--is involved in crash not her fault.  Jenny visits the local hospital for treatment. She explains to the hospital intake person (you know, the poor soul who has to ask for your insurance information while you're spasming in pain, bleeding, or have that bone sticking out of your leg) that she has health insurance and provides "nice intake lady" with a copy of  her insurance card.

Frequently, one of two things eventually happen after her insurance information is given. Either Jenny is told "since this is an auto accident, we will be billing the at fault party's insurance," OR the hospital takes her information and simply refuses to bill jenny's health insurance.

And then months go by. The hospital bill is lingering. Nothing has been paid. The at fault insurance company who promised to "work with" Jenny tells her that "we have to wait until you finish treatment" or "we can't pay anything until we review your records" or "we'll just offer you one lump sum as a settlement and you can pay your hospital bills out of your settlement."

Now Jenny is getting hounded by bill collectors hired by the hospital--which usually prompts a call to me.

What is going on here and why is Jenny being turned over to collections when she has health insurance and there is other insurance galore to pay her bills???

When the hospital sniffs that this is an auto accident claim and someone other than the patient may be at fault, it simply refuses to bill the patient's health insurance. But why?

Two words: hospital greed.

It's real simple: health insurance may pay well less than 50% of the patient's hospital bill. For example, if your ER bill is $5,000, the hospital may receive $1000 or even less from the patient's health insurance company as payment in full.  This is because insurance companies negotiate these discounts with hospitals who agree to be in their insurance network.

Because insurance reimbursement rates are so low, some hospitals are telling patients that the hospital "could not bill health insurance because it was an auto accident," or  told the patient that their health insurance "did not cover auto accidents."

Both of these statements are deceptive. First, virtually every health insurance plan will cover auto accident related expenses. Second, hospitals CAN bill health insurance. They just don't WANT to.

Reality: if there is a better and more lucrative source for the hospital's payment (such as the at fault driver's insurance company), the patient's health insurance is often viewed like a Spam casserole in the buffet line, and ignored.

Now, in a perfect world, this would not be a problem if the at fault driver's insurance company stepped up to the plate and simply paid the bill. But they almost NEVER do that. See excuses listed above...

The mistake that car accident victims make when they go it alone is not insisting that the hospital bill their health insurance, or simply turning the bills directly over to their health insurance company for payment to the hospital.  Chances are, the health insurer will pay the bill if the patient insists upon it.

The takeaway? If the hospital bill has not been paid within a month or so, contact your health insurance company and insist that it pay the bill.

Otherwise, the bill will linger, and here's the irony: your credit rating may get dinged despite the fact that you have health insurance, all because your local hospital (who is in your health insurance network), wanted to step out of that network to be paid a few more bucks.  

It's no wonder people call me after getting sucked into this unnecessary vortex.

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