Authors: Julie L. Cibulskis and Timothy J. Reuland
Last month’s blog discussed several ways to handle the payment of your medical bills if you are injured in an accident. If your medical bills are paid through health insurance, automobile insurance or a government program, the insurance company or government program may have a right to reimbursement.
Almost every health insurance policy, and certainly Medicare and other governmental-aid regulations, require that an injured person who receives a recovery must repay the health insurer or the government program the amount paid to satisfy the bills of medical providers. That is, generally speaking, out of any settlement or court judgment an injured person obtains, health insurers or governmental programs are reimbursed the amounts those insurers or programs paid to cover the injured person’s medical bills. This process is provided for by the “subrogation” clause in health insurance policies or by government regulation. If you are injured due to someone else’s fault, your health insurance company may send you a questionnaire asking for details about the occurrence, your injuries, who was at fault, other available insurance, and whether you have hired an attorney. This form allows your insurance company to determine whether it is responsible for the payment of your medical bills, and if so, whether it is entitled to reimbursement for any payments made on your behalf.
Why Use Insurance?
So, you may ask, if I am going to have to repay my insurance carrier or the government anyway, why bother to submit the bills to my own health insurance provider? The answer: money. In most cases, the amount required to repay your health insurance carrier or the government is less than the amount necessary to pay the full amount billed by the hospital, doctor, or medical provider. This is because the medical providers usually accept less than the “face value” of the bill from health insurers or government programs. Health insurers often have contracts with providers specifying what the providers will be paid for certain services and procedures. Medicare and Medicaid have similar stipulations. The amount that the injured person has to repay is based on the usually lower amounts that the health insurers and government programs pay, not the higher amounts originally billed by the hospitals and other medical providers. Practically speaking then, the injured person is usually better off having their own health insurance carrier or government program satisfy the bills.
Notice of Lien
If you do not have insurance coverage for your medical bills, some medical providers may also send a Notice of Lien in order to get paid from your settlement. The lien, which can be sent to the defendant, the defendant’s attorney and the plaintiff’s attorney, can include the amount of reasonable charges for services rendered. These liens are authorized by the Health Care Services Lien Act, 770 ILCS 23/1. The lien is one method used by medical providers to collect outstanding bills. Medical providers may choose to hire a collection firm, file a lawsuit or negotiate a payment plan.
Even when you have insurance coverage for your medical treatment, some providers may still send a Notice of Lien, instead of submitting your medical bills to insurance. For example, when certain hospitals become aware that they are providing treatment because of an accident for which someone other than their patient might be responsible, some hospitals refuse to submit the bill to an insurance company. Instead, they will mail a Notice of Lien to the responsible party, that party’s insurance company, and the patient. Some medical providers take this approach thinking that, if they submit their bill to a health insurance company or to a government program like Medicare, they will be forced to take a deep discount on their bill (because of their contract with the health insurance carrier or Medicare regulations). Rather than suffer that discount, these medical providers hope to be able to recover 100% of their bill by waiting and claiming a lien on any recovery the injured person eventually makes. These providers think: better 100% later, than a deep discount now.
The issue of liens and subrogation rights is often difficult to fully understand. The attorneys at Speers, Reuland & Cibulskis, P.C. have extensive experience with liens and regularly negotiate liens to maximize the recovery for our injured clients. If you have been injured and received a lien from a medical provider or insurance company, contact one of the lawyers at Speers, Reuland & Cibulskis, P.C. to discuss any questions you have about your case.